Robert F. Smith’s Top Advice From 2023 CXO Summit
Robert F. Smith’s Top Advice From Vista’s 2023 CXO Summit
In October, over 450 attendees joined Robert F. Smith at Vista Equity Partners’ (Vista) annual CXO Summit. The event offers a time for our portfolio company leaders to step out of their routines and look collectively at the challenges and opportunities they and other businesses are facing. Here’s what was discussed.
The last couple of years have seen fluctuating market dynamics and challenging conditions across many sectors. While the U.S. economy has shown resilience, with real GDP expanding by 5.2% in the third quarter, macroeconomic uncertainty persists with inflation and high interest rates.
The current economic environment has been compounded by increasing complexity in the tech landscape. Catalytic technologies, like generative AI, are changing how enterprise software is consumed and produced, as well as impacting its customers.
Now more than ever, it’s imperative that software businesses look forward and prioritize initiatives that will deliver product superiority and value back to their customers. Below, I share my top takeaways for navigating the current environment.
1. Prioritize Superior Products To Capture Value
To capture value, you must create a virtuous cycle. If you can build a business-critical product that enables user capabilities and leverages new technologies, your business will be able to create a massive amount of economic rent. That economic rent enables you to have freedom and flexibility in how you use the resources of your organization to ultimately enhance the value for all stakeholders, including investors, employees and communities. This virtuous cycle stems from superior performance.
2. Don’t Get Left Behind With Generative AI
Generative AI changes everything in technology, yet the principles of how we implement innovation largely remain the same. It changes our factors of production – how software is built and managed. However, what it won’t change is that customers will continue to rely on enterprise software solutions to enhance engagements with their customers and optimize workflows.
Invest time, attention and resources to holistically examine the right approach to integrating generative AI into your customer experience and your production workflow. Mastering generative AI ahead of your competitors will provide a massive acceleration of opportunity in your business.
3. Know Your Mission
During times of market uncertainty, it is particularly important to align behind your company’s mission and build out your organizational capacity and executive function to achieve that mission. Understand where you are today and where you need to go in the short and long term. Ensure your team is aligned with your goal and pressing forward to achieve it.
4. Cultivate a Culture of Performance
Cultivating a culture of excellence will lead to success. Implement a performance culture that aligns incentives with what customers and employees want and that creates operational rigor with talented and aligned individuals across all teams. These actions pave the way for product innovation and broader operational health.
5. Remember To Evolve
Evolution is critical in the software industry, and the rate of innovation is only increasing. This can create massive implications if you’re not in tune with ongoing changes. Recognize, appreciate and embrace practices that will enable you to continue to evolve your business.
6. Create Opportunities for Diverse Talent
Diversity is good for your bottom line. Research indicates that companies with greater relative diversity post above-average profitability, as it fosters more diverse product lines and better employee engagement. Create opportunities and a pipeline of high-quality talent for your business by establishing technology-focused internships and educational programs in your industry.
I believe the outlook for enterprise software remains positive. IDC forecasts that worldwide revenue for enterprise applications will grow with a five-year compound annual growth rate of 8% through 2026. Software is the most productive tool introduced in our business economy in the last 50 years and likely will be for the next 50. It will reach nearly every aspect of our economy as a force of positive disruption. While the current environment is challenging, the businesses that build and deliver mission-critical software that enables customer capabilities, leverage new tools like generative AI and configure their organization with the right design and people will withstand the test of time.