> My personal theory is that this is the result of an incompetent management class where no self corrections are happening.
Close. They're not incompetent; we just redefined competence.
It used to be that competence was a mix of a lot of distinct, but interdependent, qualities. The end result was synergy that allowed for people and organizations (including companies) to compete and move society forward.
In the 1970s, we started to allow a bunch of psychopaths (I'm saying this in the clinical sense) to redefine competence. Instead of this array of distinct qualities, they just defined it in terms of ability to create monetary value, particularly if that value was then transferred to shareholders. That was it.
We also switched to quarterly reporting for for-profit companies, shrinking the window to evaluate this new definition of competence to 90 days. Three months.
An end result of this was that you could simply do whatever made the most money in 90 days and be considered competent.
Jack Welch was the paragon of this. GE shareholders saw massive gains during the latter half of his tenure at the helm. This wasn't because of groundbreaking new products or services; quite the opposite: Jack realized that selling off divisions and cutting costs by any means necessary was a good way to make money in the 90 day period. Institutional knowledge and good business relationships in the market - two of the elements of the former definition of competence - were lost, while money - the sole element under which competence was judged in the new definition - went up.
You also had managers doing a lot of the avoidance of real management, like you speak of. Instead of betting on a new product or trying to enter a new market, they took a Six Sigma course, learned a bunch of jargon, and cut costs at the expense of business past the 90 day period.
If you do this enough (and we did, far beyond just GE), that expense is taken at the societal level. Existence extends beyond 90 days. You can't mortgage the future forever. It's now the future, the payment is due, and we have an empty account to draw from.
Theoretically, we could go back to a more in-depth evaluation of competence and reward its display over the long term. In practice, there are a bunch of people who got unfathomably wealthy off of the shift to the "new" competence, and now they're in charge and don't want to switch back, so we won't.
In the Haudenosaunee system of governance, whenever they needed to make a consequential decision, the family-clan-appointed leaders would nominate some sub-group of the circle to represent the interests of the unborn 7 generations in the future. That's far enough into the future, ~100+ years, that the youngest person alive today to experience decision would certainly be deceased before the generation is born.
On a long enough time scale, short-term oriented systems naturally-select themselves out of existence. The U.S. Constitution didn't survive 7 generations. The Civil War was in 1865 (77 years, ~4 generations). Reconstruction Era made it maybe 60 years (3 generations), as far as the Great Depression / Dust Bowl.
The current post-war ordering of the interest of short-term capital above all else doesn't have a well-defined start date, but 1968 (MLK Jr, RFK, nomination of Humphrey) is a solid one. We're hardly 3 generations in, and it doesn't feel great.
Really, when you look at American history, the periods endowed with bouts of long-term thinking are really quite rare (1770-1810, 1880s-1900s, 1930s-1950s). Maybe we're due for another one.
The U.S. Constitution didn't survive 7 generations. The Civil War was in 1865 (77 years, ~4 generations).
I know the 13th, 14th, and 15th amendments to the US Constitution are often considered America's Second Founding because they legally eliminated [1] all the elements of racism within the United States Constitution, but saying that the Constitution "didn't survive" doesn't see accurate...
[1] That being said we all know that it took many many decades after those 3 amendments for the laws in the United States to accurately reflect the principles embodied within these amendments.
The systems of governance pre-ACW and post-ACW were two distinct systems. The pre-ACW was essentially two competing systems of power duct-taped together with the 3/5ths amendment. The post-ACW was one dominant system of power that had beaten another into submission and annexation.
The 3/5ths compromise, and its implicit enshrinement of slavery as an American institution, is as an example of short-term thinking (compromising on the legal definition of a human being, in order to get the constitution ratified) that eventually caused the greater system to unravel. Hundreds of thousands of people died in the civil war, millions of people experienced slavery. It could have been avoided if longer-term thinking prevailed.
I hear you that the Constitution (inclusive of its self-mutating property) survived as a useful document of federal governance. This purported maintenance of a federal union was a huge legitimizer of northern domination of the post-ACW United States. But, I think you'd agree that the "system of governance" that begat the constitution did not survive, that's more what I was getting at. That each successive system of governance can still legitimately claim to be implementing the U.S. Constitution is indeed impressive.
Basically prior to the American Civil War the Bill of Rights was considered to only apply to the Federal government and not the state governments.
After the Civil War, the US Supreme Court interpreted the 14th amendment such that overtime all the amendments of the Bill of Rights were considered to apply to the states as well.
So what you are saying about one system being dominant over the other system (Federal government being dominant over the state governments) makes sense and it is something that seems to have happened more extensively after the Civil War.
Strangely enough my experiences are mostly from smaller companies that are not public traded in Germany - so very different from a typical US public company, my bosses might had sociopathic traits but I doubt that it's true for all of them - it's more the complete disregard for the product quality and disregard for investing in your employees and the inability to solve more complicated issues that is pervasive through all these gigs. I'm talking about terrible UI and software bugs. Not some small debatable things.
Maybe it's really about wrong incentives and lack of technical excellence.
Government money keeps coming in and making it broken and buggy actually assures ongoing contracts. Investment in skilled workers or solving technical issues is not paid for and everyone - company and customer are completely disconnected from the end user and feedback mechanisms are broken or manipulated.
It's maybe a mix of all the different answers my post got.
Close. They're not incompetent; we just redefined competence.
It used to be that competence was a mix of a lot of distinct, but interdependent, qualities. The end result was synergy that allowed for people and organizations (including companies) to compete and move society forward.
In the 1970s, we started to allow a bunch of psychopaths (I'm saying this in the clinical sense) to redefine competence. Instead of this array of distinct qualities, they just defined it in terms of ability to create monetary value, particularly if that value was then transferred to shareholders. That was it.
We also switched to quarterly reporting for for-profit companies, shrinking the window to evaluate this new definition of competence to 90 days. Three months.
An end result of this was that you could simply do whatever made the most money in 90 days and be considered competent.
Jack Welch was the paragon of this. GE shareholders saw massive gains during the latter half of his tenure at the helm. This wasn't because of groundbreaking new products or services; quite the opposite: Jack realized that selling off divisions and cutting costs by any means necessary was a good way to make money in the 90 day period. Institutional knowledge and good business relationships in the market - two of the elements of the former definition of competence - were lost, while money - the sole element under which competence was judged in the new definition - went up.
You also had managers doing a lot of the avoidance of real management, like you speak of. Instead of betting on a new product or trying to enter a new market, they took a Six Sigma course, learned a bunch of jargon, and cut costs at the expense of business past the 90 day period.
If you do this enough (and we did, far beyond just GE), that expense is taken at the societal level. Existence extends beyond 90 days. You can't mortgage the future forever. It's now the future, the payment is due, and we have an empty account to draw from.
Theoretically, we could go back to a more in-depth evaluation of competence and reward its display over the long term. In practice, there are a bunch of people who got unfathomably wealthy off of the shift to the "new" competence, and now they're in charge and don't want to switch back, so we won't.