The inflation storm is here. It’s more than just eggs and postage stamps. Whether you realize it or not, your org is sailing through rough waters of inflation. You cannot control the winds and swells, so you just have to trim your sails and navigate through it as best you can.

How bad is the inflation? It depends on how you measure. CPI is a common proxy used for broader inflation trends. CPI data is bleak. This is from https://www.bls.gov/

While costs went up nearly 50%, savers fell behind. CD’s and treasury bonds paid 1-2% until 2022. Wages went flat or down for many:

This is not a political post. The focus here is business. You are a leader. Your organization depends on you to navigate the economic conditions, no matter how stormy. Denial might help you manage stakeholder perceptions temporarily. But ultimately, you need to manage your actual costs and revenue models. You may find your best workers demanding overdue compensation adjustments. You may find your target customers can no longer pay the prices required to cover your costs. You may even find that your tried-and-true “endless shrimp” special leads to outright bankruptcy. (I miss you Red Lobster!)

I have no crystal ball. I don’t know if inflation will worsen, ease, or even reverse (I doubt that last one). Even if inflation went to zero tomorrow, there are still lots of pent-up adjustments that must work through the economy. Great professionals have seen their disposable incomes shrink or go negative as their paycheck fell behind their monthly bills. They will jump ship if other opportunities open up. If conditions stay challenging, well that is even harder to navigate.

Use this time to get your ship in order. Prepare for whatever conditions are ahead. Keep your hand on the tiller so you can quickly change course if there is a big surprise. Importantly, you want to be ready to go fast when you make it to the other side of this storm…

Godspeed, Captain.