Organizational Confidence: Generating "Pricing Superheroes"

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Organizational confidence in pricing is a necessity on the journey towards pricing excellence. Without it, companies face erratic discounting, misaligned goals and incentives within and across departments, and more. This webinar will highlight the importance of pricing confidence on firm preformance, as well as provide practical steps and programs your organization can design and implement to boost pricing confidence.

Stephan Liozu is our presenter.
Stephan Liozu (www.stephanliozu.com) is the Founder of Value Innoruption Advisors. He specializes in disruptive approaches in strategy, innovation and value management. He is also a PhD candidate in Management at Case Western Reserve University and can be reached at sliozu@case.edu.

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Organizational Confidence: Generating "Pricing Superheroes"

  1. 1. Monthly Webinar Series - July 2012 Organizational Confidence:Generating “Pricing Superheroes” with Stephan Liozu, Ardex Americas Copyright © 2012 by LeveragePoint Innovations Inc. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of LeveragePoint Innovations Inc. This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion. COMPANY CONFIDENTIAL
  2. 2. Sponsored by LeveragePoint the Software Solution for Value-based Pricing2
  3. 3. Today’s Presenter Stephan Liozu is President and CEO of ARDEX Americas, a manufacturing business that has been serving customers in North, Central, and South America for more than 30 years. Stephans executive specialty is the design of innovative and differentiated business strategies for industrial firms, and the implementation of advanced value-based pricing strategies. Since 2001, he has been a visiting professor in universities in Toulouse, France, teaching "International B2B Pricing Strategies" and "Innovative Strategies in Industrial Markets" and "Leadership Development" to masters degree students.3
  4. 4. The Research Journey (2009-2012) QUALITATIVE PROJECT 1 (2010)44 Interviews in 15 Industrial firms across 10 US States.Developed Initial 5 C model for the transformation to value-based pricing.Confidence construct was part of the 5 Cs and was most unexpected finding. QUANTITATIVE PROJECT 1 (2011)748 survey respondents with pricing, marketing, and business professionals.Validated the 5 C model and their impact on relative firm performance.Organizational confidence positively and significantly influenced firm performance. QUANTITATIVE PROJECT 2 (2011)507 survey respondents with account, contract, and sales managers.Research focused on antecedents and consequences of organizational confidence.Organizational confidence positively and significantly influenced performance. QUALITATIVE PROJECT 2 (2011)16 in depth interviews with top pricing leaders in Fortune 500 firms.Focusing on specific programs and projects to build organization confidence.Designed the confidence-building training programs integrating all results. <4>
  5. 5. The 5 Organizational C’s to PricingExcellence CHAMPIONS CENTER-LED CHANGE ORGANIZATIONAL TRANSFORMATION © Copyright Liozu 2012 CONFIDENCE CAPABILITIES <5>
  6. 6. Organizational Mobilization ForPricing Excellence Champions at the top leading the transformation Organizational Change requires organizational mobilization Formal and informal organizational Capabilities Organizational Confidence acts as the fuel of the transformation Center-led management through specialized experts supporting divisional decision making process and pricing projects <6>
  7. 7. Themes Emerging from QualitativeInterviews on Organizational Confidence Courage Courage to resist to customer objections Courage to increase prices when needed Courage to stand firm in front of customer pressures “We are worth it” attitude Sense of Resilience Ability to face uncertainty in the external environment Persevere when experiencing failures of breakdowns with pricing programs Ability to analyze failure, to learn from them, and to move on Scientific and Fact-based Decisions Use of scientific tools and models to support pricing decisions with internal stakeholders Conduct all necessary research and testing Reduce irrational perceptions and fears through training of the front line employees People Development Positive communication to energize teams Special coaching and mentoring programs with the sales force Strong alignment in the incentive programs around value and pricing excellence People performance management process: talent management <7>
  8. 8. Some Symptoms of Lack of OrganizationalConfidence in Value Programs Erratic discounting behaviors and intensity in sales force. Discounting in a nano second at the beginning of negotiation. Claiming value orientation in strategic statements and not realizing it. Creation of numerous new terms and conditions of sales. R&D speak innovation, marketing speaks value, and sales speaks discounts. Short term volume-driven pricing actions at the end of the quarter. Misaligned goals and incentives systems across and within departments. “Here is a book on value….go and get it done!!!” <8>
  9. 9. What is Organizational Confidence? Organizational confidence is a generative capacity of an organization to cope effectively with the demands, challenges, stresses, and opportunities it encounters within the business environment. It exists as an aggregated judgment of an organization’s individual members about their (1) sense of collective capacities, (2) sense of mission or purpose, and (3) a sense of resilience. In its most basic form, organizational efficacy is a sense of “can do” (Bohn, 2001). <9>
  10. 10. How did We Measure Organizational Confidence? (Adapted from Bohn)To what extent do you agree or disagree with the following statementsabout your organization. (1=Strongly Disagree to 7=Strongly Agree)We can take on any challengeBecause our departments work together well, we can beat our competitionWe are more innovative than most organizations I have worked inEveryone works together effectivelyPeople here have a sense of purpose to accomplish somethingWe have a strong vision of the futureWe are very certain about what we will accomplish together as a companyWe are confident about our futureWe believe in the value of our products/servicesWe have the necessary courage to stand firm to customers’ pricing objectionsWe have the necessary courage to implement difficult price changes in the marketWe have a strong sense of resilience with pricing <10>
  11. 11. Dimensions of OrganizationalConfidence (iMindMap®) <11>
  12. 12. Importance of People Beliefs <12>
  13. 13. Progressive & Pragmatic Internalizationof Pricing Practices Increased Adoption Full Adoption Pilot Programs Modification Solutions Stimuli DNA Search Behavior Success Stories Transformation Experiential Leaning Transformative Learning ► Knowledge foundation in pricing ► Change mindset/frame of reference ► Experiments & Pilot Studies ► Learn a new language (value) ► Trial & Error approach ► Importance of mentoring/coaching ► Celebration of success & stories ► Enduring and irreversibility of change ► Analysis of failures/breakdowns to transform the firm DNA © Copyright Liozu 2012 <13>
  14. 14. Some Final Thoughts! More than the sales force! (R&D, marketing, finance) Effect of environmental turbulences (competition, innovation, M&A, market cycles, etc.) Break in investments and organizational discontinuity (changes at the top, downsizing, re-engineering) Confidence does not mean arrogance. Confidence does not mean only high price or raising prices. Mindfulness is critical (resilience, attention to details, learning from failures, sensitivity to operations, deference to experts). <14>
  15. 15. Our Next Webinar – Sept 17th • Brian Clarke Vice President Pricing Evaluation International Data Corporation • Competitive Intelligence and Pricing • September 17, 2012 12 – 12:30 pm ET15
  16. 16. Thanks for Watching! Stephan Liozu @StephanLiozu (724) 203- 5404 www.linkedin.com/in/stephanliozu sales@leveragepoint.com webinars@leveragepoint.com (617) 252-287616

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