3 tips for tech leaders in an inflationary environment

3 tips for tech leaders in an inflationary environment


Leading in uncertain times is always challenging, and the current inflation rate is no exception. Here are some suggestions on how to lead in an inflationary economic environment.

Inflation, dollar hyperinflation with black background. One dollar bill is sprayed in the hand of a man on a black background.
Image: SERSOLL/Adobe Stock

The economy has entered a bit of uncharted territory, with seemingly persistent inflation, which most of us have never experienced in our careers. This is combined with a challenging labor market and low unemployment, stock market turbulence and global conflict. Tech leaders might think they’re immune to these externalities. However, inflation can impact our operational and strategic activities. Here are some suggestions on how to manage and mitigate these impacts.

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Consider your assets

Tech organizations often manage massive pools of expensive assets, from employee technology like laptops and smartphones to expansive data centers and infrastructure. In the immediate term and perhaps most obviously, inflation will likely raise the price of acquiring new assets and gathering parts and replacements for existing assets. Perhaps more subtly, inflation will also increase the cost of financing these assets, magnifying its impact.

This inflationary double whammy can take weeks or even months to make its presence felt. The hundreds of companies involved in producing your servers or laptops digest increased component and financing costs and build those into their economic models.

Savvy tech leaders can use this time gap between rising inflation and its impact on prices to their advantage. Accelerating significant asset acquisitions, locking in current pricing, or moving expensive assets off the books through techniques like cloud adoption are obvious ways to save money. Similarly, examining whether the lifespans of existing assets can be extended may avoid the effects of rapid inflation should they be transitory.

Manage your people costs

A significant driver of inflation has been rising salaries, and you’ve likely experienced increasing costs for new staff and demands for pay increases from the current team. Wage inflation, combined with a tight labor market, is one of the reasons for the sudden and rapid rise in inflation and a significant challenge for tech leaders.

Consider non-salary benefits or benefits with high perceived value and lower costs than additional salary. For example, flexible working locations and hours may cost little in productivity but may provide an edge against your competitors. Similarly, emerging benefits like “wellness weeks” or additional holidays can be effective. Employees often value a few extra days off more than an equivalent bump in base compensation.

If you’re merely throwing your hands in the air and assuming you’ll be unable to compete in the current talent environment, you’re doing the wrong thing. If nothing else, if you can’t crisply and compellingly argue why someone should join your firm and how you’ll help them grow and mature as professionals, you will lose the talent battle in the short and long term.

Become the organization’s eyes and ears

You’re not the only leader in your organization struggling to respond to turbulent and uncertain times. As a leader who deals in data and information, however, you’re uniquely positioned to help your peers and leadership monitor and understand how the environment is changing.

Tech leaders have been talking about the power of technology in predictive reporting for decades; what better time to apply that toolset than when leaders are struggling to understand the markets and how they impact their firms?

Take the time to review your tech portfolio and focus on current and in-flight investments in reporting, analytics and data management. What tools do you have that could help identify challenges in the supply chain or emerging sales trends that can help inform the organization? What mechanisms do you already have in place to spot emerging economic or market trends? What underutilized analytical tools could provide valuable insight with targeted training and support to the right end-users?

After several years of focusing on the technology aspect of IT, most leaders are starved for information. Redouble efforts to become your organization’s eyes and ears, providing early alerts and insights on key metrics to help other leaders make informed decisions.

Uncertain times are always challenging, particularly when you’re leading a team or providing critical insights to colleagues. No one knows how the current economic environment will play out, and perhaps this is a mere blip on the road to continued prosperity. Acknowledging the challenges and using your unique positioning as a tech leader to meet them will make you a better leader and help your team and organization weather the storm.



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