>> There's a culture of indifference, an embrace of mediocrity. I don't think it's new, but I do think perhaps AI has given the lazy and prideless an even lower energy route to... I'm not sure. What is the goal?
> I think pride in work has declined a lot (at least in the US) because so many large employers have shown that they aren't even willing to pretend to care about their employees. It's difficult to take pride in work done for an employee that you aren't proud of, or actively dislike.
Also don't discount the pressure exerted by employers to explicitly encourage mediocrity. So often, there's a huge amount of pressure to implement a half-working kludge and never pursue a more appropriate/complete fix. IMHO, it's all due to the focus on short-term financial results and ever present budget pressures that encourage kicking the can down the road.
If your employer is explicitly discouraging you from doing a good job, what are you supposed to do? Some people will resist, but they're definitely swimming against the current.
Most workers have learned that going above and beyond almost always backfires. Employers don't value long-term employment relationships, so working hard just results in you raising the bar for yourself, with no benefit.
A lot of these people were once starry-eyed highschoolers and college students who got burned too many times. They put in the time, the effort, the blood, sweat and tears, and what did they get? No thank you, just more work. Eventually they can't live up to the standard they themselves set, and they're let go. Meanwhile, bozos show up late and half-ass everything and then that becomes their expectation.
Dang, feeling this right now. Went above and beyond again and again, for years, barely got a thank you - let alone a raise of any sort. Now I’m completely burnt out and don’t have the energy to even consider my own ideas for my own next move.
GE [1]? Boeing [2] [3]? The stocks go up because management and shareholders pull forward the gains as financialization destroys the long term value of the enterprises. Works until it doesn't.
> Fatal Recklessness at Boeing Traces Back to Long-Standing C-Suite Greed
I suspect this is true to a certain extent, but IMO this narrative has been exaggerated to the point where it is completely useless. If Boeing execs were only focused on "short term profits," how did commercial aviation deaths decrease despite there being significantly more flights?
Are there actually more issues or are people just more aware of them? Like I said, commercial airline flights are significantly safer than they were in Boeing's supposed golden era despite these publicized scandals.
If your position is "well, it lasted this long and the organizational rot only killed a few hundred people" we may be unable to meet on this topic. How many deaths would be sufficient? I argue the decline in fatalities over time is due to commercial air traffic regulations and systems.
> "well, it lasted this long and the organizational rot only killed a few hundred people"
It should be clear that is not what I meant. This reinforces my view that popular criticism towards Boeing is unhelpful and ironically is relevant to the posted essay. People care more about gotchas more than deep discussion.
If the 737 Max incidents were due to negligence on Boeing's part, the many of the incidents in the 70s were also due to negligence. You can't have it both ways.
It’s not meant as a gotcha. It’s meant to illustrate that the effects of financialization, stripping an enterprise of its value, and the culture that enables this (of which short termism is a component) can take some time for the symptoms to surface. Boeing cared more about profits than safety, this is what the evidence shows. If you disagree, of course, you’re entitled to your opinion. I believe I’ve supported my thesis adequately with citations. It was a long corporate journey to the crash sites, but the journey is well documented.
(GE also took substantial time to fall apart, but with no deaths to my knowledge)
The problem is that the opposite is as destructive. Doing new things WILL cause accidents. And in the case of Boeing, of course it will result in planes failing.
And the "solution" to any level of this kind of criticism is really easy: do less, eventually do nothing at all anymore. But, in truth, that's even more destructive, in fact that that's happening is what this whole thread is about.
We need a balance. There needs to be some tolerance for risk, certainly at companies like Boeing.
>If the 737 Max incidents were due to negligence on Boeing's part, the many of the incidents in the 70s were also due to negligence.
They don’t necessarily have to be classified as the same contributing factors. The de Haviland Comet may have failed due to our lack of understanding of metal fatigue with a pressurized cabin. That was engineering ignorance. If a manufacturer did the same today, it’s negligence because those are known engineering principles.
Boeing was knowingly not following their own procedures for safety critical design. They also admitted to conspiracy to circumvent FAA oversight. Which of the above categories would you put those in?
