The tech landscape has changed and it’s time for tech leadership to change with it.

What began with euphoria over high valuations and seemingly endless growth expectations ended last year with market cap compaction and layoffs as a new reality set in for the technology sector. Due to inflation and rising interest rates, the industry is dominated by a “grow at all costs” mentality suddenly gave way to a necessary drive for profit – a shift that had huge implications for the entire tech ecosystem.

But changing economic conditions weren’t the only issue tech leaders faced over the past year. Many organizations constantly struggled with the question of how to deal with the demand for flexibility and control over the work location struggle to get back to the office. Suddenly what worked before no longer works, and it changes the way leaders choose to emerge and move forward.

It comes down to? With the end of free money, the technology landscape has changed – for better or for worse, depending on your point of view – and technology leaders need to change with it. Here are three trends shaping technology leadership this year and beyond:

Taking a sustainable approach to growth and profitability

When rising interest rates ended a growth trendline that had lasted more than a decade, it marked the end of free-flowing venture capital many in Silicon Valley had taken it for granted. When Wall Street started putting profitability before growth, the tide basically turned out, leaving many companies — particularly those that chase and project growth above everything else that matters in business — vulnerable.

With the market downturn leaning toward a possible recession, fiscal and operational management will move from important to critical. But the companies that flourish in 2023 are the ones who can focus on core value creation for their customers, strategically build on their strengths and turn them into opportunities. Tech companies that typically survive recessions and emerge stronger are using times like these as an opportunity to regroup and refocus, even doubling down on their benefits so that they are ready when consumer spending picks up again.

Forrester predicts This year, 80% of companies will shift their innovation efforts from creativity to resilience, focusing on business process modernization, automation, supply risk management and employee experience. However you navigate changing economic times, one thing is certain: a synthesized approach to growth, operational rigor and profitability will be essential.

Presence of leadership in a hybrid world

It’s been two years since the pandemic put us in emergency remote working mode, giving many employees a taste of flexibility, convenience and opportunity that was hard to give up. Some leaders have taken a hard line force employees back to the office. And while I firmly believe that nothing can replace the energy that comes from being together in person, I understand (and benefit from) the flexibility made possible by remote working.

The shrinking economy can work against remote workers in the short term, but it’s hard to ignore that the way we work has fundamentally changed. And hybrid models leave much to be desired when it comes to building connection and community. Finding other ways to reap the benefits of in-person presence in this new normal is becoming essential to building real connections with employees and customers.

For leaders, that requires creativity and vision. How will you build the connections and bonds needed to lead your organizations through this change? There’s no clear answer – I think it’s going to be a mix of external events, exciting locations and a greater awareness of when and how personal work creates community and strong bonds.

I also believe there are better questions than the “hybrid vs personal” false binary. As the battle for top technical talent rages on What we have to ask ourselves, despite the cutbacks in the tech sector: what is the best way for all of us to do our best work?

There will be compromises, including spending on company offsites and human touchpointsbut ultimately it’s up to leaders to sort this out for their teams.

The way forward in times of crisis

While the past year has resulted in a real level for tech companies, it has also been a forced reality check for everyone working in the industry. A decade or more of technology glorification, marked by a notable absence of troubling questions from investors and the media about the industry, gave room for questionable behavior. Now the pendulum has swung the other way to a full-fledged tech lash.

Tech leaders unaccustomed to being questioned have had to make a choice in how they respond to the current landscape. You can position yourself against the change – eg encouraging a “hardcore” work culture – or you can respond. Ultimately, customers get to decide which companies they want to do business with, and employees get to choose where they want to work. Technical leaders are responsible for formulating the “why” for their teams and their customers, and in a time of great change like this, these core assumptions and values ​​will be put to the test. Under this kind of pressure, some teams and leaders will just succumb and break.

Of course, not everyone laments the end of the undisputed age of technology and its unsustainable valuations. Many believe that the abolition of “free money” is not entirely a bad thing. And a recent survey shows that 61% of leaders are optimistic that the recession will have a positive effect on their organization. That there is still growth to be had and hugely valuable technology companies to build is a given, although it is more likely that those who are conscious about how they lead will do it.

As the predictions keep pouring in how this will all play out, the only certainty at this point is that a change of course is needed.