Unstable economies are just one catalyst for an engineering leader to re-examine the current strategic plan. And with the current environment, we hear that many leaders are working with their product peers to re-prioritize technical work to adapt to the macroeconomic environment.
But acquisitions, quarterly sales results, and new funding rounds will require teams to work with management and determine the next steps. Through each of these circumstances, difficult trade-offs must be made. As a result, plans must be re-visited, goals must be adjusted, and often resources must be reallocated.
Let’s discuss some of the questions that an engineering leader should examine during these times when work needs to be ruthlessly prioritised.
1 Which work currently focuses on new markets, new customers, and/or is a high-risk investment? Can this work be reallocated to other priorities?
During tough economic times, it’s difficult to justify putting resources behind efforts that seek to expand to new types of customers. Why? It’s usually much more costly and time-consuming, not just for Engineering but for all parts of the business.
For this reason, some engineering leaders think of engineering work in terms of return on investment:
Does the engineering work create net new revenue from your current customer base?
Does it reduce costs, time or risk, which are even more valuable during uncertain periods?
These are the types of projects that leaders should consider keeping while filtering out others.
2 Are we focusing enough on existing users and our current customer base? How can we better deliver value against our current customer base?
During difficult times, your product team might be inclined to double down on your current customer base. As we all know, obtaining a new customer outside your ICP is much more expensive than keeping or expanding within an existing customer account. Your current customers, and those like them, will keep the ship afloat when the waters get choppy, and losing them is more detrimental than ever.
If the engineering roadmap has initiatives that were intended for a future customer outside your current base, consider postponing those until you’re in a period focused on growth. Instead, look to even better understand your current base. Tightly align with product and others that can provide valuable insight into how your engineering roadmap can better serve current customer needs, experiences, and aspirations.
3 What products and features drive the most return on investment (ROI) and which existing product lines are not driving the top-line growth? (and what is the justification for continuing to support them?).
ROI is essential to quantify during growth and decline, but it’s crucial when you must clarify what to de-prioritize when there are budget limitations. It’s not always easy to attribute engineering work directly to revenue, especially with companies with long sales cycles. In these cases, it’s important to discuss with teams what could replace “revenue” as a value indicator in the ROI equation. All proxies for revenue should be on the table as long as they map back to current business objectives. Some examples could include:
Do you want to increase NPS and delight your current base?
Do you want to enhance certain features to boost their current usage stats?
More importantly, Engineering plays an important role in evaluating the costs involved with focusing on certain priorities. Investors and shareholders are prioritising efficiency when times are difficult, and decisions that reduce the denominator of the ROI equation are equally valuable. Communication and collaboration with your Product leaders will ensure that the overall R&D team is on the same page about strategic priorities, the trade-offs that need to be made to certain goals, etc.
4 What product lines and/or features are expensive to maintain and require significant time or budget investment?
Although this is the toughest question to face directly, as many people and/or teams probably maintain legacy products and systems, it’s vital to face it head-on in difficult times. Consider if resources from these teams can be reallocated to others. Or can you apply their skillsets to teams focusing more directly on “your core” systems or products?
Showing work Allocation towards products/features can help reveal what to consider de-prioritising when times become difficult. Once you know the costs of supporting certain initiatives, you can combine this with the knowledge from the previous question to gain a clearer picture of the new focus areas.
Communicating Engineering Alignment with Data-Driven Insights
None of these questions are easy to answer, as they require direct insight into how engineering work impacts the business. Translating and communicating the impact of engineering is difficult, but data-driven insights can go a long way to ensuring that your team is investing their time and energy into the right priorities when times are tough.
Jellyfish is the leading Engineering Management Platform that enables engineering leaders to align engineering work with strategic business objectives.
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