Introduction
Predicting value creation in an engineering team—not the product, but the team itself—is a challenge worth tackling. Recently, I discussed this with an investor, and as luck would have it, I had a direct example to draw from.
Product value creation is the easy part because it follows well-established processes. Product Managers pull together a roadmap, highlight effort, cost, time, and return on investment (ROI). They apply rationalisation and value attribution, making it relatively straightforward to measure. Every Tech DD exercise checks product value creation.
But measuring engineering team value creation is more nuanced. To understand it, we need to dive deeper, revealing hidden layers of inefficiencies and challenges that remain unseen from the surface.
Case Study: When Engineering Becomes a Liability
The company had already received its first tranche of Private Equity investment. The founders were newly minted with cash, and the firm had an annual revenue of approximately £15 million, serving a prestigious client base.
However, no Tech DD had been performed before the deal. It’s understandable—on the surface, everything looked great. A-list clients, a healthy P&L, and a strong sales pipeline. But what we uncovered was shocking.
You didn’t need to be a rocket scientist to see the initial problem:
- The engineering team had about 100 people (out of a total company size of 130).
- They were late shipping everything.
- The technology stack was entirely legacy.
- Smaller competitors were entering the space and moving faster.
- A major project, estimated at 3–6 months, was still ongoing after 2.5 years and was less than 30% complete.
- Profit and time leaks were everywhere.
The problems were layered, and solving them required going deeper.
Descending to the First Depth: No Roadmap
Despite an engineering team of 100, there was no formal roadmap. There were plenty of ideas, but the company had been privately owned, and the founders had always called the shots—without governance or justification.
This led to conflicting directions from leadership, constant scope changes, and no clear alignment with company objectives.
Going Deeper: Founder Dynamics
As in many firms at this stage, founder dynamics were fraying. Their ability to spot market shifts had weakened, and their relevance was diminishing. This misalignment and differences created friction, making strategic direction inconsistent and reactive rather than proactive. Coupled with a lack of delivery. Not fun for anyone involved.
Reaching the Ocean Floor: Market Relevance
Even more alarming, the customer base was questioning the need for the solution. The market was evolving, and instead of adapting, the engineering team was prioritising UX changes over fundamental shifts in strategy.
Goding deeper each time, we found deep-rooted issues that needed immediate attention.
What Was Needed?
- A Strategy – A clear, defined, and measurable direction.
- A Roadmap – A structured execution plan, balancing feasibility with business needs.
- Alignment to Value – Every engineering initiative needed to be connected to business impact.
We found that over 15 major initiatives were running simultaneously, none of them finished. (Not the worst I’ve seen which was 198 competing epics which was really down to poor record keeping and project management) This was an easy one for a consultant (or Gordon Ramsay): simplify the menu.
The Hard Truth: Engineering Team Reassessment
The engineering team size and structure were unsustainable. Workload needed to be reduced, some initiatives had to be cut, and in some cases, staff reductions were necessary.
Not a popular choice, but essential for survival.
In the end, the solution was surprisingly simple:
- A one-page roadmap aligned to strategic goals.
- A financial model breaking down cost, value, effort, and time.
- A streamlined execution plan that cut wasted effort and focused on high-impact projects.
It wasn’t an easy project, but it proved exactly where engineering team value was being lost—and how to fix it.
All done in a month.
Common Mistakes in Engineering Team Value Creation
Many companies fall into similar traps when assessing the value of their engineering team. Here are some of the most common mistakes:
- No Roadmap – Without a roadmap, teams become reactive rather than strategic.
- Too Many Parallel Initiatives – Spreading resources thin leads to inefficiencies and long delays.
- Lack of Governance – Decisions made without oversight result in shifting priorities and wasted effort.
- Ignoring Market Signals – Engineering teams focus on internal priorities while missing external threats and opportunities.
- Legacy Tech Paralysis – Sticking to outdated systems out of familiarity instead of modernising.
- Overhiring Without Structure – A bloated engineering team without clear roles or alignment to strategy.
Another case study can be found here.
Engineering Team Value Creation: The Data
Studies and industry data reinforce the importance of measuring engineering team value creation:
- DORA (DevOps Research and Assessment) reports show that high-performing engineering teams deploy 46 times more frequently and recover from failures 2,604 times faster than low performers.
- McKinsey research found that companies with strong engineering management practices deliver software 30% faster while reducing cost overruns.
- A Harvard Business Review study noted that companies with clearly defined engineering priorities saw a 20% increase in productivity and 15% higher retention.
- Forrester estimates that inefficient engineering processes can result in 30–50% waste in development budgets.
By applying structured measurement and strategy, engineering teams can become predictable value creators instead of cost centers.
Conclusion: The Importance of Going Deeper
Engineering team value creation is about more than just headcount or technology choices. It’s about alignment, strategy, and execution.
Like a submarine exploring the ocean depths, uncovering hidden inefficiencies is essential for understanding where value is truly being created—or lost.
By going deeper—layer by layer—you uncover the real issues holding back growth and value creation. When firms take the time to fix these structural problems, the engineering team becomes a powerful force for innovation and competitive advantage.
For investors and executives, this means moving beyond surface-level assessments and into a structured evaluation of engineering’s contribution to long-term business value.
In short, stop focusing solely on product roadmaps—start assessing engineering team roadmaps.
