The turbulent 2020s: What are the leadership learnings for tech?

Patrick Jones

February 19th, 2024

The turbulent 2020s: What are the leadership learnings for tech?


PE-backed tech businesses have faced two challenging periods back-to-back. What leadership lessons have they learned? Here are some key reflections and observations from working with clients during this turbulent period, with valuable insights from Sam Kingston, CEO of Mobica, an IoT software engineering software provider, previously backed by Inflexion and sold to Cognizant last year.

The 2020s have proven something of a rollercoaster for tech businesses so far, thanks firstly to the pandemic, and then the geopolitical events and macroeconomic swings of the last couple of years. While these two periods have been challenging for different reasons, both have required tech leaders to re-evaluate how they deliver value to their customers and shareholders alike. How have tech businesses adapted to these changing times and what leadership lessons have they taken away?

Out of crisis comes growth

Marketing reveals the new philosophy of sales

Demand generation, lead generation, brand, and storytelling: In a challenging environment, businesses have had to work harder than ever to ensure they are personalising engagement with their audiences, delivering a seamless experience, and bringing value to the end customer.

Marketing has become the primary driver of MQL to SQL conversions, responsible for building an emotional connection with the customer and an inbound lead generation engine across diverse channels and content campaigns. This is all tied together by a CRO or Revenue Operations Director, to ensure full integration and transparency of revenue streams across the business.

As winning new customers has become tougher, maximising existing customer spend through personalised upselling and cross-selling has been equally critical. This is especially the case as sales cycles become longer and longer for new logo acquisition. For leadership, that translates into delivering first-class customer success, and account management, with a focus on KPIs such as average contract value, net promoter scores (NPS), and annual customer churn rates, to track and optimise the existing customer base and go-to-market foundations.

Evolution of exit strategies & the importance of succession planning

A more challenging IPO environment and growing maturity of the private equity ecosystem in Europe means that more large technology businesses are staying private and bringing in multiple investors to continue their growth journeys. We’re seeing a continued rise in partial exits or businesses staying with the same investor within a continuation fund.

When it comes to leadership structure, this trend continues to underline the importance of succession planning and ensuring businesses have the right functional structure for future growth. Few future investors wish to take on an asset where succession planning is a key challenge. As organisations scale, leadership considerations could include breaking the revenue function into Chief Revenue Officer and Chief Customer Officer responsibilities, or Chief Product and Technology Officer positions. We’ve also seen a continued focus on the level below the C-Suite, providing sound ‘bench strength’ to upper quartile leadership teams. And, not to forget, the imperative for a succession plan option for the existing CEO.

Organic growth

A tighter funding landscape over the last 18 months, driven in large part by interest rate hikes, has sparked a shift in investor priorities towards strong underlying organic growth and working capital. Investors want to understand the true growth story of a business, the strength of its go-to-market strategy and marketing engine; does it have good metrics to show customer retention, cross-sell and upsell capabilities, along with fit-for-purpose technologies, processes, systems, and infrastructure to enable scale? Does it warrant the valuation multiples that it is putting forward? For technology businesses, this shift has meant going back to the fundamentals and putting strong foundations in place to drive efficiency, data flow, and decision-making.

And in the realm of new market entry, accreting maximum value from channels and partnerships has grown in importance, particularly for brands entering new international markets, removing the need to put an embryonic and cost-intensive sales team on the ground.

“What we see in the market today is that funders are transitioning away from blindly backing ‘in vogue’ technology, data or services businesses with grandiose projections,” comments Sam Kingston, CEO of Mobica. “Now is the time for a smarter play - a more diligent review of businesses for their consistent commercial viability and scaling potential. It is not about the growth sprint but the marathon of performance building”.

Tech businesses and investors have had to reassess their expectations and strategies in the last 12 to 18 months, as the short, sharp pandemic boom came to an abrupt end. But the sector’s foundations remain strong and, as innovation continues unabated, the majority will emerge stronger for it, acquiring valuable experience and resilience that will serve them well for 2024 and beyond.

Look out for my next article which will look at the trends that will define this year and how tech businesses can take advantage.

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