Week 11 Day 1: Most Teams Do Not Know How the Business Makes Money

This is not a criticism of your team. It is a failure of leadership communication. Most technical teams operate in a value vacuum -- they know what to build but not why it matters financially. When people do not understand how the business generates revenue, they cannot make good prioritization decisions. They treat all work as equally important because they have no framework for distinguishing high-value work from low-value work.

I managed a team for two years before I realized they had no idea how our product generated revenue. They knew we had customers. They knew we charged money. But they could not tell you whether a particular feature drove new subscriptions, reduced churn, or lowered support costs. The result was predictable -- they treated every feature request with equal urgency because they had no way to weigh one against another. When I finally walked them through the business model on a whiteboard, the questions that followed were revelatory. 'Wait, so fixing the onboarding flow would directly reduce our acquisition cost?' 'If churn is our biggest problem, why are we building new features instead of fixing the ones that are broken?' They had been operating blind, and I had assumed they could see.

Research by Groysberg, Kelly, and MacDonald (2011) published in Harvard Business Review found that only 29% of employees could correctly identify their company's strategy from a list of six choices. A study by Kaplan and Norton (2005) -- the creators of the Balanced Scorecard -- found that 95% of employees in a typical company do not understand the organization's strategy. This finding is consistent with what Sinek (2009) calls the 'Golden Circle' problem: most organizations communicate what they do before why they do it. In engineering contexts, Conway's Law suggests that system architecture mirrors organizational communication structures. By extension, when business value communication is absent, technical architecture tends toward internal optimization rather than customer value delivery. The gap is not intellectual -- most engineers can understand a business model in minutes. The gap is communicative -- leaders simply never share it.