In November 2023, all eyes were on OpenAI’s internal management conflict resulting in the abrupt exit of CEO Sam Altman, followed by his return a week later, and ultimately the exit of Ilya Sutskever, co-founder and Chief Scientist. While I was not personally involved in this story and do not intend to speculate on the specifics of the situation, it does bring to mind a few incidents of corporate drama I’ve observed first-hand over the years. Scenarios similar to this reflect a common pattern in startups transitioning into growth mode. The personal purpose and values alignment of key individuals (which is nearly everyone in a startup) with that of the organization is challenged. Many engineers join startups drawn by the allure of less bureaucracy, focused engineering work, and the promise of a significant windfall. That’s why I joined the startups I did earlier in my career and that motivation doesn't seem to have changed in present times. As the company’s technology matures and customer interest grows, the organization’s focus shifts towards business operations and profitability. This shift can create a divide between technical and business leaders.

The Startup Journey

In the initial phases, startups often entice engineers with the prospect of minimal bureaucracy, a concentrated focus on innovative technical work, and the potential for significant financial rewards. During these early stages, the primary emphasis is on innovation and product development. The culture of the organization is typically strongest during this phase, as team sizes are small and cohesive, often aligning with Dunbar’s Number, which suggests that people can maintain stable social relationships with about 150 others. This intimate setting fosters strong communication and a unified vision.

However, as the startup grows and starts attracting customers, its focus gradually shifts towards business operations and profitability. The increasing size and complexity of the organization can strain these close-knit relationships, often leading to a disconnect between technical and business members of the leadership team. This transition frequently results in conflicts as priorities and goals begin to diverge.

Historical Context and Trends

Organizational life cycles typically follow stages such as Existence, Survival, Success, Renewal, and Decline (Lester, Parnell and Carraher, 2003). These types of issues most commonly occur during the Survival stage and the transition to the Maturity stage. During this period, companies often face internal conflicts as they shift from informal to formal structures. This transition requires different leadership approaches and capabilities.

Examining companies like Google, Facebook, and Uber reveals that conflicts often arise during the transition from growth to maturity. These companies managed to navigate their internal conflicts through strategic leadership and structural changes.

The Predictable Rift

As startups grow, a predictable rift often forms between engineering and business priorities. Engineers tend to focus deeply on technical excellence and innovation, valuing the intricacies and perfection of their craft. On the other hand, business leaders prioritize operational efficiency and profitability, focusing on strategies that drive revenue and market growth. This divergence in focus and priorities naturally leads to misunderstandings and conflicts as each group struggles to see the other's perspective and align their goals.

The Root Cause

The root cause of the disconnect lies in the distinct lenses through which engineers and business leaders view the world. Engineers' focus on technical skills is a product of their siloed education, which often overlooks broader business topics. This isn't a flaw in the engineers themselves but a reflection of their training. Meanwhile, business leaders, impressed by the technical prowess of their engineering teams, might mistakenly assume a similar depth of business knowledge. This misunderstanding can create a blind spot, where business leaders are surprised to find engineers' understanding of business concepts to be relatively shallow. This divergence in focus and expectations exacerbates internal conflicts and highlights the need for professional development that bridges these gaps.

Detailed Breakdown of the Technology Delivery Leadership Framework

The Technology Delivery Leadership framework is designed to bridge this gap. It integrates four cornerstones:

1. Craft: Mastery of technical skills involves maintaining high coding standards, engaging in continuous learning, and excelling in problem-solving and innovation. Practical examples include participating in peer reviews, attending technical workshops, and staying updated with the latest industry trends.

2. Business Acumen: Understanding the business side, including financial literacy and strategic thinking. Engineers need to grasp how their work impacts the company’s bottom line and overall strategy.

3. Delivery Excellence: Reliable and efficient delivery of products and services, highlighting project management and operational skills. Ensuring projects are completed on time, within budget, and to the required quality standards.

4. People Leadership: Strong leadership skills, including team management, communication, and conflict resolution. Leaders should inspire and motivate their teams, manage conflicts effectively, and promote a collaborative culture.

By adopting this framework, organizations ensure that every decision supports their strategy and aligns engineering and business leaders. Professional development is a critical component, providing engineers with the knowledge and skills to understand and contribute to business operations.

Implementing the Framework

To implement the Technology Delivery Leadership framework, organizations should:

1. Develop Professional Development Programs: Create training programs that educate engineers on business principles and operations. This could include workshops, seminars, and courses focused on financial literacy, strategic planning, and project management.

2. Foster Holistic Decision-Making: Encourage decisions that consider Craft, Business Acumen, Delivery Excellence, and People Leadership. Leaders should evaluate the impact of their decisions on all these areas to ensure alignment with organizational goals.

3. Provide Continuous Learning Opportunities: Offer ongoing education to keep engineers updated on business trends and practices. This could involve access to industry conferences, online courses, and internal knowledge-sharing sessions.

4. Step-by-Step Guide: Provide a step-by-step guide for implementing the framework, including challenges and tips for overcoming them. Highlight key milestones and metrics for measuring success. For example, establish clear objectives for each training program and regularly assess the progress through performance reviews and feedback.

Conclusion

The internal conflict within OpenAI is a reminder of the common disconnect between engineering and business in growing startups. This misalignment, often due to a lack of professional development, can threaten a company’s survival. The Technology Delivery Leadership framework offers a solution, integrating Craft, Business Acumen, Delivery Excellence, and People Leadership to align goals and foster growth. By adopting this framework and investing in professional development, organizations can ensure their long-term success and stability.

Ready to bridge the gap between engineering and business in your organization? Contact me today to discuss how we can implement the Technology Delivery Leadership framework tailored to your needs.