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Engineering activities are economic activities. Engineering activities must make sense as economic activities. Engineering activities productivity can be meas

Engineering activities are economic activities. Engineering activities must make sense as economic activities. Engineering activities productivity can be measured the same way the productivity can be measured for any economic activities. See "Internal Market Economics: Practical Resource-Governance Processes Based on Principles We All Believe In", Book by N. Dean Meyer. The posted article came so close to the idea of the right measurements, I was intrigued and was like "yes, say it!", but the author didn't say what I expected, instead they pointed at quantifying calendars and commit logs. What a bizzare self-contradiction.

dmos62 6y ago
So what is that true way to measure productivity you alude to? By the way, engineering can be an economic activity, but it doesn't have to be. Could be an art as well, for example.
- andrey_utkin 6y ago
  Simply: does revenue exceed cost of running it? The book I referred to answers the "but engineering team doesn't have revenue". Engineering can be art, sure, and if you like, we can even discount the idea that art creation can be seen as economic activity. But is there a need to measure productivity then?
  - username90 6y ago
    > Simply: does revenue exceed cost of running it? Cost of running it includes engineering salaries, so isn't a good measure to include when you measure productivity of engineers. A productive engineer would be worth a higher salary, but if you include the cost of that higher salary reducing his value would that also reduce the salary you want to pay? Doesn't make sense.
    - dmos62 6y ago
      Also, what if engineering is good, but sales is bad? Engineers might exceed their productivity goals, but it wouldn't amount to profit.
      - andrey_utkin 6y ago
        Then from the internal market economics PoV, here's how it looks: Engineering: costs (salaries + infra) are covered by revenue (services rendered to exec team). Executive team: costs (execs salaries, expenses to pay engineers and sales for their services, accumulating interest to be returned to investors if any) are NOT covered by revenue (which comes from customers). I find this decomposition incredibly neat and enabling solving the right problems.
    - andrey_utkin 6y ago
      > but if you include the cost of that higher salary reducing his value would that also reduce the salary you want to pay? Doesn't make sense. It indeed doesn't. Where did you get that idea? It's not as complicated as you probably think. If the engineer has rendered services which are worth his salary + his actual expenses to achieve that, he has earned exactly his salary, high or low.
  - marcus_holmes 6y ago
    Engineer A built the new widget that Sales have been talking about for months. This immediately generates $1m in revenue. Engineer B removed some tech debt. Future efforts to build widgets will take less time to build. Engineer C rewrote the backend to prevent a vulnerability exposure that could have lead to disaster. Who was most productive? Who deserves a raise?
    - andrey_utkin 6y ago
      Each of these tasks, or ongoing commitments, has a clear price when you run an organization the Internal Economics way. Whoever consistently "earns" more than their salary this way, deserves a raise.
      - blackbear_ 6y ago
        The key question is how do you quantify earnings/savings? In the example: Future efforts to build widgets will take less time to build -> How to quantify ? Vulnerability exposure that could have lead to disaster -> How to quantify ? What you are saying is nice and clean on paper but simply impossible in practice.
        andrey_utkin 6y ago
        It's an investment problem for those who hold the money in the organization. Say, we have an organisation consisting of exec team and engineering team. Engineering team has a bright idea that a certain undertaking will reduce time to make one widget. They bring this case to exec team. "It will reduce the cost of a widget from X1 to X2, the project will take T time and cost C." If exec team sees this investment interesting and possible, they make that investment. The worth of the project is simply its cost C. Exec team willingly paid, and if they got what they wanted for it, they should be happy with "productivity". (Similarly to how you don't bemoan "productivity" of the baker you buy your bread from.)
        blackbear_ 6y ago
        Yes. Again, properly estimating X1, X2, T and C is so difficult in most cases that this strategy is not really applicable (notable example: technical debt).
visarga 6y ago
> Engineering activities productivity can be measured the same way the productivity can be measured for any economic activities. The economy is basically a population based evolutionary process. Its nature is open ended - things that seem important now might have been seen as being useless or stupid a decade or two ago, like neural nets in 1985 and personal computing in 1950's. So we can't tell ahead of time which will become important, but the exploration process and extreme diversity are the main gain. It's all about getting to those stepping stones that we don't even know we will need. Inspired engineering is eventually rewarded with economic success, just like biological evolution.
- andrey_utkin 6y ago
  So what's your point? Mind you, we're discussing an article on engineering productivity in business. Nothing is happening without funding. Business can't run producing things which are not valuable in the moment, it will go bankrupt. Government can sponsor such things as it sees fit, best if guided by a clear hypothesis that funding it makes the outcomes probabilistically better than not funding it. When nobody is paying you but you're tinkering with some stuff, then it's you who is sponsoring it with your time and other resources.
  - visarga 6y ago
    That's exactly my point - following the gradient of money you won't get to the global optimum because it's just a short sighted signal. You need to invest into crazy ideas to get anywhere. Unknown unknowns don't get discovered in a systematic way and are not profitable step by step. If your name is Christopher Columbus and it's 1492, your project gets rejected for being implausible, what do you do?
    - nytgop77 6y ago
      Pitch it to different investors. His own country Italy did not fund him, so he pitched it to Spain.

