CA(d)FE's first Meet and Share was held on the 22d of September in Tallinn at the Palace hotel. Twenty of us gathered, mingled and debated in a friendly atmosphere.
You can already block your agendas as "Meet and Share" will take place every 3d Thursday of each month at the Palace hotel. The next one will held be on the 20th of October. Participation is free for CA(d)FE's members.
(Wanting details on memberships? Click here )
The monthly gathering is organized around the main topic proposed by CA(d)FE's members. October theme will be:
"Cultural shocks"
- If you are an expat: What was your biggest surprise when you first arrived in Estonia?
- If you are Estonian: What was your biggest cultural shock when you first travelled abroad for work?
(To register: Click here)
Last Thursday, we had a presentation on:
" How do you plan to handle a 25% inflation rate in your business ?"
followed by personal feedback and a great discussion.
The inflation is coming from both persistence of Covid-related supply chain issues and EU sanctions on Russia and Belarus following the invasion of Ukraine by Russia also creating an energy crisis in European countries. The increase in consumption prices combined with a labour shortage and supply chain bottleneck push businesses to rethink their strategy.
Transparency on the company's selling price is a good start; such as Uber dealing with rising fuel prices by introducing a fuel surcharge. That sends customers a clear message that the price increase is a temporary and necessary measure.
In supply-constrained industries where buyers have limited alternatives with which to negotiate to create a fully traceable end-to-end value chain helps build operational resiliency.
We collected some insights from HBR (Harvard Business Review):
Compensation is the top priority for only one in five workers, while work flexibility is in the top three priorities for half of all workers.
First and foremost, understand your entire value chain and its exposure to supply chain shocks.
Understand your capital structure: Restructure your loans, obtain new lines of credit, and maintain enough cushion.
Pay extra attention to global developments, realignment of countries’ alliances, and changing policies of international suppliers.
Pay attention to the Fed’s policy and your central bank and BCE announcements and meeting minutes.
in the midst of the exodus of people from the job market is to keep morale high and prevent attrition. Be more flexible in accommodating their personal needs, such as letting them work from home, which may boost employee productivity.
The luxury of pursuing non-remunerative ideas is now gone.
A natural tendency during these times is to apply for a universal axe and order an across-the-board cut of salaries, expenditures, and headcount. An obvious outcome of such actions is low morale and further attrition of talented employees.
3 business strategies becoming much more important with high inflation:
quickly adjusting prices,
prioritizing high profit-margin products,
shifting input as relative prices change.
We also shared dos and don'ts from Oracle Netsuite
We then debated a survey conducted by Grant Thornton in May and June 2022, among 5.000 mid-market companies about actions taken or planned to deal with higher costs and concerns about inflation.
When we shared the latest statements of the Bank of Estonia as featured in ERR on the 20th of September 2022, entrepreneurs around the table couldn't but share their surprise because of the discrepancy between the figures featured in the article and the reality they encountered in their business.
Those statements found in the article fuelled a lot of talks:
1. Inflation is announced to be this year around 19 per cent, mainly because of higher energy costs. Inflation is expected to fall close to 7 per cent next year, and to 2 per cent in 2024.
2. The economy will shrink by 0.5% for the year as a whole, before growing by around 1 per cent in 2023, and 3.5 per cent in 2024.
3. The average gross monthly wage will rise very fast this year and in 2023, with increases of more than 10 per cent. However, the purchasing power of real wages will only get back to its 2021 levels at the end of 2024.
4. Unemployment is expected to remain around 6.5 per cent this year and should rise to 8.6 per cent in 2023.
We finished discussing the thematic with Joseph Stiglitz's best inputs from his keynote at the Nordic Business Forum in Helsinki on 21.09.2022.
“Raising interest rates will not produce more oil. It can result in unnecessary recession.”
Peacetime economic measures such as deregulated energy markets and the absence of windfall taxes cannot function under wartime conditions, and policy needs to change.
That work has already started, with several European states announcing energy price caps which, along with other fiscal measures, will begin to decrease inflation.
The choices made by leaders today will impact the world we hand over to the generation of tomorrow. “Let’s try not to wreck it before we do,”
