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Economic uncertainty, social and political unrest, environmental catastrophe, and global health crises continue to impact people and businesses worldwide. Yet, amidst each of these disruptions, managers must maintain forward momentum to ensure their teams achieve success.

This past year we’ve seen tech giants fall due to mismanagement, recklessness, economic turmoil, a lack of innovation, or some combination of unforeseen circumstances. Yet simultaneously, new leaders have emerged: companies that have found opportunity in our world of perpetual uncertainty, seizing the moment, and taking a risk to move ahead.

Today’s digital world demands vigilance. Tech leaders must not only prepare their teams and organizations for disruption, but also ensure that their products and services are agile enough to embrace the unknown changes ahead. Global, existential forces are not the only drivers of disruption; tech managers must also navigate new regulatory pressures, unknown cyber-threats, a growing IT skills gap, breathless emerging technology hype, and more.

Here are five lessons that the tech world has learned this year about disruption, innovation and constant change, and the takeaways for managers to drive growth through transformation in the year ahead.

Economic uncertainty demands strategic digital investment.

Inflation and recessionary economic conditions are challenging businesses worldwide. In a down or deteriorating economy, conventional wisdom calls for cutting costs, including tech spending. Yet, Gartner data shows that IT spending will continue to increase (albeit tempered by inflation), with spending on tech forecast to grow more than 5% in 2023. Technology is deeply integrated into the global economy and must play a part in responses to economic turbulence, potential recession, and recovery. In the 1990s when IT was strictly “back office,” it was a cost that could be cut. Today, IT generates both efficiencies and revenue and cannot be cut without damaging business performance.

However, that’s not to say managers should bask in the safety net of a steady budget. Economic pressure heightens the desire and urgency to realize time-to-value for digital investments, and executives continue to demand better returns from tech spending. Current economic conditions provide an opportunity for businesses to strategically invest resources in technology solutions. As the recipients of this tech spending, managers must ensure they maximize returns for the business through strategic technology deployments.

For example, automating finance processes to facilitate fast and accurate data analysis can support the business in making sound financial decisions during times of uncertainty. Migrating to cloud-based infrastructure services and cloud-native applications can drive better IT cost and operational efficiency. Expansion of citizen development initiatives with no-code or low-code tools can support agility and speed across departments. Within all business functions, consider opportunities to use technology to reshape revenue streams, change cash flow, or create new value propositions. Through strategic digitalization, managers can help their enterprise to emerge from economic disruption stronger, leaner, and more innovative.

Labor market volatility inhibits innovation.

Tech managers are no stranger to labor market volatility. From the Great Resignation of 2021 and beyond, to massive layoffs at digital giants that have dominated news headlines in recent months, it seems that the tech workforce is constantly being upended. Employees continue to leave their roles because of burnout and low job satisfaction. Managers struggle to hire crucial tech talent, yet when their teams are finally filled out, constantly increasing tech salary demands puts a strain on budgets and can lead to layoffs. This kind of constant disruption is incompatible with innovation. Gartner analysts have predicted that by 2025, labor volatility will cause 40% of organizations to report a material business loss, forcing a shift in talent strategy from acquisition to resilience. In other words, talent retention is becoming as critical as profit margins or customer retention on the balance sheet.

The organizations that we see solving the talent volatility problem do so by looking for technical talent that is likely to stick around instead of continuing to seek out “unicorns.” Rather than fixate on technical wizardry, they look for people with the baseline skills they need, who are interested in business operations. Employees who will stay at the organization for five years (or more) stand to generate far more business value than high-flying superstars who might move on to their next job within 18 months. Hiring and retaining the right talent also creates a virtuous cycle, as top talent desires to work for organizations that are innovative. In a recent Gartner survey, more than 50% of employees reported a desire to contribute to meaningful work that drives change.

In 2023, tech managers must hire for staying power and long-term value contribution. Look for candidates who want to learn how the business works and make an impact, demonstrate enthusiasm and aptitude for learning new skills, and are resilient and adaptable enough to grow with the organization, and evolve their role in response to a changing business environment. Simultaneously, offer a value proposition that encourages retention. Prioritize factors that are important to top talent, including competitive pay, the ability to contribute to meaningful work, and job flexibility.

Sustainability must be a top tech priority.

At COP27, U.N. Secretary General António Guterres stated that “we are on a highway to climate hell.” As political solutions to climate change continue to look murky, the tech industry will play a key role in addressing the global climate crisis.

IT has a huge impact on organizations’ carbon footprints. The embodied carbon of laptops, cell phones and countless other devices used across enterprises contributes significantly to enterprises’ greenhouse gas emissions. Technologies like cloud and artificial intelligence (AI) consume colossal amounts of energy, which only serves to increase as such technologies gain computing power. In fact, Gartner predicts that by 2025, without sustainable AI practices, AI will consume more energy than the human workforce.

Yet, paradoxically, it is the application of these technologies that will identify sustainable business opportunities and drive enterprise sustainability efforts. The IT circular economy is growing, as executives show interest in reducing, reusing, and recycling PCs, mobile devices and other electronic equipment. Sustainable AI practices have emerged, such as the use of specialized hardware to reduce energy consumption, energy efficient coding, transfer learning, small data techniques, federated learning and more. Hyperscale cloud service providers are leading the IT industry on environmental sustainability and running their facilities with world-class energy effectiveness and carbon-neutral operations due to growing customer demand, public reputation, investor attraction, energy costs and regulatory policies.

