I’ve been thinking about the corporate world, how it operates, and the effects of corporatism on our lives.  If you’re a network engineer and think this is boring, pay attention.  Corporate culture, the influence of Wall Street, and the rise of a non-skilled management class have direct impact on your work and personal life.  The products you use are heavily influenced by corporate culture.  Why vendors release certain products, when, and how, are all controlled by corporate culture.  When a company tries to sell you something that doesn’t work and doesn’t serve your needs, when the company discontinues support for a product you bought after crashing and burning with it, when companies force products down your throat with buzzword messaging that means nothing to you, corporate culture explains it.

If you work in a corporation, the culture creates politics which affect what projects you work on, your career trajectory, and how you interact with your team.  In your personal life, the food you eat and drugs you take are very much explained by corporate culture.

I wrote in a previous post about the lack of anything permanent in the corporate world.  Everything seems to be temporary, everything is always in flux.  Companies are afflicted by short-term thinking, and short-term thinking is killing everyone.

One way this manifests itself is quarter-by-quarter thinking.  We all know sales people are judged on a quarterly basis, but corporations in general are as well.  Publicly traded companies have to present results to analysts, and thus to investors, every single quarter.  The results are compared against the last quarter, against the same quarter the previous year, and against other companies in the industry.  The results have a huge impact on stock price, executive compensation, and even executives’ jobs.

The effect of this trickles down to all levels of a public company.  Business units are judged by the quarterly performance of their products.  This means product managers are judged by the quarter, much like sales people.  Product managers are not commissioned directly like sales people, but they live and die by quarterly numbers.  As a result, they want to do everything possible to ensure quarterly numbers shine.

Now, imagine you are a product manager.  You have a deal worth, $20 million on the line if you deliver specific features the customer wants.  You are going to do anything possible to win the deal, so your quarterly numbers look good.  Now it probably is the case that the $20 million customer’s feature requests are specific to their environment.  That is, adding the features will help that one customer, but probably very few others.  So, instead of trying to build a product that caters to a broad range of customers who might bring smaller deals, you end up building a product that caters to a narrow set of customers that make you look good in your quarterly business reviews.

Now this type of short-term thinking might be an obvious problem if you planned to spend twenty years at your company.  But instead you spend two years at a company, so you only have to pull this off for eight quarters.  You can put big happy numbers in your LinkedIn profile (“successfully drove record quarter of $100 million in sales!”) and then exit stage right to repeat the process elsewhere.  And the folks left-behind have to clean up the mess.  Keep in mind your success within the company is also being judged by non-technical MBAs who are looking to do the same thing you are.

The companies that do the best long-term are those that eschew short-term thinking.  Apple is a great example of this.  They’ve had some disasters, but have generally taken risks to build products with long-term appeal.  I often mention Zappos founder Tony Hsieh, who while he had serious personal problems, forsook short-term gain for long-term performance.  Even within a company, quarterly thinking can vary by business unit and leader.

At the end of the day, however, it’s Wall Street that encourages this.  Like any metric, execs end up chasing their stock price like a dog chasing its tail.  It doesn’t get you anywhere, however much progress you may think you are making.  Meanwhile, you may get rich, but you leave disaster in your wake.