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3 TIPS FOR TECH LEADERS IN AN INFLATIONARY ENVIRONMENT

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by Patrick Gray in CXO
on May 10, 2022, 1:25 PM PDT


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 suggestions on how to lead in an inflationary economic
environment.

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, but inflation can impact our operational and strategic
activities. Here are suggestions on how to manage and mitigate these impacts.

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CONSIDER YOUR ASSETS


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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.


EXECUTIVE BRIEFING NEWSLETTER

Discover the secrets to IT leadership success with these tips on project
management, budgets, and dealing with day-to-day challenges.

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Patrick Gray
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By Patrick Gray
Patrick Gray works for a leading global professional services firm, where he
helps companies rapidly invent and launch new businesses. He is the author of
Breakthrough IT: Supercharging Organizational Value through Technology as well
as the companion e-book The Breakthrough CIO's Companion. He has spent over two
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