Pursuing old-fashioned values is a more productive way to make a company successful than slavishly following shareholders' demands

Throughout the stage play Enron, the blinking red numbers of a stock market ticker run unremittingly across the set, showing the rise and rise of the energy firm's share price — the driving force for its relentless progress from old-fashioned oil production into energy trading, off-balance sheet finance, and ultimately all-out fraud. Jeff Skilling and his colleagues were so fixated with boosting their stock price that they lost sight of what the Texan oil firm was meant to do, or be. And ironically, it was their single-minded pursuit of "shareholder value" that led to Enron's catastrophic collapse.

The approach of Skilling et al was the opposite of what the economist and writer John Kay calls "obliquity". In an elegant new book (which is more than can be said for the term obliquity itself), he uses a web of examples to show how approaching problems indirectly can be far more successful than tackling challenges head on.

Kay applies his insight to art, politics, sport and family life, but his finest examples come from the world of business — and the central moral he draws is that, counter-intuitive though it may seem, a single-minded pursuit of share price growth is the wrong way to win.

When ICI – Imperial Chemical Industries as it was known in its more illustrious days – saw its job as practising the "responsible application of chemistry," it became phenomenally successful. Later, under pressure from fractious investors, it declared its mission: "to be the industry leader in creating value for customers and shareholders through market leadership, technological edge and a world competitive cost base". It then proceeded to go on a disastrous buying spree, which culminated in ICI falling into the hands of the Dutch firm Akzo Nobel three years ago.

When Citicorp merged with Travelers in 1999 to create the sprawling bank conglomerate Citigroup, John Reed, Citicorp's CEO, declared: "The model I have is of a global consumer company that really helps the middle class with something they haven't been served well by historically. That's my vision. That's my dream." His joint-CEO, Travelers' Sandy Weill, rapidly interjected "my goal is increasing shareholder value". Reed and his old-fashioned, oblique way of running a business was sidelined. Just a few years later, Citi was in trouble and Weill was forced out; within a decade, Citigroup was forced into the arms of the US government.

Boeing went downhill when it stopped being excited about planes, and focused on returns; Marks & Spencer generated extraordinary staff loyalty by providing cheap hot meals for employees, not because of a cost-benefit analysis, but because Simon Marks knew the kind of company he wanted to run.

Even General Electric's legendary Jack Welch, still seen as the most consistent generator of stock market returns ever, said last year: "Shareholder value is the dumbest idea in the world." He might have delivered an extraordinary market performance – but not by trying to.

Welch's scepticism is shared by Mervyn King. Appearing before Which's commission on the future of banking last month, King found time to take a sideswipe at the relentless demands of shareholders. "Many of the best companies I have seen up and down the country are private companies, not subject to the so-called discipline of the stock market," he said.

Obliquity tells us that by pandering to rapacious shareholders, firms are not just trying to come up with the goods too quickly – they're actually pursuing the wrong goal. It's not just about numbers and targets and synergies – it's about great products, happy customers and loyal staff. As Kay says, no one will be buried with the epitaph "he maximised shareholder value".