Technology has formed the current business landscape. It’s an irrefutable point.
Everywhere you look, technology has had a hand in shaping how we do things. From automated supply chain activity to personalizing marketing to streamlining customer care, technology is revolutionizing how professionals, businesses, and the economy as a whole operate.
And yet, technology is not a god. It isn’t perfect. Nor is it almighty. The last few weeks have gone a long way in unveiling this surprisingly prevalent fallacy as one tech giant after another has come crashing back down to earth.
Let’s take a quick stroll through the latest unsettling news in tech and consider what lessons we can glean as we move forward.
Tech Comes Crashing Back Down to Earth
The last couple of years have been particularly euphoric for the tech industry. The entire sector benefited from an unprecedented amount of attention (and accompanying revenue) driven by a cash-happy pandemic-driven online economy.
This led to many companies growing very quickly. It also spurred tech leaders to shoot for the stars, initiating projects that normally never would have gotten off the ground.
These are “moonshot” projects. IT CEO and Forbes Technology Council member Carl Rodriguez defines a moonshot as “an ambitious, exploratory and ground-breaking project undertaken without any expectation of near-term profitability or benefit and also, perhaps, without a full investigation of potential risks and benefits.”
IT CEO and Forbes Technology Council member Carl Rodriguez defines a moonshot as “an ambitious, exploratory and ground-breaking project undertaken without any expectation of near-term profitability or benefit and also, perhaps, without a full investigation of potential risks and benefits.”
Axios managing editor Scott Rosenberg adds that these big, long-term bets come with “inspiringly audacious goals” cloaked in aggrandizing rhetoric. He adds that tech leaders “use them to capture the public imagination while inspiring employees’ effort and creativity.” Moonshot projects are also most at risk during economic pullbacks …like the present.
This has led to a sloppy, harmful, and at times downright disastrous reaction for many tech companies that were caught flat-footed when their moonshot projects came crashing back down to earth. Here are just a few examples of this taking place in recent weeks:
- Mark Zuckerberg announced layoffs for 13% of Meta/Facebook’s workforce (11,000 employees).
- Crypto exchange FTX completely collapsed for still undefined reasons, exposing its founder, Sam Bankman-Fried, and casting a pall on the already struggling crypto sector.
- Elon Musk purchased Twitter before immediately laying off 50% of the staff and beginning to raise the alarm about a possible bankruptcy filing.
- After years of continual growth, Amazon announced 10,000 layoffs from its corporate workforce — approximately 3% of the group.
Do we need to keep going? Facebook, Twitter, and Amazon — these are major household names. FTX is the only one of the bunch that is less well-known. And yet, even then, support for the exchange from celebrities like Tom Brady has pushed it into the public eye.
Why the major pullback? Each situation is unique, but Zuckerberg brought up one point of unusual honesty. He said that a large part of the need for layoffs came from overly-aggressive hiring due to misinterpreting the longevity of pandemic-induced growth.
In other words, the world is actually returning to more of a state of normalcy than expected. Yes, tech is still important, but it hasn’t eliminated in-person interactions or brick-and-mortar business. This has led to a painful correction within the tech industry.
Takeaways From Tech’s Course Correction
It’s nothing unusual for a business sector to require an industry-wide correction. However, it doesn’t change the fact that they’re never fun. Fortunately, there are always lessons we can collectively learn to help us navigate similar circumstances in the future. In this case, there are a couple of big takeaways.
First, the major pullback from big tech companies is prompting many company leaders to rethink how they approach moonshot projects. Big ideas are okay at times, but by their very unscheduled and unprofitable essence, they should never stake an entire company on their success or failure.
In addition, leaders should always be careful to avoid drinking the Kool-Aid. Cloaking moonshot projects in smoke and mirrors concepts and unrealized promises is never a good idea.
Instead, those in the C-suite should get back to basics. We’re talking about things like building a strong company with an ethical code, a clear vision, and a healthy company culture.
From there, the goal shouldn’t be an aggressive growth plan designed around a large number of people. Instead, leaders should focus on filling their companies with quality employees at every step — starting at the top. Building a team of high-quality individuals is ground zero for long-term growth and success.
“Leaders should focus on filling their companies with quality employees at every step — starting at the top.”
This is where the team at Stanton Chase can help. We have spent years cultivating our expansive recruitment network and honing our hiring tools. This gives us an edge as the best executive recruitment partner in the business, particularly in key areas like tech, entertainment, and the supply chain.
As we witness the destructive consequences of poor planning and moonshot projects, remember that sustained success doesn’t revolve around big ideas or high-risk, high-reward investments. It is built on a solid foundation and a quality workforce that can go the distance, no matter what circumstances or challenges come along.
About the Author
Scott Bretschneider, a Director at the Stanton Chase Los Angeles office, shares 32 years of retained international and domestic executive search consulting experience. His global experience includes living and working in Japan, across the United States, and completing assignments around the world, including in China.