The Business Acumen Implications to Business Leaders of Inflation


Economists, business leaders, individual contributors, and consumers are once again starting tobusiness-acumen-inflation worry about the potentially devastating impacts of inflation. As many businesses focus on building Business Acumen skills as a core competency to help them grow, Advantexe has developed this blog post for business professionals to understand the impending implications of inflation and some of the things they should be thinking and doing about it in this volatile business environment.

What is the root cause of inflation?

Unfortunately, there is no easy answer to that question as this, like many other economic factors, has become too politicized. The simplest answer that I can provide is that inflation results from an increase in production costs or an increase in demand for products and services. The situation we find ourselves in today is a result of both these things happening simultaneously. Throw in the threat of World War III and at the very least the economic uncertainties of the global economy, you have a recipe for potentially devastating inflation.

3 Things Companies Could be Doing in Times of Uncertain Inflation

As world leaders in the design, development, and delivery of award-winning, business simulation-centric Business Acumen training solutions we are continuously researching and finding ways to enhance the capabilities of our clients. Here are 3 big things that companies could be doing in times of uncertain inflation. If you are a functional leader or an individual contributor, you have an obligation to challenge the status quo. I hope these ideas stimulate some conversations and maybe even some actions.

Re-Think Your Value Proposition

What got you here may not get you there. You need to take some time to seriously think about what you are offering your customers and is it still the same value? Along with that, you need to think about every element of cost and consider if it is still critical whether it is the raw materials you are using or the marketing message you are using to create awareness. Think about ways of making sure that your costs don’t keep going up so that you either can’t afford to make your product or service or your customers can’t afford to buy it.

Re-Think Your Brand

Think about your business this way: every day there are customers who think your products are either underpriced or overpriced. They buy when they think you are underpriced and go to your competitors when they think your products are overpriced. This new wave of inflation provides a unique opportunity to correct misalignments and the perception of your brand. Is your brand strategy the right brand strategy for inflationary times? Is this an opportunity to change that brand perception through the messaging and or pricing of your products?

Re-Think Your Pricing Model

Notice I didn’t say lower or raise your price. I shared that this is a unique opportunity to change your pricing model. Maybe you change the size of your packaging. Or look for ways of bundling. Or adding additional services as the same or slightly higher costs as a way to differentiate. When you change your pricing model, you can:

  • Identify and acquire new customers
  • Fire the customers that no longer fit
  • Spread costs
  • Find different suppliers
  • Makes you less predictable to your competitors

In summary, having runaway inflation is not the time to go undercover and hide from the realities. It’s the time for you to change things up and proactively experiment and create breakthrough innovations that will lead toward more revenue and more profit in spite of the increased inflation.

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Robert Brodo

About The Author

Robert Brodo is co-founder of Advantexe. He has more than 20 years of training and business simulation experience.