It has been a stormy four and a half years. Inflation has been worse than we probably realize. Don’t take my word for it. This is from https://www.bls.gov/

If you had your money in a savings account or treasury bond, your interest rate was close to zero until 2022. If you were working, your wages very likely declined (a lot) after inflation.

Lucky companies were able to keep wages below inflation while maintaining pricing power to protect margins. Alas, many companies were not this lucky. But now even the lucky ones are facing higher costs across the board. There is a shortage of low-skilled labor willing to work for $16/hour. Skilled staff demand market adjustments (and the leave if they don’t get what they asked for). Regardless of what the current statistics look like, there is a lot of “pent up” adjustment to be worked out. There are plenty of six figure professionals making less now than they did 4 years ago on an inflation-adjusted basis. Presumably, they are more marketable today with the extra years of skills & experience.

This is not a post about politics, COVID, or elections. This is about C-level executives and boards dealing with reality “as is”. High inflation is a fact. Whether it continues is speculation. (It could also accelerate, ease or reverse. Hopefully.) As a business leader, you can’t control the winds and tides of inflation. You must be the captain of your organization, trimming the sails and navigating conditions as you find them. Plot a course that anticipates what is to come. Keep your hand on the tiller to adjust when the storm gets worse unexpectedly. And be ready to take advantage of smoother seas when you do make it out of this rough patch, whenever that may be.

This post has been brought to you by someone who did a fair bit of sailing. I faced a few weather emergencies. I survived and got smarter each time. I definitely recommend learning some lessons the easy way, without getting blown into dangerous waters yourself.