The problem with fast feedback loops is that they filter out long term signals. The problem with data driven decision making is that data is numeric, and the act of counting is necessarily an act of approximation, by which we erase the difference between objects or events in order to bucket them into a category so that they can be counted. So the kind of dashboards that modern managers demand, offer nothing but the most obvious, short term "insights", that you might as well eliminate the man in the middle and feed the data directly into a set of simple decision rules.
> The problem with data driven decision making is that data is numeric, and the act of counting is necessarily an act of approximation, by which we erase the difference between objects or events in order to bucket them into a category so that they can be counted.
Yes, this is exactly right. To put it another way: When we quantify something, we abstract away everything about that thing that is not quantifiable. So our thinking is only about a tiny aspect of that thing's existence.
> we abstract away everything about that thing that is not quantifiable
It's worse, we simply abstract away everything else, including innumerable things that are quantifiable.
Everyone quotes Goodhart's law, but I think the McNamara fallacy is even more important nowadays. It should be read aloud to every CEO every day.
https://en.wikipedia.org/wiki/McNamara_fallacy
TLDR: Making a decision based on only qualitative data, and therefore ignoring qualitative information and observations, can lead to bad outcomes. Not everything that is important can be easily measured.
These bad outcomes aren't coming. Maybe we as customers don't like it but it doesn't mean the companies are suffering for it.
For example, McDonald's reported a full-year 2025 net income (profit) of $8.563 billion, an increase from the $8.223 billion reported in 2024.
Spirit of Capital Accumulation be praised!
May 'annual profit' continue to be the only measure that has mattered, does matter, or will ever matter to those that bask in the radiance of perpetual earning growth!
The large multi-national corporation known as "McDonald's" should care about its family, friends, and personal fulfillment instead?
You may have no memory of it, but there was a time when many American corporations had different, broader values. The structure of the present is not necessary or inevitable.
Did they really have broader values or did they just not have the technical sophistication to optimize their operation to this level? Where "values" just a substitute for more limited information?
I think computers have made the structure of the present inevitable.
Really think about it for a second; $8.5 billion in profit. That's an insane amount of money. How many companies with that kind of profit are actively dodging taxes from aggressive accounting, getting deals with local governments, or any other way? Not that the government would spend the extra tax revenue wisely. Instead, what if they took $1 billion of that to increase the pay of the lowest earning employees significantly while not increase the highest earners at all, or paying 100% of health care (medical, dental, vision, and mental), or any of the other things to help improve employee relationships. Then, start focusing on the external things that could be directly improved by taking less profit to improve things for those so much is taken. That's still $7.5 billion in profit.
> How many companies with that kind of profit are actively dodging taxes from aggressive accounting, getting deals with local governments, or any other way?
I don't think it's fair to imply that McDonald's is doing anything shady. They have over 2 million workers (although not directly, it's a franchise model). They make a lot of profit but, proportional to the total workforce, it's about average. Hardly something to be outraged about.
If you spread $1 billion evenly among two million workers, that's about $500 per employee per year. That is roughly 25 cents an hour for a full-time worker. Paying 100% health care would be several billion dollars.
The underlying implication here is whether companies should make any profit at all. If the amount of profit allowed is non-zero, what is the correct number? And if there is a correct number, what do you propose to do about it?
Yes. The people that make up that corporation should care about their fellow man (family, friends) and should take pride in making good things (personal fulfillment).
We are allowed to pierce the corporate veil here.
Who say's they don't? How does this compare to what you do for a living?
Meaningless.
The correct question is: how much more or less would they make if they were applying some other philosophy?
At least in the context of this conversation.
And, an increase in profit of $340 million across 13,882 stores (in the US) is less impressive.
And presumably that $8.563 billion is McDonalds corporate and the franchisees didn’t see all of that gain.
This is meaningless because it's entirely hypothetical. If McDonald's is only looking at quantitative data the "bad outcome" hasn't come for them. It seems quite successful in fact (especially in these tough economic times). Maybe if leads to a massive failure we can come back and revisit this but for now, based on facts, it's working just fine for them.
People like to believe that enshitifying everything will eventually lead to failure because sucks for us. It does suck for us. But I'm not convinced that karma is coming for them.
> Making a decision based on only qualitative data
I suppose you meant quantitative and it's just a typo
I'm quite certain every McDonald's franchise knows how to hire high schoolers and serve up a bunch of smashburgers to instantly become the busiest franchise in the state.
The problem isn't an ability to understand long term signals. The problem is that if a franchisee tried to generate that signal corporate would filter them right out of their franchise.
Right, but those short term insights can deliver short term value, often lots of it. That value can then be redirected into an index fund and generate real long term returns. There is no financial incentive for QSR execs to look past the next fiscal year, or even quarter when liquidating customer loyalty is so lucrative.