wall street

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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.

“Progress might have been alright once, but it has gone on too long.”
–  Ogden Nash

The book The Innovator’s Dilemma appears on the desk of a lot of Silicon Valley executives.  Its author, Clayton Christiensen, is famous for having coined the term “disruptive innovation.”  The term has always bothered me, and I keep waiting for the word “disruption” to die a quiet death.  I have the disadvantage of having studied Latin quite a bit.  The word “disrupt” comes from the Latin verb rumperewhich means to “break up”, “tear”, “rend”, “break into pieces.”  The word, as does our English derivative, connotes something quite bad.  If you think “disruption” is good, what would you think if I disrupted a presentation you were giving?  What if I disrupted the electrical system of your heart?

Side note:  I’m fascinated with the tendency of modern English to use “bad” words to connote something good.  In the 1980’s the word “bad” actually came to mean its opposite.  “Wow, that dude is really bad!” meant he was good.  Cool people use the word “sick” in this way.  “That’s a sick chopper” does not mean the motorcycle is broken.

The point, then, of disruption is to break up something that already exists, and this is what lies beneath the b-school usage of it.  If you innovate, in a disruptive way, then you are destroying something that came before you–an industry, a way of working, a technology.  We instantly assume this is a good thing, but what if it’s not?  Beneath any industry, way of working, or technology are people, and disruption is disruption of them, personally.

The word “innovate” also has a Latin root.  It comes from the word novus, which means “new”.  In industry in general, but particularly the tech industry, we positively worship the “new”.  We are constantly told we have to always be innovating.  The second one technology is invented and gets established, we need to replace it.  Frame Relay gave way to MPLS, MPLS is giving way to SD-WAN, and now we’re told SD-WAN has to give way…  The life of a technology professional, trying to understand all of this, is like a man trying to walk on quicksand.  How do you progress when you cannot get a firm footing?

We seem to have forgotten that a journey is worthless unless you set out on it with an end in mind.  One cannot simply worship the “new” because it is new–this is self-referential pointlessness.  There has to be a goal, or an end–a purpose, beyond simply just cooking up new things every couple years.

Most tech people and b-school people have little philosophical education outside of, perhaps (and unfortunately) Atlas Shrugged.  Thus, some of them, realizing the pointlessness of endless innovation cycles, have cooked up ludicrous ideas about the purpose of it all.  Now we have transhumanists telling us we’ll merge our brains with computers and evolve into some sort of new God-species, without apparently realizing how ridiculous they sound.  COVID-19 should disabuse us of any notion that we’re not actually human beings, constrained by human limitations.

On a practical level, the furious pace of innovation, or at least what is passed off as such, has made the careers of technology people challenging.  Lawyers and accountants can master their profession and then worry only about incremental changes.  New laws are passed every year, but fundamentally the practice of their profession remains the same.  For us, however, we seem to face radical disruption every couple of years.  Suddenly, our knowledge is out-of-date.  Technologies and techniques we understood well are yesterday’s news, and we have to re-invent ourselves yet again.

The innovation imperative is driven by several factors:  Wall Street constantly pushes public companies to “grow”, thus disparaging companies that simply figure out how to do something and do it well.  Companies are pressured into expanding to new industries, or into expanding their share of existing industries, and hence need to come up with ways to differentiate themselves.  On an individual level, many technologists are enamored of innovation, and constantly seek to invent things for personal satisfaction or for professional gain.  Wall Street seems to have forgotten the natural law of growth.  Name one thing in nature that can grow forever.  Trees, animals, stars…nothing can keep growing indefinitely.  Why should a company be any different?  Will Amazon simply take over every industry and then take over governing the planet?  Then what?

This may seem a strange article coming from a leader of a team in a tech company that is handling bleeding edge technologies.  And indeed it would seem to be a heresy for someone like me to say these things.  But I’m not calling for an end to inventing new products or technologies.  Having banged out CLI for thousands of hours, I can tell you that automating our networks is a good thing.  Overlays do make sense in that they can abstract complexity out of networks.  TrustSec/Scalable Group Tags are quite helpful, and something like this should have been in IP from the beginning.

What I am saying is that innovation needs a purpose other than just…innovation.  Executives need to stop waxing eloquent about “disrupting” this or that, or our future of fusing our brains with an AI Borg.  Wall Street needs to stop promoting growth at all costs.  And engineers need time to absorb and learn new things, so that they can be true professionals and not spend their time chasing ephemera.

Am I optimistic?  Well, it’s not in my nature, I’m afraid.  As I write this we are in the midst of the Coronavirus crisis.  I don’t know what the world will look like a year from now.  Business as usual, with COVID a forgotten memory?  Perhaps.  Great Depression due to economic shutdown?  Perhaps.  Total societal, governmental, and economic collapse, with rioting in the streets?  I hope not, but perhaps.  Whatever happens, I do hope we remember that word “novel”, as in “novel Coronavirus”, comes from the same Latin root as the word “innovation”.  New isn’t always the best.