Over the holidays I ended up having multiple conversations with different people on business and strategy. That either makes me incredibly boring at parties or incredibly engaging…I guess it depends on the type of parties you go to.

Anyways, here’s one anecdote I found myself talking about a lot. I know a high school student who is trying to get their first job. I recalled going to a local movie theater, seeing how they were just so shorthanded, and talked to the manager on duty (again, I’m great fun at parties). The manager basically said to me, “Yes, we are extremely shorthanded, and I am eager to hire more people to come in and help out.”

But what’s interesting is, this being a big chain theater, is that the high school student could not just go talk to the manager and get hired. Hiring goes through “corporate”, which is always this big mysterious entity thousands of miles away in some skyscraper somewhere. And to apply to work at this movie theater requires the high school student to take a literal 50-question online personality test. And ultimately the high school student was not hired.

Now from the perspective of the theater manager, this is frustration. Potential applicants cannot make it though “the system” to get hired, and thus they are not able to bring more people on staff to help with the short-handedness. But let’s look through the lens of “corporate”. If you have hundreds of theaters, and you are looking at all of them as rows on a spreadsheet, then everything is fine. In fact, that shorthanded theater might look great because their labor costs are low.

“But what if people burn out and they quit?”

Indeed. Your tenured, higher-paid staff quit, so you relax the hiring rules a bit to let applicants through, and replace them with lower-paid new staff. Your labor costs just improved again.

“But then the quality of the moviegoing experience declines!”

Certainly. And do you see a corresponding drop in movie theater attendees, and a requisite drop in revenue? You either don’t, because people still want to see movies. Or if you do, then you raise ticket prices and blame streaming and piracy and higher quality home televisions and sound systems.

My point is, we are reaching the culmination of the “being led by MBAs” scenario that we’ve so frequently read about and have written about in the past. The scary part is, at the business leadership level, is it doesn’t matter. We are hyper-focused on optimization of our KPIs and P&L, and maximizing our stock prices and bonuses, and our customers and consumers are now experiencing the results (to say nothing of this impact on the labor market, cost of living, quality of life, and all those other social and societal factors.)