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> an auto company, or an aircraft company, In both we are seeing how professional management can decimate a company with several decades of history. e.g Boeing

> an auto company, or an aircraft company, In both we are seeing how professional management can decimate a company with several decades of history. e.g Boeing.

KaiserPro 2y ago
> professional management Management incentivised to grow stock market value. look, if the incentives are wrong then you get distortions. A good example with "founders" is wework. Wework's innovation was two fold: zeroth) vast funding one) run the company like a mystery cult two) Have beer in a shared office Everything else is exactly what a shared office company does. WeWork's entire incentive was to grow as fast as possible and get as many customers as possible. No one cared about business fundamentals, because WeWork wasn't a buisness. It was a commodity to be traded by softbank. Buisness fundamentals have been royally fucked by changes in finance. Stock buybacks, limp monopoly actions, toothless market regulation, have all meant that profit is one thing, but share price is everything. The capitalism that made boeing et al is not the capitalism that we live in now.
- Animats 2y ago
  WeWork was a finance concept. Lease commercial real estate in bulk long term, subdivide and sublease it short term, and borrow medium term to finance it. That's a speculation on interest rates and short-term commercial real estate rents. The CEO got a really good exit package from Softbank.[1] [1] https://en.wikipedia.org/wiki/Adam_Neumann#Business_career https://en.wikipedia.org/wiki/Adam_Neumann#Business_career
- fsndz 2y ago
  Regarding Boeing, it's true that the principal-agent problem and misaligned incentives are issues. However, you must also consider the impact of promoting business school graduates and McKinsey-type consultants—who often believe they are the smartest people in the room, despite lacking operational expertise beyond making slides—to leadership positions in a company driven by engineering. Naturally, these business types will focus on short-term revenue and stock prices, as they have been trained their entire lives to optimize for vanity metrics like GPA, company prestige, and strategy over operations. This mindset is ingrained in their identity, leading them to undermine the engineering culture. For instance, Boeing's CEOs reportedly referred to engineering leaders as "retards" and "losers." Now, we are witnessing the consequences of these actions.
twelve40 2y ago
Boeing is a very strange example to give for this, because it's been under "professional management" for probably one whole century now. How does professional management suddenly decimate it today vs. say 1960, when it was also run like a corporation?

> an auto company, or an aircraft company, In both we are seeing how professional management can decimate a company with several decades of history. e.g Boeing.

KaiserPro 2y ago

> professional management Management incentivised to grow stock market value. look, if the incentives are wrong then you get distortions. A good example with "founders" is wework. Wework's innovation was two fold: zeroth) vast funding one) run the company like a mystery cult two) Have beer in a shared office Everything else is exactly what a shared office company does. WeWork's entire incentive was to grow as fast as possible and get as many customers as possible. No one cared about business fundamentals, because WeWork wasn't a buisness. It was a commodity to be traded by softbank. Buisness fundamentals have been royally fucked by changes in finance. Stock buybacks, limp monopoly actions, toothless market regulation, have all meant that profit is one thing, but share price is everything. The capitalism that made boeing et al is not the capitalism that we live in now.

Animats 2y ago
WeWork was a finance concept. Lease commercial real estate in bulk long term, subdivide and sublease it short term, and borrow medium term to finance it. That's a speculation on interest rates and short-term commercial real estate rents. The CEO got a really good exit package from Softbank.[1] [1] https://en.wikipedia.org/wiki/Adam_Neumann#Business_career https://en.wikipedia.org/wiki/Adam_Neumann#Business_career
fsndz 2y ago
Regarding Boeing, it's true that the principal-agent problem and misaligned incentives are issues. However, you must also consider the impact of promoting business school graduates and McKinsey-type consultants—who often believe they are the smartest people in the room, despite lacking operational expertise beyond making slides—to leadership positions in a company driven by engineering. Naturally, these business types will focus on short-term revenue and stock prices, as they have been trained their entire lives to optimize for vanity metrics like GPA, company prestige, and strategy over operations. This mindset is ingrained in their identity, leading them to undermine the engineering culture. For instance, Boeing's CEOs reportedly referred to engineering leaders as "retards" and "losers." Now, we are witnessing the consequences of these actions.

twelve40 2y ago

Boeing is a very strange example to give for this, because it's been under "professional management" for probably one whole century now. How does professional management suddenly decimate it today vs. say 1960, when it was also run like a corporation?