We've learned a lot since then. Every time there's an accident, we learn from it and adjust the safety procedures. Incidents going down over time is to be expected, can't compare outcomes today with the past, after so much accummulated experience.
>> GE [1]? Boeing [2] [3]? The stocks go up because management and shareholders pull forward the gains as financialization destroys the long term value of the enterprises. Works until it doesn't.
> Boeing consistently went up for many decades prior to the MAX crisis. So did GE.
The point is they could have probably kept going up if they hadn't done that.
It's like how if you choose to eat your seed corn, you'll be fat and happy for a season, then you and your family will certainly starve to death next year. You'd most likely had lived if you hadn't made that short-term decision.
> Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down.
And how often are the "life cycles" really just the accumulation of bad short-term decisions catching up with the company?
You can kludge and kludge and kludge, but eventually that makes the app unmaintainable. Then you're in "total rewrite" or go under territory.
> It's like how if you choose to eat your seed corn, you'll be fat and happy for a season, then you and your family will certainly starve to death next year. You'd most likely had lived if you hadn't made that short-term decision.
Part of that is probably embedded in the environment. The market favors risk-taking. Everyone is dipping into their seed corn, hoping they can use the extra energy they have now to secure some new corn and cover for the surplus. Sometimes they can't, and they starve. More importantly though, anyone who didn't dip into their seed corn is no longer there - risking a bit gives you a competitive advantage over those who risk less.
This dynamics plays at multiple levels in large companies, and arguably is deeply embedded in the overall business culture.
It's not totally irrational either - "eating your seed corn" sounds stupid in isolation, but the calculus changes when every village around you is at war with you and everyone else, all while the whole region gets hammered by natural disasters. Saving the seed corn to survive the next year may end up killing you next week.
>And how often are the "life cycles" really just the accumulation of bad short-term decisions catching up with the company?
I do think technical debt is a real problem, but to play devils advocate, the “life-cycle” is often a pivot from “innovation” to “maintenance”. Companies rightly begin to focus on the aspects of business that make them money and will often cannibalize R&D to focus on high-margin areas. That’s why “mature” companies often focus on innovation via acquisition.
Perhaps that's the trick to longevity then, not seeking endless growth. All the oldest companies on earth seem to small, geographically contained entities (e.g., hotels, restaurants) https://en.wikipedia.org/wiki/List_of_oldest_companies
> No company goes up forever. They all eventually strangle themselves with bureaucratic inefficiency.
So they should act to strangle themselves faster? It feels like your reasoning is equivalent to, "Eventually you'll die, so there's no point taking care of your health. Go save money by avoiding the doctor, take up smoking, and eat junk food all the time."
Being relentlessly focused on the short term will do that, eventually.
You seem to think the assumption "all companies die" means you can simplify away their journey, but it matters if they get there faster or slower (at least to society, if not the decision-makers to maximize their personal profit while hoping to not being the ones left holding the bag).
> Old companies die and new ones take their place. This is not a problem for society. In most cases creative destruction is a net positive.
That's what they say, but I don't think it's true (at the high end, at least). For instance: if Boeing dies, the market will not replace it. It'll be an Airbus monopoly for large jets, and maybe the the communists will eventually build a competitor (Comac). IIRC, it's too expesnive for Embraer to make the jump into that market.
...which is why the market is supposed to have competition. Company strangles themselves with bureaucracy -> next company is ready to take over. But when a monopoly strangles itself with bureaucracy, there is no next company to take over and you get rent-seeking behaviour and unmotivated employees that just phone it in because they have nowhere else to go. End result: the public foots the bill for less quality at higher prices.
The book on GE is specifically about how they lied, cheated, and committed fraud -- er, accounting irregularities -- for decades, in order to maintain the illusion of number goes up predictably.
In retrospect, it was exactly as unlikely as Madoff's numbers.
