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That's a different issue than the "regulatory environment around energy and production". And "If short term incentives were having long term negative impacts

That's a different issue than the "regulatory environment around energy and production". And "If short term incentives were having long term negative impacts the corporate feedback mechanisms would have picked up on it by now" Tells me you either don't live in the real world or are being purposefully disengenious. Most real decision makers plan to remain in their role for at most 5 years before moving up. That definitely encourages short term success. And much more importantly, if the compensation structure of the CxO is such that 99% of monetary compensation comes from vesting on a quarterly basis only if the stocks price or earnings hit specific targets over that short term, how does this translate to long-term success? Real-world, concrete, linkable examples only, please

roenxi 3y ago
> That's a different issue than the "regulatory environment around energy and production". The incentives are being set to take best advantage of the realities on the ground. Apart from Apple, no-one is taking over markets by fighting the general quality decline. You're arguing that there is a lot of shortermism going on. Fair enough. But shortermism is proving to be a good long term strategy, because the alternatives failed. Not for lack of interest, but because the regulatory state and harsh realities of energy constraints crushed them. > Most real decision makers plan to remain in their role for at most 5 years before moving up. I'm glad we've managed negotiate up from quarterly stock prices to 5 years. But note that China is run on 5 year plans - executing complex long term strategies is possible in 5 year steps with a reorientation every so often. 5 year time horizons can be compatible with long term planning. Note that this is in line with what the investors are comfortable with - they don't think there is an advantage to be gained from keeping CEOs long term. And they're right I expect, getting involved int he money printing exercise that the central banks have been pushing is generally much more important than focusing on technical outcomes and you don't need long-term incumbent CEOs for that. > ...how does this translate to long-term success? Unless you're 108, Boeing is older than you are. This has been their routine operating procedure since ... the 1980s? Sometime around that era. They're doing pretty well.
- p_l 3y ago
  Boeing explicitly started changing their routine operating procedures in second half 1990s. Unlike some claim, it actually started with a Boeing "lifer", but who also bought into Jack Welch management thought. They have considerably changed in the last 24 years, with memos about dangers of it coming from Boeing since ~2001, and that it wouldn't be something immediate but "creeping" issue.
  - roenxi 3y ago
    I don't have anything much to say to that, but I can't resist observing in passing as a comment chain we've escalated from quarterly shortermism to a management transformation process that played out over 24 years at remarkable speed. If after a quarter-century Boeng have reduced their standards to still-better-than-road-safety, I don't think it is fair to say their management are doing anything that badly wrong.
    - p_l 3y ago
      In pursuing quarter by quarter benefits, in fact some of it happened across only 2 years, they have set up long-term disaster that impacted their ability to design, build, and deliver - first with 7E7 (now known as Dreamliner), then with 737 MAXX series and the inability of Boeing to either take on a new venture like 757 upgrade or a new plane based on 7E7 project but in smaller class (This is, btw, big part of how A350 happened - reusing results of investment in A380). Some things take long to build (or correct), and very short time to destroy. And with Boeing it's more that the ongoing disaster known as MAXX took away the blinders from wider population in very... brutal and public way.
      - roenxi 3y ago
        That is a relatively consistent story across all the US-related industrial articles I take notice of on HN. The US can't build semiconductors, the US can't build ships, the US isn't building houses, struggles with infrastructure, etc. masks and ventilators through COVID. Now planes. This isn't being driven by management. Everyone can see what is happening from a mile away including shareholders. This is a rational response to the regulatory environment that US manufacturing operates in. And a specific symptom of that which is the US has failed to secure its access to cheap plentiful energy.

roenxi 3y ago

> That's a different issue than the "regulatory environment around energy and production". The incentives are being set to take best advantage of the realities on the ground. Apart from Apple, no-one is taking over markets by fighting the general quality decline. You're arguing that there is a lot of shortermism going on. Fair enough. But shortermism is proving to be a good long term strategy, because the alternatives failed. Not for lack of interest, but because the regulatory state and harsh realities of energy constraints crushed them. > Most real decision makers plan to remain in their role for at most 5 years before moving up. I'm glad we've managed negotiate up from quarterly stock prices to 5 years. But note that China is run on 5 year plans - executing complex long term strategies is possible in 5 year steps with a reorientation every so often. 5 year time horizons can be compatible with long term planning. Note that this is in line with what the investors are comfortable with - they don't think there is an advantage to be gained from keeping CEOs long term. And they're right I expect, getting involved int he money printing exercise that the central banks have been pushing is generally much more important than focusing on technical outcomes and you don't need long-term incumbent CEOs for that. > ...how does this translate to long-term success? Unless you're 108, Boeing is older than you are. This has been their routine operating procedure since ... the 1980s? Sometime around that era. They're doing pretty well.

p_l 3y ago
Boeing explicitly started changing their routine operating procedures in second half 1990s. Unlike some claim, it actually started with a Boeing "lifer", but who also bought into Jack Welch management thought. They have considerably changed in the last 24 years, with memos about dangers of it coming from Boeing since ~2001, and that it wouldn't be something immediate but "creeping" issue.
- roenxi 3y ago
  I don't have anything much to say to that, but I can't resist observing in passing as a comment chain we've escalated from quarterly shortermism to a management transformation process that played out over 24 years at remarkable speed. If after a quarter-century Boeng have reduced their standards to still-better-than-road-safety, I don't think it is fair to say their management are doing anything that badly wrong.
  - p_l 3y ago
    In pursuing quarter by quarter benefits, in fact some of it happened across only 2 years, they have set up long-term disaster that impacted their ability to design, build, and deliver - first with 7E7 (now known as Dreamliner), then with 737 MAXX series and the inability of Boeing to either take on a new venture like 757 upgrade or a new plane based on 7E7 project but in smaller class (This is, btw, big part of how A350 happened - reusing results of investment in A380). Some things take long to build (or correct), and very short time to destroy. And with Boeing it's more that the ongoing disaster known as MAXX took away the blinders from wider population in very... brutal and public way.
    - roenxi 3y ago
      That is a relatively consistent story across all the US-related industrial articles I take notice of on HN. The US can't build semiconductors, the US can't build ships, the US isn't building houses, struggles with infrastructure, etc. masks and ventilators through COVID. Now planes. This isn't being driven by management. Everyone can see what is happening from a mile away including shareholders. This is a rational response to the regulatory environment that US manufacturing operates in. And a specific symptom of that which is the US has failed to secure its access to cheap plentiful energy.