Obliquity

Researchers agree this effect is real. They do not agree on how strong it is, and that argument is still going on. So you can trust the direction, but not any exact number.

The economist John Kay poses a puzzle. The most profitable companies are rarely the ones most focused on profit, and when a profitable company decides to focus directly on profit, the decline often begins there. He filled a book with case studies of the pattern. A firm spends decades led by people obsessed with the product, the science or the customer, and wealth arrives as a side effect. A new generation takes over, declares that the real goal is shareholder value, reorganises everything around the financial target, and the greatness drains away, followed eventually by the profits. His explanation is that profit is the residue of many things done well for their own sake, so aiming directly at it means cutting exactly those things, because on a spreadsheet they look like costs. It is important to say plainly that this is an argument supported by examples, not a controlled result.

Some goals are reached more reliably by aiming at something else. That is uncomfortable, because it cannot be turned into a target, and anything that cannot be turned into a target tends to lose the argument for resources. The practical use is as a warning rather than a method. When you notice an organisation converting everything into a direct measure of the thing it wants, watch what gets cut to hit the measure, because that is usually the machinery that produced the thing in the first place.

Source: Kay, Obliquity, 2010. An argument illustrated by case studies rather than an experimental finding.

Draw your own card. It does not take long, and it rewards taking your time.