Adobe’s CEO Sizes Up the State of Tech Now

Mr. Narayen, one of the longest-serving technology leaders, has overseen a broad expansion of Adobe since he stepped into the top role in 2007. While the company may be best known for software programs such as Photoshop, Acrobat and Illustrator, its business also includes a suite of tools and data analytics products used by marketers and brands. Adobe also purchased the cloud-based video editing and collaboration software Frame.io in 2021. 

A far bigger deal came more recently. In September, Adobe said it planned to buy its rival Figma, a fast-growing collaboration and productivity platform used by designers and developers, for $20 billion. The deal is Adobe’s largest acquisition to date. 

The Figma deal surprised Adobe’s investors and led to criticism from some Figma users who said the acquisition would slow innovation and lead to pricing changes. The purchase also faces scrutiny from federal regulators. Adobe has said it is confident the deal will close in 2023 and that it plans to allow Figma to operate autonomously. 

Mr. Narayen recently spoke with The Wall Street Journal. Here are edited excerpts: 

WSJ: A number of prominent tech companies have laid off workers or paused projects. How would you sum up the state of the industry now?

Mr. Narayen: I think the macroeconomic environment, honestly, is being used as a mechanism to say: Is prioritization being done appropriately? There is an element of the financial community that is looking at, where perhaps it was growth at all costs a few years ago, now they’re looking at a balance of growth and profitability. At Adobe, we do that all the time. 

WSJ: So, how does the economy look from your perspective now? Are you noticing any notable shifts in spending among your customers?

Mr. Narayen: I think the consumer sentiment, overall, looks actually fairly positive. I would say the U.S. has demonstrated tremendous resilience overall. People in Europe are perhaps a little bit more concerned about the winter and energy prices and inflation. We look at it and say there’s macroeconomic [shifts] and then there’s our addressable market. In the long run, the trend towards digital is not going to change. 

WSJ: Figma has some users who are concerned about the pending acquisition. Are there lessons from prior acquisitions at Adobe that will inform how you work with Figma? 

Mr. Narayen: The lessons that we learn from other acquisitions include first getting a really deep appreciation of what the existing customers like about it now. With Figma, we’ve been talking to a number of customers, and they could not be more excited about what we could do together. We are cognizant existing customers may have some questions, and the only way we can demonstrate that we have the right intentions is with time. 

WSJ: Adobe is 40 years old. Where do you think the innovations will come from next?

Mr. Narayen: Digital is transforming everything: how we work, how we live, the entertainment that we consume, education. So I think of Adobe as a company that is going to use digital to impact how individuals—small and medium businesses and larger enterprises—communicate, create content, monetize content, manage content. 

We just think that the opportunities are only going to expand and not diminish. If you look at artificial intelligence and what’s happening with AI, and the ability for AI to make our products more accessible, more fun, more productive for individuals, I think we’re in the very, very early innings. 

WSJ: Adobe has emphasized flexibility with a hybrid in-office schedule. Does work in 2023 look much different than it does today? 

Mr. Narayen: We’ve always believed in flexibility. But for meetings that matter and moments that matter, I don’t think there’s any substitute for being able to be in the room with people to read off the energy, to read off the body language. Especially when you’re incubating new projects, I want people together; I think you accelerate the incubation process, the alignment process. Then, when it’s more execution, I think giving people the flexibility to execute the way they want is completely fine. 

WSJ: You’ve been a CEO for 15 years now. Is there a part of your job that occupies much more of your time now than it did at the beginning? 

Mr. Narayen: Every year I try and say: What are one or two big areas where it feels like I can have an impact and I can influence where the organization should be headed both in terms of learning from the talent that exists within the company and outside the company? And then, having the ability to use that to change priorities. I think way too often people do what they’re good at, rather than perhaps where the company wants them to make an impact. 

WSJ: For other leaders who want longevity in a role, what’s your advice? 

Mr. Narayen: If you don’t love what you do, there is no way that you can do the role. I love what I do. And I have other passions. That allows me to have the longevity that I’ve had. Plus, I have no idea what I would do if I’m not doing this. 

Write to Chip Cutter at [email protected]