But ALL of the FANGs pride themselves on predictably rising numbers. They all have a semi-believable story, and in fact only Amazon has a unique tactic (which is cheating taxes entirely by having zero profit, hence their revenue goes up predictably instead of profit. The others have steadily rising profit with slight variation in the rise of their revenue)
But all of them do it. Facebook/Meta, Amazon, Netflix, Google, Apple. Even the non-FANG fangs like Tesla, Twitter, ... and all have stories about faking it. Most are advertising and that's easy to fake on both sides (buy your own adertising, and of course fake engagement), Amazon has zero profit so they proudly declare they're faking it for the government (but, of course, they're not cheating you), Netflix has steadily rising subscriber numbers where everyone else has failed, even Apple's growth has switched to subscriber growth, the part of their business that would be the easiest to fake.
In fact this is quite common in the whole S&P 500, including outside of the US, with numbers not quite as dramatic as the FANGs, but still going up.
> Companies have life cycles. They grow until they become unable to function efficiently anymore, then they go down.
> It's not about prioritizing short term results.
Why did they need to grow in the first place though? If a company is already profitable, and growing will end up making them less functional and eventually erode profits, that sounds like it's due to prioritizing short-term results over long-term stable profits.
Boeing was forced by courts bolster safety, compliance, and quality programs as well as admitting to conspiracy to thwart FAA oversight. I don’t know about you, but my experience is that when companies undermine those types of oversight, it’s almost always due to schedule and price pressure (ie short term results). (Not to mention, the whole impetus for MCAS was to rush the design to market so they wouldn’t lose out on AA as a customer).
Again, the vast bulk of Boeing's history was before that.
> the whole impetus for MCAS was to rush the design to market so they wouldn’t lose out on AA as a customer
The impetus for MCAS was to make the MAX behave like the previous 737 model to reduce the expense of retraining the pilots.
In general, flying is safer when pilots do not need to "code switch" when switching airplane models. Many crashes result from a pilot reflexively doing the right thing for the previous airplane they flew, rather than the one they are flying at the moment.
>Again, the vast bulk of Boeing's history was before that.
I’m not sure what you intend to convey with this statement. If price reflects reality, the current price should reflect the current reality, no? Whether the White Sox were the best team 100 years ago has little bearing on my prediction about their chances this year. I fail to see how Boeing’s prior culture prevents them from succumbing to short term incentives. I know your point is the downfall is a bureaucratic one, but the evidence does not point to that (they actually cut corners on bureaucratic requirements).
>The impetus for MCAS was to make the MAX behave like the previous 737 model to reduce the expense of retraining the pilots.
Go deeper. Why was this considered necessary?
(Hint: it’s because they wanted to rush the design to market with a less expensive (and lower quality) product. Ie cost and schedule pressure. You stopped at the proximate cause.)
Boeing stock price still almost doubled in the past 10 years. Went up by hundreds of percent in the past two decades. GE stock is worth 40x what it was worth 40 years ago, when Jack Welsh took over management! These two seem like two very successful companies, led by succesful strategies.
Do stock prices even meaningfully represent anything anymore? Looking at some valuations makes me feel like it has all devolved entirely into gambling.
A lot of badly managed companies (or just companies in stagnant industries) saw their stock prices stagnate or fall. Boeing and GE had large rises though (meteoric in case of GE).
The value of a stock is based on long term results. If the investors catch wind of the company sacrificing the long term for the short term, the stock price will go down accordingly.
Stock price is pretty much completely unrelated to the performance of a company because the vast majority of investors have no idea what the fuck is going on in the company.
Look at Tesla. They're doing extremely poorly right now and have been for about a year, and if you look at their stock price you wouldn't think that. They're valued more than, like, every other auto manufacturer combined. Looking at that you'd expect them to hold 50% of the market in all markets they're in. But they don't get anywhere close to that.
The stock market is just gambling. You can't see the other person's hand.
So what is your thesis on GME? Long term play? It is literally a brick and mortar selling physical video games in an era where consoles are increasingly shipping without the ability to play physical media. And yet…
Not really. It’s based on expected future results. Sometimes that’s based in reality, sometimes it’s hopes and dreams. How else do you explain companies that have never made money being having any positive stock price?
