Effects of Inflation on Business - Not Your Typical Recession

You’d have to go back to the 70s to find a time when inflation rates exceeded the levels they are reaching today.

Most current operations leaders were still in school back then or just cutting their teeth in the industry. The few already in leadership roles certainly weren’t managing in a high-cost environment coming hot on the heels of a global pandemic with ongoing material and labor shortages making it exceedingly challenging to increase production volume and meet pent up demand.

Now things are changing once again. While it can be tempting to think that the economic downturn will naturally resolve some of the persisting supply chain and talent issues, the reality is a bit more complicated. As demand shrinks—as it will do abruptly and significantly for many sectors and products—it is reasonable to assume that supply will do some catching up and shortage gaps will close. The current situation may not change the labor pinch much for manufacturers either. The phenomenon of the Great Resignation will likely keep talent in short supply.

But there is no need to panic because manufacturers already have the answers they need.

Complete the form to download “It’s Not Your Grandfather’s Recession” to discover the 4 ways to drive performance in a high inflation environment.

Frequently Asked Questions

Why does TBM say today’s recession requires a different operational excellence approach?

TBM explains that today’s recession is fundamentally different because it is shaped by persistent volatility, labor constraints, and supply chain disruption rather than a short, cyclical downturn. The article emphasizes that traditional recession playbooks focused on cost cutting and waiting for recovery are no longer sufficient. Operational excellence must now enable agility, speed, and resilience so organizations can perform reliably amid ongoing uncertainty.

Why don’t traditional recession cost‑cutting strategies work anymore?

Traditional cost‑cutting strategies often weaken the organization’s ability to execute. The article highlights that across‑the‑board cuts reduce capability, increase firefighting, and slow decision‑making—making recovery harder, not easier. In a modern recession, companies that cut without improving execution discipline struggle to respond when conditions shift again.

How does modern operational excellence help companies outperform during today’s recession?

Modern operational excellence helps companies outperform by focusing on controllable execution fundamentals rather than short‑term financial actions. The article emphasizes disciplined daily management, improved productivity, and faster problem‑solving to stabilize performance. Organizations that strengthen execution during the downturn are better positioned to protect margins, retain talent, and accelerate ahead of competitors when opportunities emerge.

Meet the Expert

Dan Sullivan

AdvisorEmail Dan

Dan Sullivan is an Advisor and serves on the TBM Board of Directors. He is a coach at heart and is passionate about operational excellence, cultural change and results.