Communicating business impact
Earlier this week, I sat with Olivia Christian at LeadDev to talk about engineering management, and it had me realize how uncommon it is to see blog posts or talks on communicating business impact, especially at the middle management layer, even though it’s the reason why our organizational teams exist in the first place.
In software engineering management, engineer managers straddle the hierarchy between executive leadership and reporting engineering staff. We constantly manage the information and direction given above to sustain the work for our team members. In that work, we plot a path from the current to the desired state. We understand the business goals, visualize the impact, connect the dots, measure and collect metrics, tailor our communication, tell a few stories, share progress, and iterate. The activities fall into technical, team, and business contributions. I’d like to focus on the business contributions in this blog post.
Understanding the nature of business contributions.
There are three ways to make a business contribution for the purposes of engineering management: generate revenue, save revenue, or unlock revenue.
Generating revenue is primarily product or feature-driven. It’s how the company makes money. Saving revenue is about operational overhead, "the cost of building the thing.” It’s how the company scales and sustains being a company that generates revenue. Unlocking revenue is more experimental, involving science and analysis to gain competitive or market advantage. This is how companies stay in business.
CEOs will work closely with their business’s CFO or finance team to determine what level of investment is necessary at all three levels. The business’s operating model may accelerate revenue generation at the early stages of a company’s lifespan to secure funding. Other businesses may prioritize cost savings initiatives such as optimizing cloud cost spend during economic hardships (most places don’t wait for economic hardships to come around before they become mindful of cloud spend since CFOs watch the company spend anyway). The strategies will change, and when they do, the projects and work available for teams will also change.
Reading the course and trajectory of the business allows engineering managers to navigate conversations with upper management effectively. If you’re running a product team, showcase the potential revenue generation against the cost of building a feature or doing the work to push through. If you are an infrastructure team, showcase an initiative to save on costs. I know these examples are about the actual teamwork, but you can also do this for securing headcount/staff or getting an investment for additional training.
Communicating business impact as an engineering manager.
If you’re looking to really push on your team’s business impact, I listed a few examples of teams that typically have initiatives that they will be able to own and drive in their respective business-impacting areas of focus. This doesn’t mean that a data infrastructure team can’t have any revenue-generating or revenue-unlocking business contributions. It just means your team may be more dependent on other teams in order to succeed in making said contribution. This is exactly when you craft the story around cross-team collaboration.
I typically look at a company and leader team’s values. If there is one about collaboration or working together, this is the key element to the story I’ll share in my status update/readout. Ultimately, we’re building the vision held by a company, and so mapping and directly aligning with said vision and values give us the language to navigate and communicate effectively.
In Summary
Business impact can be this nebulas term that means having to quantify or measure the outcome of an accomplishment to have your resume stand out or to have something important to share with stakeholders in an executive read-off. But I believe there’s a science to sharing and crafting a story around why you exist as an employee, team, or business, and that involves paying attention to how activities save costs, generate revenue, and unlock revenue. I hope this blog post expands the concept of “business impact” in a way that feels practical and useful.
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