Belt-Tightening or Suffocation?

We get it. Tech’s going through a rough patch. Even though it seems like most major economies will avoid a recession and that inflation is trending positively, funding and expectations from tech companies and startups have changed. Hundreds of thousands have lost their jobs, and companies are talking about their newly found focus on performance and optimization.

In this climate, leaders are coming to terms with the fact that some things seem to have changed for good (or, at least, for a long while). You can no longer rely on the crutch of “hyper-growth” to hide slowing teams. You’ve got to make do with the team you’ve got. This belt-tightening seems to be done automatically and harshly in a way that will harm companies long term. Have you taken it too far as well?

Cutting and Slashing

Are you slamming the brakes too hard? Everywhere we look, we see companies halting spending. This “ spending “ sometimes has a solid ROI, so stopping makes no sense. I get hiring freezes or changing your headcount ramp up to something saner. Still, some teams are not hiring replacements even for “involuntary attrition” (corporate speak for “people who left even though we would’ve preferred them to stay”).

Then, many expenses are stopped without much thought. I see teams spending months to bring down cloud costs—where sometimes the savings don’t justify the time spent getting there and the opportunity cost of it. Any investment in the team itself is cut, so conferences, courses, and coaches are all gone. Similarly, companies that were already innovation-starved and held a “hackathon” once a year are stopping all such initiatives (read more about why hackathons are a hack in this free chapter from my book).

Quick note: I’ll be talking about all this and more on my free live stream later this month. Sign up here.

Grinding to a Halt

I can get behind optimization and performance efforts—I’ve been successfully pushing companies to act this way for years in my work. However, there’s optimization, and then there’s starvation. When we cut for the sake of cutting, we can go too far. What I’m seeing now reminds me of the beginning of COVID when companies hit the brakes so hard that it sometimes took them so long to regain momentum that they never ended up catching up.

It is more important now than ever before to genuinely invest in your team and coach them to become better. For the time being, these people are all you’ve got. If you cannot improve your pace by hiring more, you have to improve by helping them grow. When you stop all investments in training and kill every opportunity to be creative, you are blocking any chance of real growth.

This is just once removed from saying you’ll improve by banging on the keyboard harder. However, given that it is not your bottleneck, you have to help the team work smarter.

Maintaining Momentum

You should focus on improving productivity and efficiency. Here are some examples of what I’ve been doing with clients recently to tackle both.

For productivity, meaning doing things better or faster, you can consider the following:

  • Simplify processes and cut rituals that have low value.
  • Flatten inflated organizations with many micro-teams. A two-person team with a manager has useless overhead when the organization is not going to be growing soon to even that out.
  • Help your managers create experience acceleration plans. This is intense professional coaching that should be happening regularly, but especially now.
  • Drop low-value initiatives such as “guilds” that never seem actually to do anything. Admittedly, guilds can have value, but if you’ve failed to make them productive, maybe now not’s the time.

Efficiency is the real momentum maker, though. It means making sure that you’re doing the right things. Doing this well is what sets you apart as a leader and as a leading organization. Some options:

  • Ensure that you’re regularly getting an outsider’s perspective. Work with advisors like myself, or get a support system (including my free community, check it out).
  • Improve impact-per-engineer following the Tech Executive Operating System.
  • Stop allocating time to tech debt efforts mindlessly and make time for high-value tech capital efforts.
  • Shift more toward empowered teams, provided that you have a solid product management team.
  • Measure learning-on-investment: what last improvements result from how the team operates? For example, are you ensuring you never introduce the same type of bug twice or retrospect completed work to find missed opportunities to cut scope?

Each of these bullets has the potential to drastically improve your team. They all work no matter how big or small your company is. I’ve seen firsthand how doing this with my clients resulted in tripling impact or more. What are you waiting for?