| When you give people a target and it is the ONLY thing they care about, people find a way to hit it. So be careful what you measure and you reward. For every company cash flow and profits are undoubtedly the most important metric. It is almost impossible to argue that maximize those numbers should NOT be a goal. At the same time when that becomes the ONLY target that matters, the consequences are dreadful. At least in US, that is how we ended up with appliances that only last a small fraction of time that used to last 40 years ago. And even worse it is how we ended up with the food industry creating more and more addicting food resulting in 70% of the population be obese.
And it is how we ended up with a heath system that costs multiples of what costs in any other country in the world, that, instead of healing people for good, make them "less sick" addicting them to a few pills for the rest of their life. Because there is no money to be made with a healthy person. When you build KPIs, make sure you "think a few moves ahead" and you put other correcting metrics and checks in place. At least make sure who establishes the metrics has a way to become aware of the possible shortcomings and plan corrections in a timely manner. |
Except for VC backed startups. Actually, there are a lot of exceptions. But those mostly revolve around caveats surrounding riskiness and timelines.