5 ms·

This is a fair assumption, but incomplete. Its the C-suite management that makes all the decisions and reaps all the rewards, but when they make mistakes, they

This is a fair assumption, but incomplete. Its the C-suite management that makes all the decisions and reaps all the rewards, but when they make mistakes, they don't fire themselves, they fire employees, many who had no control of the strategic mis-steps of their leadership. Sometimes the C-suite needs to be fired.

eej71 3y ago
It is ultimately the shareholders who reap these rewards.
wongarsu 3y ago
I'm not sure Spotify has really made any mistakes here though. They took a risk that didn't pan out. For an omnipotent being that would be a mistake, but for a person that only has the information available at the time it can still have been the right bet. Firing people when their bets don't pan out just leads to a risk averse culture that dooms any company to failure
- Pentamerous 3y ago
  But aren't layoffs ultimately a mistake? Shouldn't the stress of losing a job (also) be on the shoulders of who made the incorrect decisions?
- digging 3y ago
  Taking a risk that doesn't pan out can also be a bad idea, though. It depends on what the possible outcomes were and what the chances of each outcome were. The important thing to evaluating someone's decision making ability is to look at the decision they made with the information they had. Was it a good bet to dramatically overhire? I don't know!, but analysts can and should (rather, have no excuse not to). It's possible to determine what information the C-suite had access to and how risky they believed the decision to be. Did they play fast and loose with peoples' livelihoods for a tiny chance of unsustainable profit? Might be a bad decision.
  - RestlessMind 3y ago
    It is board's job to evaluate C-suite's decisions. It is shareholders' job to appoint a proper board. Ultimately, the system has some flaws but generally it has worked pretty well over the past many decades.
    - bigtex88 3y ago
      So well. We've destroyed the planet but we have cheaper TV's, so that's a win in my book. /s
    - digging 3y ago
      I'm not talking about who is doing the evaluation. That's an obviously flawed process because the board has a stake in the company making unethical decisions for short term profit. I'm just describing what good decision making actually is. If you take an option with 20% chance of success, but few downsides if it fails and large returns if it succeeds, that's usually a good decision. If, however, the downsides are catastrophic, that's probably a bad decision. The situation here is that the downsides were arguably catastrophic, but completely externalized. The C-suite selfishly made bad decisions because it didn't affect them negatively. Doing so should reasonably have repercussions for them, but where's the incentive? An organization that places profit above all is intrinsically immoral and/or corrupt. This is obvious, we've just been allowing it for generations because we keep telling those who get hurt that things should probably work out on their own, eventually, or in the aggregate. And we convince people that an organization that places not being evil (not even martyring itself, just not doing horrible shit) just above profit can't exist. Would it be competitive? Maybe not, which is why regulation is actually useful - it can change the playing field so a company doesn't have to make that decision. (Of course, we already do this exact thing, but for extremely limited definitions of evil, and we also don't punish those evils very badly when they're committed.)
- candiddevmike 3y ago
  The CFO let Spotify hire all of these people based on his projections and assumptions, maybe he should've been one of them let go.
ensignavenger 3y ago
I agree, but the last time a major company tried to fire the C-Suite, the employees mutinied... More seriously regarding this decision in particular- I think there is an interesting and not straight forward question about whether companies should hire and fire freely, allowing for high employment at times as well as layoffs and low employment at other times (as well as risk taking), or should they be more careful and therefore have less employment when money is flowing freely and fewer layoffs when money is tight? The answer seems to be somewhere on a continuum, but different folks find a different point optimal. It seems there are successful societies built on policies promoting different answers as well. I can't default to faulting an individual for simply making a different decision than I might have preferred they make. I don't even know how much the Spotify CFO was involved in making these decisions in this case, maybe a lot, maybe a little, maybe they were against it but were over-ruled.

eej71 3y ago

It is ultimately the shareholders who reap these rewards.

wongarsu 3y ago

I'm not sure Spotify has really made any mistakes here though. They took a risk that didn't pan out. For an omnipotent being that would be a mistake, but for a person that only has the information available at the time it can still have been the right bet. Firing people when their bets don't pan out just leads to a risk averse culture that dooms any company to failure

Pentamerous 3y ago
But aren't layoffs ultimately a mistake? Shouldn't the stress of losing a job (also) be on the shoulders of who made the incorrect decisions?
digging 3y ago
Taking a risk that doesn't pan out can also be a bad idea, though. It depends on what the possible outcomes were and what the chances of each outcome were. The important thing to evaluating someone's decision making ability is to look at the decision they made with the information they had. Was it a good bet to dramatically overhire? I don't know!, but analysts can and should (rather, have no excuse not to). It's possible to determine what information the C-suite had access to and how risky they believed the decision to be. Did they play fast and loose with peoples' livelihoods for a tiny chance of unsustainable profit? Might be a bad decision.
- RestlessMind 3y ago
  It is board's job to evaluate C-suite's decisions. It is shareholders' job to appoint a proper board. Ultimately, the system has some flaws but generally it has worked pretty well over the past many decades.
  - bigtex88 3y ago
    So well. We've destroyed the planet but we have cheaper TV's, so that's a win in my book. /s
  - digging 3y ago
    I'm not talking about who is doing the evaluation. That's an obviously flawed process because the board has a stake in the company making unethical decisions for short term profit. I'm just describing what good decision making actually is. If you take an option with 20% chance of success, but few downsides if it fails and large returns if it succeeds, that's usually a good decision. If, however, the downsides are catastrophic, that's probably a bad decision. The situation here is that the downsides were arguably catastrophic, but completely externalized. The C-suite selfishly made bad decisions because it didn't affect them negatively. Doing so should reasonably have repercussions for them, but where's the incentive? An organization that places profit above all is intrinsically immoral and/or corrupt. This is obvious, we've just been allowing it for generations because we keep telling those who get hurt that things should probably work out on their own, eventually, or in the aggregate. And we convince people that an organization that places not being evil (not even martyring itself, just not doing horrible shit) just above profit can't exist. Would it be competitive? Maybe not, which is why regulation is actually useful - it can change the playing field so a company doesn't have to make that decision. (Of course, we already do this exact thing, but for extremely limited definitions of evil, and we also don't punish those evils very badly when they're committed.)
candiddevmike 3y ago
The CFO let Spotify hire all of these people based on his projections and assumptions, maybe he should've been one of them let go.

ensignavenger 3y ago

I agree, but the last time a major company tried to fire the C-Suite, the employees mutinied... More seriously regarding this decision in particular- I think there is an interesting and not straight forward question about whether companies should hire and fire freely, allowing for high employment at times as well as layoffs and low employment at other times (as well as risk taking), or should they be more careful and therefore have less employment when money is flowing freely and fewer layoffs when money is tight? The answer seems to be somewhere on a continuum, but different folks find a different point optimal. It seems there are successful societies built on policies promoting different answers as well. I can't default to faulting an individual for simply making a different decision than I might have preferred they make. I don't even know how much the Spotify CFO was involved in making these decisions in this case, maybe a lot, maybe a little, maybe they were against it but were over-ruled.