News and Insights
Why a Recession Isn’t Necessarily Bad for Tech
November 15, 2022
Originally published by O’Dwyer’s on November 14, 2022.
Debate rages on regarding whether or not major global economies, including the US, are currently in—or headed towards—a recession.
I’m not an economist, so I won’t opine on what to call what we’re currently living through, but with the NASDAQ off more than 30 percent since the beginning of the year, and with every tech company, from Amazon and Apple to Zillow and
Zoom, announcing hiring freezes or layoffs, there’s no doubt that winter has come for the tech sector.
In May, I wrote that a correction in the tech industry would mean “a return to fundamentals, in business and in how we communicate.” Today, after more than a decade of growth and irrational exuberance, tech companies, large and small, public and private, are experiencing an undeniable slowdown.
While I’m sad for the people who have lost their jobs and incomes, I view this period as an opportunity for tech to get back to its roots. Without the pressure of keeping up with crazy expectations regarding growth and valuations, this is a great time for tech companies to remind themselves, their employees and their shareholders why they do what they do. And why what they do matters.
A return to fundamentals
When a company is regularly delivering to its shareholders, and employees are benefiting financially, it’s easy to lose sight of the bigger picture—of the place your company uniquely occupies, and what that means for your customers, your employees, your industry, the world.
So, as we move into this period of economic uncertainty, now is the perfect time for anyone running communications at a tech company to take a moment to examine their corporate story with a few things in mind:
1. It needs to come from the top. A corporate story shouldn’t be a work of fiction; it should reflect the beliefs, knowledge and passion of those running the company. As such, executive leadership needs to not only buy in to the importance of a strong and ownable corporate story—they need to be actively engaged in developing and preaching it.
Asking a marketing communications team and/or agency to create a corporate story without direct participation from the people who run the company and interact with its customers every day is a recipe for failure.
2. Context. Startups always have a Founders Story, typically used when talking to investors and prospective employees; it is meant to inspire. This is bigger than the “two guys in a garage” trope that is often used to describe Silicon Valley’s entrepreneurial culture.
The Founders Story looks at the founding purpose of the company, the problem or opportunity those who started the company could see and had the passion and know-how to solve or seize. Reconnecting with that Founders Story, especially for more mature companies, is a good way to provide a unique context to your corporate story.
3. Ask why. In his book, The Moral of the Story: A Storyteller’s Guide to Helping Brands Build Relationships with People, my colleague Jeff Freedman introduces the theory of “five whys” to get to the heart—or the “moral”—of a brand’s story. He encourages his reader “to listen carefully and find the place or places where there is an opportunity to go deeper by asking why. And then (…) keep asking it until you can’t dig any further.”
Anyone who’s ever dealt with an executive who is also an engineer knows that the first question will rarely lead you to an “ah-ha!” moment. And, in my experience, asking smart questions is rarely frowned upon by those leaders.
4. Go long-form. In the corporate world, we have all become slaves to The Deck. And while you may want to ultimately develop a deck to tell your story, that is not where you should start. A good friend of mine who’s also an executive at a competing agency said it well: “Today, people are obsessed with micro-stories and lose sight of the thread that connects them.” By developing an actual narrative, you have the space to consider context and connection points that lead you to what actually matters.
5. Invest in communicating internally. A tech company’s employees can be its biggest asset—or liability—in communicating why what they do matters.
My colleague Betsy Henning, the Founder of AHA, a FINN Company, and leader of FINN’s Employee Engagement Practice, recently wrote: “We stand at a launching point where the solutions, bonds and trust built throughout these challenging times can be seen for what they truly are—an opportunity for every company to become its better self—trusted in the eyes of the world, their clients and, most importantly, the employees who are the true beating heart of every company, every brand.”
When I started my career more than 25 years ago, I believed wholeheartedly in the world-changing power of technology and the people who create it. Over the last decade or so, as the industry has matured and we’ve seen profits win over progress, it’s been difficult not to view things with a more jaded eye.
My hope is that by taking a step back and focusing on their raison d’être, beyond the capitalist pursuit, the tech industry, and all of us who work in it, come out of this recession—or whatever we wind up calling it—with a greater sense of purpose.