I used to do consulting work with C level execs at Fortune 500s.
One of the most interesting points that was made was that you could look at what the marketing department’s focus was and determine the metric the CMO’s bonus was tied to. A huge focus on new user signups (even at the cost of existing customer churn)? CMO was being evaluated on number of new users.
Well public companies overall are evaluated on a quarterly basis within their stock market fillings. Beat your quarter? The market and the board are happy. Fell short? The CEO may find themselves out of a job as the company chases getting back to beating their quarter.
The problem is, that’s an incredibly stupid bar to use as effectively the sole measure.
It’s lead to things like Dell being on top of the electronics market and being the first to outsource support to try and save a few percent for the quarter and ending up the butt of jokes that dropped their market share significantly within a few years (even though everyone then followed suit).
And in the case of oil companies, it led to catastrophic mismanagement where the focus on today and the quarter meant sacrificing the entire world long term.
How might this have looked if instead the evaluation metric was a 50 year forecast? Would it have still been prudent to bury and ignore research, or would it have been wise to invest heavily in R&D in alternative energy that might pay off in 20-30 years but you’d have been ahead of your competitors because you were first to identify the forecasted impact of the status quo?
The Corporation, not AI, is the thing that will continue to make paperclips until it destroys humanity if it’s improperly aligned.
And you align corporations by setting the measurements on which their success is evaluated. And we’ve somehow set it on 3 month increments.
An oversight which has likely already killed us all.
It’s because of the choice of measurement.
I used to do consulting work with C level execs at Fortune 500s.
One of the most interesting points that was made was that you could look at what the marketing department’s focus was and determine the metric the CMO’s bonus was tied to. A huge focus on new user signups (even at the cost of existing customer churn)? CMO was being evaluated on number of new users.
Well public companies overall are evaluated on a quarterly basis within their stock market fillings. Beat your quarter? The market and the board are happy. Fell short? The CEO may find themselves out of a job as the company chases getting back to beating their quarter.
The problem is, that’s an incredibly stupid bar to use as effectively the sole measure.
It’s lead to things like Dell being on top of the electronics market and being the first to outsource support to try and save a few percent for the quarter and ending up the butt of jokes that dropped their market share significantly within a few years (even though everyone then followed suit).
And in the case of oil companies, it led to catastrophic mismanagement where the focus on today and the quarter meant sacrificing the entire world long term.
How might this have looked if instead the evaluation metric was a 50 year forecast? Would it have still been prudent to bury and ignore research, or would it have been wise to invest heavily in R&D in alternative energy that might pay off in 20-30 years but you’d have been ahead of your competitors because you were first to identify the forecasted impact of the status quo?
The Corporation, not AI, is the thing that will continue to make paperclips until it destroys humanity if it’s improperly aligned.
And you align corporations by setting the measurements on which their success is evaluated. And we’ve somehow set it on 3 month increments.
An oversight which has likely already killed us all.