A recent Gartner survey found that 87% of business leaders expect to increase their organization’s investment in sustainability over the next two years. That same survey found that 86% of business leaders see sustainability as an investment which protects their organization from disruption. Additionally, 83% said sustainability activities have directly created both short- and long-term value for their organization, and 80% indicated that sustainability has helped their organization optimize and reduce costs. Sustainability investment offers a “two for one” by supporting responsible consumption while simultaneously benefiting the business. Tech can be the driving force behind these efforts.

Organizations need a new sustainable technology framework that increases the energy and material efficiency of IT services, enables enterprise sustainability through technologies like traceability, analytics, renewable energy, and AI, and deploys IT solutions to help customers achieve their own sustainability goals. Managers should lead the charge by championing technology-led sustainability solutions and practices within their teams.

Cybersecurity becomes increasingly complex in a fast-moving business environment.

Cybersecurity has become a top business priority. In a recent Gartner survey, 88% of board directors reported viewing cybersecurity as a business risk as opposed to a technology risk, demonstrating that security is part of the enterprise value chain. Within IT, cybersecurity also remains a top concern; CIOs surveyed by Gartner ranked cyber and information security as their top area of increased investment for 2023, and spending on information security is projected to see a double-digit rise next year.

Yet even as organizations increase their spending on and attention to cybersecurity, the rapid pace of business and acceleration of digitalization means that mistakes become increasingly likely. Attack surfaces are expanding as risks associated with the use of cyber-physical systems and IoT, open-source code, cloud applications, complex digital supply chains, social media, and more complicate the ability to successfully protect the enterprise. And organizations are not well prepared to manage risks from emerging technologies like AI: A Gartner survey found that 41% of organizations have previously experienced an AI privacy breach or security incident. Simultaneously, cyber threat actors are evolving to remain one step ahead. Major breaches have highlighted new and emerging attack techniques, while known threats like Log4j continue to haunt organizations months and potentially years down the line.

The key takeaway for tech leaders is that it is not possible to provide appropriate protection through brute-force spending. Rather than trying to protect against every threat, including those new and unknown, enterprises need to prioritize cyber spend that protects business outcomes. Trying to beat threat actors without a strategic approach to protection level agreements is a battle that organizations will almost certainly lose.

For managers across functions, the broader lesson is that security is everybody’s problem, not just that of IT. Security readiness is regularly impacted by business decisions that are completely unrelated to security, and few organizations recognize when this happens. Cybersecurity is a choice. Organizations get to choose their levels of protection and their investments to achieve a balance between the need to protect and the need to run the business. Managers outside of IT must understand and accept the responsibility that security is a context and consequence of decisions they make for their teams and the business every day.

Responsible investment in emerging technologies will pay dividends.

Emerging technologies have always generated hype. Within the last year, the metaverse has stood on a pedestal, touted by tech giants and startups alike as the next great disruptor. Media speculation and vendor hype has whipped enterprises into a frenzy of anticipation over this immersive digital utopia, with industry leaders like Mark Zuckerberg, Eric Schmidt, and Satya Nadella promising a complete transformation of digital experiences and unprecedented opportunities for those who get onboard. But…the metaverse does not yet exist, at least in its fully realized form.

In a recent Gartner survey, more than half of CEOs said the metaverse was very unlikely to be a key technology for the development of their business. Further, the Gartner Hype Cycle for Emerging Technologies places metaverse at an embryonic stage of development, projecting that it will take more than a decade to reach mainstream adoption. The metaverse does not stand alone in its position as a promising, but hyped, emerging technology: Web3, NFTs, superapps, generative AI, and numerous other innovations have massive potential implications for business disruption, but all are still in early stages of development. This year, we’ve seen the damage that hype can have – just look at the abrupt crash of stablecoin in April or the recent collapse and subsequent bankruptcy of crypto exchange FTX. These busts shook an already declining market and eroded trust among market participants, leaving crypto in a delicate state with an uncertain future.

Yet, the precipice of hype does not preclude emerging technologies from being worthwhile investments. During the dot-com bubble, Pets.com and others like it failed due to flawed business models, but internet commerce eventually thrived. Similarly, despite hype and market failures, today’s emerging technologies continue to move forward.

Returning to the metaverse, companies have found success with metaverse-adjacent technologies like platforms for immersive streaming, VR headsets, and haptic gloves by focusing on targeted use cases. For example, immersive environments have helped police departments train in de-escalation and crisis intervention techniques. Manufacturing organizations have experimented with projecting unintrusive process instructions into the lenses of safety glasses. While the market sorts out how to monetize public metaverse offerings, these internal metaverse-adjacent experiments are providing immediate, practical benefits to the enterprise.

These emerging technology applications work because they are targeted, researched, and — most importantly — because they offer better value than the non-digital alternative. It’s not simply an investment in technology for the novelty of it. These high-value use cases bring new business opportunities and innovation that wouldn’t be possible otherwise. Too many leaders succumb to fear of missing out (FOMO) when new tech trends emerge and demand that something — anything — using the new tech be implemented immediately. This leads to wasted investment, missed opportunity and disillusionment about the new landscape. Emerging technologies are critical and demand attention and investment, but managers must exercise patience and avoid falling victim to the hype. Responsible exploration is key.