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August 10, 2023 1 Min Read

Confluent Leadership Principle #5: Optimize For ROI

Financial Services

The previous sections talk about prioritizing and improving the most valuable efforts, but what does that mean?

 

Great leaders conceive of value in terms of “return on investment”. That is, they conceive of their role as helping their team produce the most valuable possible output for Confluent while requiring the least input.

 

There is a hierarchy of maturity in leaders based on how well they understand this:

  1. The worst leaders have this backward, they think their value corresponds to the inputs and work on growing these—i.e. the budget, headcount, or other costs that they incur. “I must be important, I have such a big team”. Of course, this is the opposite of value!

  2. Better leaders think of their value only in terms of output—what their team produced. They work to optimize output but pay little attention to what inputs are required. This is a bit better but is still only half the equation.

  3. The best leaders think in terms of both the “top” and “bottom line”. That is, both what they produce and what inputs they require to produce it. They are working to produce more value, but also continually working to make their team more efficient and productive at doing it.

 

Leaders who do this well are thinking about the productivity of their employees, cost structure, and whether money, time, and other resources are “well spent”. Naturally, these leaders that are focusing on efficiency like this are the very ones we are most excited to give more resources to invest because we know it will be a good investment.

This principle isn’t limited to things that are easily quantifiable. Even in areas where there is a great deal of uncertainty (say, product investments) or where the output is difficult to quantify precisely (for example, brand impact), it is still often possible to reason comparatively about the relative output and inputs required for different initiatives.

 

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Reprinted with permission from Confluent, 2023

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