Five tips to keep calm in an economic storm, from a thriving tech company
Tech companies around the globe are tightening their belts as the fear of recession looms. In fact, McKinsey reports that 81 percent of leaders expect a recession. Even previously untouchable tech giants like Meta, Google and Amazon have recently made headlines for mass layoffs amid this uncertainty.
Adding more fuel to the fire, exclusive boutique banks that have long capitalized on the success of tech start-ups are starting to feel the burn — or worse, going up in smoke. Recently, US$212 billion tech-lender Silicon Valley Bank collapsed. Signature Bank followed suit shortly thereafter, catching the ‘banking contagion’ and going under, sparking panic and leading experts to warn that this is only the beginning.
To stay thriving, keep calm and grow on
Despite the economic storm causing many tech companies to batten down the hatches, California-headquartered SnapLogic, a global leader in intelligent integration and enterprise automation, is experiencing record growth. In the past year alone, the company has substantially increased its headcount and expanded its global customer base and operations.
Following a US$165 million financing round in 2022, SnapLogic opened new offices in Australia, Germany, France and the United Kingdom. Recently named the top workplace in the San Francisco Bay Area, SnapLogic also announced the appointment of Ahsan Malik as CFO in September 2022. He has been integral to its strong growth trajectory in the face of uncertainty.
"There will always be periods of disruption. And when times get tough, it’s understandable to feel panicked and tempted to cut costs," Malik tells The CEO Magazine. "Members of the C-suite may be inclined to stay cautious and step on the brakes. However, it’s crucial to make thoughtful decisions. The leaders of tomorrow see opportunity in uncertainty."
It’s crucial to make thoughtful decisions. The leaders of tomorrow see opportunity in uncertainty.
Malik says it’s important to surround yourself with a leadership team that is data driven and metrics obsessed.
"There’s a delicate balance between investing for growth and tracking the returns, particularly in areas that are underperforming," he says. "But doing so allows an organization to quickly shift to areas that will drive better and faster growth. This speed and agility, enabled by real-time data and agreed metrics, is fundamental to success."
Malik shares the five key strategies that can help all organizations keep their cool and become resistant to recession.
1. Continue to invest in research and development
In today’s highly competitive landscape, it’s imperative to invest in R&D to continue bringing innovative products and services to market. This can help to create new revenue streams and maintain a competitive edge, even in challenging times.
Consider using this time of disruption to step on the gas and move forward with confidence and optimism, speeding past the competition.
Capitalizing on the success of ChatGPT, the AI chatbot that’s taken the world by storm, SnapLogic released its own version called SnapGPT, the world’s first generative AI for enterprise integrations. Instead of drafting blogs or subpar rap lyrics, SnapGPT enables IT and business users to accelerate business innovation by automating and integrating data flows in minutes – a task that used to take weeks.
Consider using this time of disruption to step on the gas and move forward with confidence and optimism, speeding past the competition. Research demonstrates that companies that continued or increased their investment in innovation during a recession generated three times more growth compared to their industry peers for up to five years after, in many cases, leapfrogging their competitors.
2. Target responsible growth to thrive
Responsible growth hinges on balancing economic profitability with social and environmental responsibility. By focusing on long-term sustainability, investing in employee training and development and building strong partnerships, companies can position themselves to not only survive a recession but thrive on the other side of it.
Building an award-winning workplace culture, one that is dynamic, collaborative and rewarding, is also vital to fostering innovation. Creative ideas solve tough problems. By prizing continuous learning and development and thriving on teamwork built from trusted relationships, companies are well-positioned to weather any economic storm.
3. Diversify revenue streams
Expanding into new markets or developing new products and services to reduce reliance on a single market or product is a smart move in any economic situation. According to McKinsey, an approach that balances growth, margin improvements and balance sheet optionality helps leading companies outperform those that focus on just one of these dimensions.
An organization’s client base should be top priority when venturing out to diversify revenue streams.
As the global business economy is becoming increasingly customer-driven, an organization’s client base should be top priority when venturing out to diversify revenue streams. Beyond securing new customers, companies should strengthen engagement with existing customers by focusing on products or services that can add extra value.
By diversifying their revenue streams, companies can mitigate the risk of a downturn in a particular industry or market, maintaining their growth trajectories.
4. Build resilience with data
Value and return on investment can take many forms, and organizations benefit from looking at a variety of metrics when funding new projects or initiatives. What’s the short- and long-term capital investment and/or anticipated savings? What’s the impact on your existing team and resources? What productivity and time-to-value gains can be expected? How soon before the organization begins to see the benefits or return on investment? Data is at the heart of all of this, so don’t make any important financial decision that isn’t supported by data.
Going on the offensive with digital is key to getting ahead – and staying there.
According to Gartner, investing in the right digital initiatives at the right cost can blunt the negative effects of economic pressures in the short-term while building a long-term competitive advantage. Going on the offensive with digital is key to getting ahead – and staying there.
The current landscape is seeing companies cut their workforce while demanding the same objectives and productivity levels are met. To achieve this, organizations must give people the ability to connect systems faster and get answers more quickly. Integrating disparate systems and automating core processes are critical to accelerating business growth and success.
5. Focus on connection
Building strategic partnerships is essential for companies looking to navigate economic uncertainty. By forging partnerships with other companies, firms can access new markets, leverage complementary technologies and drive growth.
This past year, SnapLogic significantly enhanced its Partner Connect program. This has resulted in the certification of more than 100 partners’ specializations for turnkey solutions in nearly 20 technical, functional and industry categories. Strategic partnerships can create new opportunities for revenue generation. However, building the right partnerships is critical.
The single most important question to ask is, "Who is going to be the best partner for us on a long and winding journey?"
Many in the venture capital business are well-connected with great experience. But not all know how to build a great company that is durable, especially in an environment with this much uncertainty. The single most important question to ask is, "Who is going to be the best partner for us on a long and winding journey?" Select partners that will offer support and help navigate all the twists and turns ahead.