There are no “results” just projections.
We probably agree that the stock will eventually reflect value. I think we’d quibble about how long that takes. As the saying goes, the market can remain irrational longer than you can remain solvent. In other words, don’t bet on the market always reflecting reality.
I don’t see that happening in practice, because the competitors are focusing on the short term as well. Another reason is that it is easy to deceive customers about the relative qualities of a product as long as it is cheaper than the competition. So it’s rather the short-termists that are driving a race to the bottom (or at least to
mediocrity).
The most successful companies, in my experience, are not successful because they're so much more awesome than everyone else. They are successful primarily because of luck... the luck of having competitors that suck total ass.
Microsoft, for instance... or in more modern times, Tesla.
I wouldn't put Boeing into that category, though -- it took more than just a lack of good competition to accomplish what they did, back in the day.
Buybacks do not do that any more than dividends do. Buybacks merely allow publicly listed stock owners to precisely time their capital gains tax events.
Surely, there is some amount of income that a business’s owner is allowed to pocket without bad intentions, which may or may not come at the cost of long term investments. Especially in stable/declining businesses.
No, buy packs are pure market manipulation. There is a reason why they were banned prior to 1982. It's a SEC rule that can easily be reversed too but the rich love their ability to manipulate markets for their benefit.
> Buybacks do not do that any more than dividends do.
There's at least a clear relationship if the dividend is reinvested.
If the dividend is spent, though, eg by someone in retirement, then they're different. Under buybacks, the retiree would have to sell some shares to get cash, and would eventually run out. Under dividends, the retiree would be able to continuously pocket money.
stock markets are indices of successful companies; you need to look at the composition. The metric I would look at is the age of the companies in the S&P 500 or similar, and that IS increasingly skewing young, which shows both a focus on the short term and increasing markets
The focus on short term results could generally be true. Perhaps... generally nothing is true though of course.
(1) consider how many stocks are delisted and/or go out of business. We might be thinking with survivorship bias. A cook google gave this headline "America has lost 43% of listed companies since 1996" (though, more research would be needed to really be sure that's accurate and to determine any more nuances that might be important).
(2) If there are an ever-present amount of short term rewards/results, then we would get growth. A series of short term growth would be hard to distinguish from long term growth.
(3) Long term and short term growth can be mixed, and the strategy does not have to be static. A company could hop back and forth between them. This point contradicts the premise a bit, at the same time we can't discount long term from the noise that we see (it could be signal).
(4) Stock price is not necessarily always tied to financial results. It's supposed to be the sum of all future revenue divided by the number of shares (or something like that), thus, stock price is in part also the expectation of revenue and not actual revenue. Tesla is a notable example, the price of their stock is still very high, with anticipation of amazing revenue gains, but recently their revenue has not been growing by a ton.
The financial industry isn’t immune to “who cares”-ism, or folks who are bad at their jobs. Heck, the index fund is the ultimate “who cares?” product - you’re explicitly saying that you don’t care about underlying fundamental valuations and are going to piggyback off the price discovery mechanism of other active investors, and you accept average returns as a result.
In practice, financial results are driven by transactions, and so any mediocrity that doesn’t lead to the customer going elsewhere isn’t going to show up in the financial results. You need an actual competitor to risk losing money to sucking. But I’ll note that in cases where there is an actual competitor to sclerotic old industries, one that actually does care, the investors in the competitor tend to become fabulously wealthy and the investors in the old industry go broke.
Stocks suck up all the value. For example the value of a house is in the living space it provides. If you convert it to money, you end up with... money.
are you discounting the supply of new companies that continually replace the decliners? What's happening to those the previously existed for 50+years? Will we ever see a new company last 100+ years?
This perfectly illustrates why I've always preferred working at startups over major corps including FAANG / MANGA.
There is a top down culture of not embracing mediocrity that genuinely makes me thrive at work. My current company has a good work life balance and if I make a point that some part of the system needs improvement, my voice actually gets heard. Only place I've seen where sprint retros actually made impact. Most of my friends have no work life balance and also don't have a voice when they see half-assed work.
