To up your skills in this area we strongly recommend reading pricing guru Hermann Simonâs book Confessions of a Pricing Man: How Pricing Affects Everything. His firm Simon-Kucher & Partners is the leading pricing consultancy in the world â you might consider engaging them.
Related Quotes
In retrospect, when I sought the counsel of these more experienced men, I had been seeking simple answers to complex questions - do this, not that - because I was unsure of myself and stressed by the demands of my new job. But simple answers like the âstart highâ pricing advice - so seductive in its rationality - had distracted me and kept me from asking more fundamental questions.
Recognize, localize, depolarizeâthese are the secrets to building an organization that can walk and chew gum at the same time.
So where do you start in helping your organization become a master of paradox? Here are some suggestions:
- Be honest about the implicit biases in your organization that skew important trade-offs. Go out of your way to include individuals with countervailing views in important conversations.
- Challenge yourself and others to get better data on the hidden costs of default trade-offs. Donât assume that no data equals no downside.
- If youâre a manager, resist the urge to standardize trade-offs across the organization. Be willing to sacrifice a bit of uniformity for more locally appropriate decisions.
- Never accept an either/or. Think creatively about how you could achieve your goals without sacrificing other equally vital goals.
- Work systematically to equip people with the information and skills they need to make smart trade-offs, and then push those trade-offs down.
- Give frontline teams a genuine P&L, radically reduce the number of KPIs, and hold people accountable for results.
- Even if youâre not the CEO, search for ways to âstop the train.â Question every click of the ratchet that moves power and decision making toward the center.
These days, Iâm wary of seemingly simple incentive rules that promise amazing results. They are rarely simple, and often leave collateral damage. Usually, a better option is to have a frank discussion about what we should value and why. Why should we care about exploring more designs early on? Why should we aim to speed up engineering velocity? Once people understand and buy into those values, they can make the best decisions on how to apply them.
For an excellent overview, read Geoff Smart and Randy Streetâs book Who: The A Method for Hiring; to learn the details of the process, read Bradford D. Smartâs book Topgrading: The Proven Hiring and Promoting Method That Turbocharges Company Performance.
To tackle the cash conversion cycle, start by reading âHow Fast Can Your Company Afford to Grow?â a Harvard Business Review article by Neil C. Churchill and John W. Mullins.