Engineering leaders constantly make bets – from technology choices to product initiatives and staff promotions.
But not all bets pay off.
So how can they balance strategic decision-making with effective risk management? And how can they build trust among teams and stakeholders while making these high-stakes bets?
In this post, I’ll go over a recent conversation I had with Jason Warner, my co-host on Developing Leadership and former GitHub CTO (you can listen to the whole thing here).
We spoke about the dual responsibilities that leaders have in building their organizations while delivering value and the difficult decisions this often requires.
Engineering leaders can manage risk in a number of ways, including:
- Changing the organizational structure to be more flexible and adaptable.
- Adopting a mindset of long-term company building over short-term product building.
- Building a culture of trust.
- Starting the right conversations and asking lots of questions.
Let’s get into it.
Position Sizing: Decision Making 101
For each new project, engineering leaders must consider the risks involved and the resources available before they can allocate individuals to project teams and determine the amount of work they should take on. This is known as position sizing.
📐 Position Sizing: The process of determining the appropriate amount of work for a team or individual to take on in a project or a sprint.
As a strategy, position sizing can help you make more informed decisions about the risks you’re willing to take while making the best use of all of your available resources.
The Bets You Place As An Engineering Leader
When discussing the strategic decisions they have to make, engineering leaders often use words like “probabilities”, “risk”, and “reward”.
Every decision you make is like a high-stakes bet.
For example, every time you promote a team member, you’re making a bet on how well they’ll perform in a new role.
You’ll weigh up their strengths and the key things they’ll bring to the position. But you’ll also consider how things might go wrong: Maybe they’re not ready for their new responsibilities? Or maybe they’re already critical in their current role, so moving them to a new role will make other parts of your organization suffer?
You’ll calculate similar benefits and risks when thinking about product, initiatives, and technology.
Engineering leaders make hundreds of these decisions every day. That amounts to thousands upon thousands of bets.
It comes with the territory, and it isn’t easy. So how can you effectively manage the risk and uncertainty?
Are You Captain of a Cruise Ship, Or Admiral of a Flotilla?
As an engineering leader, you’re not managing a cruise ship. You’re managing an entire flotilla.
🛳 A cruise ship is a single entity that moves in a single direction at a single speed. Treating your company like this might be a safe bet. But it’s limiting. It’s a rigid, inflexible structure in which your organization may struggle to adapt to changing circumstances.
🚢 A flotilla, on the other hand, is a formidable armada of multiple boats. They’re all working toward a shared goal, usually with a single admiral giving all of the orders.
Approach your organization like the admiral of this flotilla.
Think of every team in your organization as a separate ship in your armada. Each one can move in its own direction and at its own pace. But they’re each working towards a single goal – your organization’s overall success. As a structure, this will give you much greater flexibility and adaptability.
Change Your Mindset: Product Building vs. Company Building
Treat your organization like a cruise ship, and one poor decision could sink you. But treat your organization like a flotilla, and you can make multiple decisions about multiple things at once.
If one ship sinks, so be it. If you’re aware of the risks, you can deal with the consequences. But the rest of your flotilla will stay afloat and continue to sail towards your organization’s overall goals.
👉 It’s the difference between product building and company building. You place your bets not so you can build a single product in a quarter. You’re doing this so you can build your company over the course of multiple years.
Write Your Operating Manual
As an engineering leader, have you ever written your operating manual?
Think of it as a physical document, a bit like your CV.
But instead of detailing your experience and your key skills, it details how you operate. It might outline the things that matter to you, listing the things that excite you, and the things that you perhaps don’t respond too well to. It might also list your preferred methods of communication.
📘 A personal operating manual puts into writing just what people can expect from you, with some clear pointers on how you can best work together.
Write your operating manual and share it across your organization. Encourage others to write their operating manuals too.
It’s a good way to start building the mutual trust that’s so critical for long-term company building.
A Culture Built On Trust
If you’re managing your organization like a flotilla, you’ll have to trust every team in your organization to work towards their own goals without losing sight of the overall organizational goals.
At the same time, they’ll have to trust you to make your bets.
Whether you realize it or not, many of the decisions you make as an engineering leader will be built just as much on trust as on logic and on measured calculations of risk and reward.
You might trust one person to manage a project – the implication being that you perhaps don’t trust another person so much.
This can lead to some bruised egos, particularly when individuals in your organization feel they have ownership of certain products or processes.
But if your company culture’s built on trust, individuals in your organization should trust that your decisions will have the organization’s goals at heart.
Talk to people across your organization.
Be open and honest about the goals you want to set for your organization and your strategies for achieving these goals.
Anyone who can share your enthusiasm for these ideas will likely be a trusted vessel in your flotilla. But anyone who gives too much pushback, particularly about other teams or individuals, may prove too disruptive to contribute towards your organizational goals.
No engineering leader likes letting people go. But as a leader, you have a responsibility to root out any sources of disruption in your organization. Because nothing contributes to a toxic company culture quite like distrust and resentment.
Ask More Questions
Engineering leaders don’t ask enough questions.
When you talk to your teams about team-level and organizational goals, you might get told that certain things are impossible, and at this point, it’s not your job to convince the team that your goal is, in fact, possible.
Instead, ask questions and demystify things together:
“Well, if this thing were possible, then how would we go about doing it?”
Encourage your engineers to challenge their assumptions and discuss what’s possible. This, more often than not, will start to form a plan.
And if you continue to ask questions throughout this planning stage, you and your teams can arrive at strategies and goals that you can all get behind – because you’re all aligned on how you will get there.
💡Remember: As an engineering leader, you don’t need to have all the answers. But you do need to provide the framework for teams to figure things out together. And a lot of the time, this starts with asking the right questions.
Developing Leadership is a podcast powered by Athenian and hosted by Eiso Kant and Jason Warner.
Follow us on Substack for deep dives into episode topics and weekly advice from your favorite engineering leaders!