The numbers showcase the effect of this as well. The startup has thrived even when VC's have tightened their purses.
Unfortunately it’s becoming more obvious that “short-term” is all we really have in this world. There is no long term.
So why plan for long term? Life is a series of short-term wins until you finally die. Same with companies. Things change so fast now that you could be crushing it one year and going out of business the next. It’s not like old days where you could setup a blacksmithing shop and have business for generations.
I think your comment comes from a very specific point of view. Like software/tech jobs. (Even there you have long term stuff that we all would definitely benefit from).
There are so many things where short-term only thinking is counter-productive. It swallows money, creates frustration and leaves an overall net-negative to society and the world.
Just one example would be city planning. Repairing a road? What else is there like fiber cables, maybe some tram tracks, and so on, long term planning would be to acquire a holistic picture and to plan one timespan where everything is done fast but with quality. It’s a few months construction, after that everything is fine for years or even a few decades to come. But what you see instead is one part of the state that manages fiber cables doing there own thing, another part that manages street quality do their own thing. So the street has a construction site for a year (for just improving one part) then a few months nothing then another year of construction again, nothing, construction and soon you have over a decade of constant on and off construction work on this one street. Something that could’ve been done in 6-12 months once and be done, if planned correctly and with long term and holistic picture in mind.
And this is just one example. The world is full of stuff like this. Short term might be a good thing for very specific types of projects, but I hard disagree that short term is overall better in any way.
In my opinion this shortterm thinking is a huge negative factor of modern societies. Because not everything is a tech startup where things change super fast.
> Unfortunately it’s becoming more obvious that “short-term” is all we really have in this world. There is no long term.
That's definitely not true. It sounds like a rationalization for the existing bad and unwise behavior.
> So why plan for long term? Life is a series of short-term wins until you finally die.
So, dump the untreated toxic waste into the river, then?
> Same with companies. Things change so fast now that you could be crushing it one year and going out of business the next. It’s not like old days where you could setup a blacksmithing shop and have business for generations.
Maybe if you're in some startup, but that's not the usual case.
> Results now are way better than results later.
So be "very proud [for taking] home a salary for about two hours of work per day following up with contractors, then heading to the gym and making social plans."?
It's not just a political derail to bring up a highly-visible example of the described behaviour. People don't care if they aren't forced to care, and in a world driven by deadlines, we're only motivated to care a certain amount.
There used to be an intrinsic motivator of "well, my kids are going to suffer if I don't push for long-term relationships", but now we aren't having kids, so that carrot doesn't work, and that attitude is bubbling up into the corporate world.
Sure, but let's be clear, we shouldn't be taking any lessons from the Trump regime on how to live in virtually any aspect in one's life. If anything they're a shining example of everything not to do.
I think they mean (to stretch the analogy), we are razing trees to build rapidly changing highways so much now that the tree you plant today may be chopped down in a couple of years through no fault of your own.
> Unfortunately it’s becoming more obvious that “short-term” is all we really have in this world. There is no long term.
The opposite seems far more obvious to me. Short-term results aren't going to last. Planning for the long-term - whether that's a career, family, or whatever - is critical to a fulfilling and healthy life.
Seems self evident that increasing pace of change of society tilts the rational strategy towards short-term over long-term gain.
Do people disagree that the pace of change is increasing? Do people disagree that short termism is rationally appropriate in a highly changeable situation? Long term planning requires a stable backdrop. I agree with you.
> I think pride in work has declined a lot (at least in the US) because so many large employers have shown that they aren't even willing to pretend to care about their employees. It's difficult to take pride in work done for an employee that you aren't proud of, or actively dislike.
Also don't discount the pressure exerted by employers to explicitly encourage mediocrity. So often, there's a huge amount of pressure to implement a half-working kludge and never pursue a more appropriate/complete fix. IMHO, it's all due to the focus on short-term financial results and ever present budget pressures that encourage kicking the can down the road.
If your employer is explicitly discouraging you from doing a good job, what are you supposed to do? Some people will resist, but they're definitely swimming against the current.