dmos62 6y ago

So what is that true way to measure productivity you alude to? By the way, engineering can be an economic activity, but it doesn't have to be. Could be an art as well, for example.

andrey_utkin 6y ago
Simply: does revenue exceed cost of running it? The book I referred to answers the "but engineering team doesn't have revenue". Engineering can be art, sure, and if you like, we can even discount the idea that art creation can be seen as economic activity. But is there a need to measure productivity then?
- username90 6y ago
  > Simply: does revenue exceed cost of running it? Cost of running it includes engineering salaries, so isn't a good measure to include when you measure productivity of engineers. A productive engineer would be worth a higher salary, but if you include the cost of that higher salary reducing his value would that also reduce the salary you want to pay? Doesn't make sense.
  - dmos62 6y ago
    Also, what if engineering is good, but sales is bad? Engineers might exceed their productivity goals, but it wouldn't amount to profit.
    - andrey_utkin 6y ago
      Then from the internal market economics PoV, here's how it looks: Engineering: costs (salaries + infra) are covered by revenue (services rendered to exec team). Executive team: costs (execs salaries, expenses to pay engineers and sales for their services, accumulating interest to be returned to investors if any) are NOT covered by revenue (which comes from customers). I find this decomposition incredibly neat and enabling solving the right problems.
  - andrey_utkin 6y ago
    > but if you include the cost of that higher salary reducing his value would that also reduce the salary you want to pay? Doesn't make sense. It indeed doesn't. Where did you get that idea? It's not as complicated as you probably think. If the engineer has rendered services which are worth his salary + his actual expenses to achieve that, he has earned exactly his salary, high or low.
- marcus_holmes 6y ago
  Engineer A built the new widget that Sales have been talking about for months. This immediately generates $1m in revenue. Engineer B removed some tech debt. Future efforts to build widgets will take less time to build. Engineer C rewrote the backend to prevent a vulnerability exposure that could have lead to disaster. Who was most productive? Who deserves a raise?
  - andrey_utkin 6y ago
    Each of these tasks, or ongoing commitments, has a clear price when you run an organization the Internal Economics way. Whoever consistently "earns" more than their salary this way, deserves a raise.
    - blackbear_ 6y ago
      The key question is how do you quantify earnings/savings? In the example: Future efforts to build widgets will take less time to build -> How to quantify ? Vulnerability exposure that could have lead to disaster -> How to quantify ? What you are saying is nice and clean on paper but simply impossible in practice.
      - andrey_utkin 6y ago
        It's an investment problem for those who hold the money in the organization. Say, we have an organisation consisting of exec team and engineering team. Engineering team has a bright idea that a certain undertaking will reduce time to make one widget. They bring this case to exec team. "It will reduce the cost of a widget from X1 to X2, the project will take T time and cost C." If exec team sees this investment interesting and possible, they make that investment. The worth of the project is simply its cost C. Exec team willingly paid, and if they got what they wanted for it, they should be happy with "productivity". (Similarly to how you don't bemoan "productivity" of the baker you buy your bread from.)
        blackbear_ 6y ago
        Yes. Again, properly estimating X1, X2, T and C is so difficult in most cases that this strategy is not really applicable (notable example: technical debt).

visarga 6y ago

> Engineering activities productivity can be measured the same way the productivity can be measured for any economic activities. The economy is basically a population based evolutionary process. Its nature is open ended - things that seem important now might have been seen as being useless or stupid a decade or two ago, like neural nets in 1985 and personal computing in 1950's. So we can't tell ahead of time which will become important, but the exploration process and extreme diversity are the main gain. It's all about getting to those stepping stones that we don't even know we will need. Inspired engineering is eventually rewarded with economic success, just like biological evolution.

andrey_utkin 6y ago
So what's your point? Mind you, we're discussing an article on engineering productivity in business. Nothing is happening without funding. Business can't run producing things which are not valuable in the moment, it will go bankrupt. Government can sponsor such things as it sees fit, best if guided by a clear hypothesis that funding it makes the outcomes probabilistically better than not funding it. When nobody is paying you but you're tinkering with some stuff, then it's you who is sponsoring it with your time and other resources.
- visarga 6y ago
  That's exactly my point - following the gradient of money you won't get to the global optimum because it's just a short sighted signal. You need to invest into crazy ideas to get anywhere. Unknown unknowns don't get discovered in a systematic way and are not profitable step by step. If your name is Christopher Columbus and it's 1492, your project gets rejected for being implausible, what do you do?
  - nytgop77 6y ago
    Pitch it to different investors. His own country Italy did not fund him, so he pitched it to Spain.