The 4 States of an Engineering Team

I’ve been making my way through the outstanding collection of books published by Stripe Press. After reading High Growth Handbook, I discovered what I consider the definitive work on engineering management: An Elegant Puzzle: Systems of Engineering Management by Will Larson.

Larson’s experience is particularly valuable, having navigated engineering teams through periods of intense growth at companies like Digg, Uber, Stripe, and Calm.

What I find especially compelling is Larson’s application of systems thinking to engineering management. His framework of the “4 states of an engineering team” particularly resonated with me. This model offers leadership teams and board members a clear lens through which to understand and evaluate their engineering organizations.

The Four Strategic States

  1. Falling Behind: This is the danger zone. Teams here are drowning in work, with backlogs growing faster than they can manage. Technical debt accumulates like unpaid bills, and team morale starts to crumble. It's a scenario that screams for immediate intervention—either by bringing in new talent or radically restructuring how work gets done.
  2. Treading Water: Here's where teams achieve a kind of precarious balance. They're consistent but constrained. Think of a bicycle that's moving just fast enough to stay upright but not actually going anywhere exciting. The real challenge is breaking out of this comfortable but limiting state.
  3. Repaying Debt: This is the restoration phase. Teams take a deliberate step back to clean up their systems, refactor critical infrastructure, and create a more sustainable foundation. It's like renovating a house while still living in it—challenging but necessary work.
  4. Innovating: The promised land of engineering teams. Here, innovation isn't just a buzzword—it's the default mode. Teams have the bandwidth, the psychological safety, and the strategic slack to experiment, explore, and push technological boundaries.

The most successful organizations don't just manage teams—they create environments where teams can naturally evolve and transform. It's about understanding that these states are fluid, that transitions require care, and time.

And that investing in team capabilities is always more powerful than focusing on individual metrics