Combating Inflation

Combating Inflation

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Inflation is raging, the worst of it being in Europe and parts of Asia.

People are forecasting at least a 15% cumulative increase over the next 24 months.

And the stagflation we’re beginning to see, primarily in Europe and in some segments of the United States, means we’ll see an additional increase in price and even lower sales than before.

This cycle will pass, but it will take time, so leadership matters.

I see companies still reflecting on a number of factors, such as the difficulty of sales forces in corresponding to changes in selling price and increases in cost.

This will come to haunt them. It is best to learn different ways to recompose prices and match cost increases, whether they are increases in wages, raw materials or interest rates.

Is your company taking action to ensure a realistic growth margin that comes from accurate pricing and productivity improvement?

As inflation rises, any delay will reduce your cash flow — the blood supply of your company.

If you are dependent on a country other than the U.S. for raw materials, take into account the effect of a strong dollar.

Cash is king — manage for cash.

Don’t forget to take on the leadership role with transparency — communicate, communicate, communicate!

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