> I just fail to see how one can build anything if priorities change on a daily basis.
I experienced something like this in a startup where I was one of five engineers. We were lucky to have individual offices at the end of a hallway. The CEO would walk down the hall a couple of times a week, stopping in each office, and change priorities on us. He had no idea how disruptive it was and always laughed when we told him.
Eventually the CEO saw that we were making very little progress, but attributed it to lack of engineering management rather than priority churn. He was absolutely right, because part of management is managing up. Luckily he hired someone who was great at that.
The new manager spent time talking to each of us about our frustrations and then watched everything for a few weeks. He then realized that the priorities were going in circles - every few weeks the CEO would get back to the priorities from a few weeks earlier. So, whenever the CEO changed the priorities, the manager would say "we're on it" and not tell any of us. It took us a while to figure it out, but he'd also stall our releases until the "new" priorities lined up with what we were ready to release. Both productivity and morale sky-rocketed. And the CEO was happier than ever. I worked with the same manager in two other companies in subsequent years - I never felt as productive under anyone else.