I think political commentary is the death knell of a technical blog. I cover a lot of ground here, but the (apparently 5) people who read this blog aren’t visiting for my political opinions.
Thus, I’m taking a big risk in saying the following: Donald Trump has a good idea. It has nothing to do with immigration, or putting troops in cities, or gold-paneling the interior of Air Force One. Rather, he made a comment which went largely unnoticed, is almost certain to go un-implemented, and would do a vast amount to improve the life of network engineers. Yes, network engineers.
“In a Truth Social post, Trump urged the Securities and Exchange Commission to shift away from requiring firms to report on a quarterly basis and instead adopt a semi-annual schedule,” reported the BBC back in September. If only! But what does this have to do with network engineering?
I often write about the internal culture of tech companies, from the problem of layoffs to the influence of non-technical MBAs. Even if you don’t work for a tech company, understanding how your vendors operate from the inside will actually help you to understand why the products you use work–and don’t work–the way that they do. Did you invest in some major new architecture from your preferred vendor only to have them dump it two years later? Understanding how the people in the company think, where they come from, and what pressures control them will help you to avoid such missteps in the future. Every vendor, from a small startup to a tech behemoth like my employer, has a certain set of influences that direct its product decisions.
One problem that afflicts virtually all tech companies is what I call “quarterly thinking”. Public companies, in particular, are required to report the financial results every three months. (In the US, at least, but I assume it’s the same for companies incorporated in most other countries.)
The rhythm of the quarter is familiar to anyone working for these companies. Every few months we have an earnings call with “analysts” (quotes intentional), in which our CEO and CFO report on the company performance. Feeding into this earnings call is a series of quarterly-business reviews, or QBRs. (Everybody and his mother has called these “QBRs” for as long as a remember, but some exec at Cisco decided to do something unhelpful and now we call them QBOs. The “O” stands for “Outlook”. I’ll keep calling them QBRs since that’s the more common term.)
A QBR is a review with executive leadership of business performance. So, for the switching team at Cisco, the QBR will have the SVP of switching, engineering leaders, CX leaders, sales leaders, etc. Various product managers report on the state of their business.
Meanwhile, if you’re having a meeting with big execs, you need to have prep meetings to get ready. So, the end of the quarter brings with it a flurry of meetings, lasting several weeks. It always seems that just when you get done with a QBR, the next one comes around.
Product managers and executives are under the microscope at these meetings. How did their business perform? Were their routers selling? If not, why not? How are we doing relative to the competition? Et Cetera.
The result of this is to focus executives, engineering leaders, product managers, and even line-level employees on the next three months. Let’s say I’m a product manager or a sales person and I want to put up big numbers for the quarter. Is it easier for me to do fifty $1 million deals or one $50 million dollar deal? Usually the bigger one. In that case, I will focus on building a product that satisfies the larger customer. Even worse: Will I focus on building a product that makes sense for my customers for the next five years, or the product that will get me the best numbers in the next quarter? I think you can guess the answer to that.
Quarterly thinking, by its nature, focuses companies on the short term. There are many things I can blame MBA-types for, but it’s not really their fault. It’s the fault of a system that forces them into short-term thinking.
Aside from the strategic failure of quarterly thinking, it also imposes huge administrative burdens on the employees who are constantly readying themselves for status updates every few months.
Money people–and I am emphatically NOT one of these–don’t like Trump’s idea because they want to keep a close eye on company performance. Unfortunately, in my experience these money people are a big part of the problem. They themselves are often mostly interested in short-term gain and not the long-term good of a company and its customers. I remember when a pump-and-dump “activist investor” took control of Juniper Networks when I worked there. Suffice it to say, the changes they made were in their interest and not the interest of network engineers who buy Juniper gear. (Or what was once Juniper. I drove by their campus the other day and saw HPE on all the signs.) Executive decisions are often guided by pleasing these money people. They always will be, at least in a capitalist system. And yet, if we dropped reporting to twice a year, the execs would be less beholden.
I’ve written about this before, not really expecting anything to change. I don’t expect any change now, either. I was glad to see it pop up in the news cycle a couple of months ago even if the idea went nowhere. Trump may have gotten rid of the penny, but we’re still stuck with quarters.