Nick Cullather:
“...Americans increasingly digested their information in
numerical form. After 1905, gamblers judged horses by the portents in the
Racing Form and baseball fans sized up hitters by the tables in The Sporting
News. Newspapers published an avalanche of statistics evaluating business
acumen by quarterly earnings, literature by copies sold, and drama by the
number of weeks on Broadway. Many observers considered such quantitative
reasoning a national trait. 'If the English are a nation of shopkeepers,
Americans are a nation of expert accountants', critic and playwright Eugene R.
White observed..."
Max H. Bazerman and Ann E. Tenbrunsel, The New York Times, April 2011:
"...When we are busy focused on common organizational
goals, like quarterly earnings or sales quotas, the ethical implications of
important decisions can fade from our minds. Through this ethical fading, we
end up engaging in or condoning behavior that we would condemn if we were
consciously aware of it.
The underlying psychology helps explain why ethical lapses
in the corporate world seem so pervasive and intractable. It also explains why
sanctions, like fines and penalties, can have the perverse effect of increasing
the undesirable behaviors they are designed to discourage..."
John Cassidy, The New Yorker, November 29, 2010:
"...On Wall
Street dealing desks, profits and losses are evaluated every afternoon when
trading ends, and the firms’ positions are “marked to market”—valued on the
basis of the closing prices. A trader can borrow money and place a leveraged
bet on a certain market. As long as the market goes up, he will appear to be
making a steady profit. But if the market eventually turns against him his
capital may be wiped out. “You can create a trading strategy that overnight
makes lots of money, and it can take months or years to find out whether it is
real money or luck or excessive risk-taking,” Philippon explained. “Sometimes,
even then it is hard.” Since traders (and their managers) get evaluated on a
quarterly basis, they can be paid handsomely for placing bets that ultimately
bankrupt their companies. “In most industries, a good idea is rewarded because
the company generates profits and real cash flows,” Philippon said. “In
finance, it is often just a trading gain. The closer you get to financial
markets the easier it is to book funny profits...."
I have worked in organizations who were obsessed with
quarterly performance.
Sometimes I thought there was little else happening.
You closed the current quarter and projected the next. Or you closed the next
quarter and projected the current. Or whatever.
The person who was an outstanding employee got fired in the
next and the person who was an obscure also-ran became the guy to watch.
Artist: Sam Gross, The New Yorker, January 11 1993
Now, I share another great cartoon I came across in March 2014
Artist: David Borchart, The New Yorker, March 2014
Was man's life as boring as this, even in caves?
