Tech leaders must adapt or risk obsolescence
While it may not always have felt it, the tech sector has had a relatively easy path to growth over the last three decades.
The fall of the Berlin Wall in 1989 ushered in a “peace dividend” which released swathes of public money that would otherwise have gone into national defence. Much of this spare cash was funnelled into R&D and innovation.
Looking back from the vantage point that we have now — dealing with the challenges of populism, nationalism, and strategic rivalries — it was a halcyon time. The world feels far more uncertain and volatile now than it did then.
Most notable of all, the growing strategic rivalry between China and the US risks a complete global decoupling. It is leading both the US and Chinese governments to increasingly talk about indigenous innovation, inward foreign direct investment restrictions, export controls, and supply chain security.
What this means for tech companies caught in the middle is that it is getting harder to do business. As a consequence, political risk is back on the boardroom agenda with a vengeance.
Our current crop of UK tech leaders need to adapt to this changing of the tides. If they don’t, they’ll fail — and fail quickly, to paraphrase a famous search engine.
Ironically, this period of stability that we’re coming out of has been the anomaly. For much of history, the world had been an uncertain place — we’re arguably just returning to baseline.
With the benefit of experience, having been around from the last time it felt that the tectonic plates were shifting under our feet, I’ll share three lessons from the past that apply just as much now as they did then.
First, companies need to become comfortable dealing with the diverse set of risks and challenges presented by the current business environment, and adapt accordingly. In practice, this means regular reorganisations of people and other assets, keeping their organisations nimble and hungry.
Linked to this, there needs to be a corporate mindset change that empowers management to make decisions as quickly as possible and then move forward on them.
This will encourage leaders to move away from seeking perfection and instead focus on the tactical battle of seeking advantage in every deal they do.
Finally, any business partnerships and M&A decisions will need to become even more cutthroat. Alliances should be devised and discarded at an eye-watering rate to seek competitive advantage.
Because, rest assured, if you’re not the one taking this approach then you’ll be the one subject to it.
If these three lessons are followed, then success will come. Though in the current landscape, it may only be fleeting before the next set of challenges arise.
Get the news as it happens by following City PM on Twitter.
Main image credit: Getty