Invest in your product
One of the reasons Xie has been so successful is that he is constantly looking to improve upon his product, and he won’t take shortcuts to do so. In fact, of the nearly 1,100 employees at Fortinet, about half are research and development engineers.
“That’s probably the highest percentage in our space,” Xie says. “We believe that investing in the technology innovation is key for the long-term growth and the next generation for how we can do better. That’s why the reputation we have in the field is that our technology is the best.”
You may think that having half your staff dedicated to R&D isn’t smart in this kind of a market, but remember that even though the economy is rough, things continue to change and eventually the outlook will be more positive, and you need to be ready to move when that happens.
“The area we play in, the level of security is changing really quickly because of a lot of new technology and a lot of obligation can come up, so you have to follow the change,” Xie says.
For example, one chip that Fortinet makes takes a one- to two-year commitment to make and is much more costly than some software solutions that may be quicker. But, by committing to this chip, it better positions the company for the long term instead of trying to capture temporary market share right now.
“You can really differentiate from your competitor and have a bigger advantage,” he says.
The key is that you have to know what you want your company to be and what kind of products you want to have. For example, Xie wants Fortinet to be a leader in its space, so when he goes to make decisions about what products or technologies to invest in, he balances how a decision will help him achieve that goal.
“If you have this kind of goal, you can come back to it and say, ‘How can I do better?’” he says. “Maybe it’s not laying off people. How can I make my earnings this quarter? How does the whole market grow long term, and how can we position ourselves better and grow faster and have market share and provide a better solution?”
By asking these questions instead of jumping to the quick solutions, it helps keep Fortinet from falling into deeper problems through quick fixes.
“Sometimes I see management that maybe tries [to do short-term fixes] to impress their manager or board,” Xie says. “They can save some costs or grow quick, and then they get in trouble after a quarter or two because they made short-term decisions, but if you can set a model and say, ‘Let everyone understand that we’re going to take a long-term look,’ that’s a better way instead of trying to do some quick, short-term [decision] with results but maybe suffer more long term.”