Commercial Team Leader: Why Is Your Pricing Team’s Intellectual Diversity so Important to EBIT Growth 👔
As a commercial team leader, you may not be surprised that the most critical factor in a high-performing pricing team is NOT skill. A high competency level is necessary. However, the main things we look for are potential, intellectual diversity and how they’ll fit in with people and culture.
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You can have some of the most skilled people in the industry, but if they are a disruptive influence, rub people the wrong way, and lack self-awareness, it causes chaos across your business. This will affect productivity, which directly impacts your bottom line.
In this article, we discuss how building a pricing and commercial team with a mix of different skills, styles, and capabilities is your secret weapon for solving problems faster. We will also share with you some of the traits and characteristics of the most productive pricing teams in Australia.
What Does a Commercial Team Leader Do?
As a commercial team leader, your role is multifaceted. You oversee projects, manage budgets, and guide your team toward achieving financial goals. It’s about ensuring that every project aligns with the company’s strategic objectives.
One key aspect is financial management. You monitor expenses, forecast revenues, and ensure projects stay within budget. This vigilance helps maintain profitability and supports sustainable growth.
Another crucial responsibility is identifying business opportunities. You analyse market trends, understand customer needs, and spot gaps where the company can expand. For instance, noticing a rising demand for eco-friendly products might lead you to propose a new, sustainable product line.
Negotiation is also part of your daily routine. Whether it’s securing favourable terms with suppliers or closing deals with clients, your ability to negotiate impacts the company’s bottom line. Effective negotiation ensures that agreements benefit both parties and foster long-term relationships.
Leading a team means more than just delegating tasks. You inspire and motivate your team members, ensuring they have the resources and support needed to excel. By fostering a collaborative environment, you help your team overcome challenges and achieve collective success.
In essence, a commercial team leader wears many hats. From financial oversight to strategic planning and team management, your role is integral to steering the company towards its growth objectives.
Why Every Commercial Team Leader Needs a Strong Pricing Strategy
One of the most powerful tools at your disposal is a strong pricing strategy. Setting the right price isn’t just about covering costs; it’s about understanding the value your product or service offers and what customers are willing to pay.
Consider a scenario where your company launches a new software product. If you price it too low, potential clients might question its quality. On the other hand, setting the price too high could drive them to competitors. As a commercial team leader, it’s your role to find that sweet spot. This involves analysing market trends, assessing competitor pricing, and gathering customer feedback.
A well-thought-out pricing strategy does more than just attract customers; it directly impacts your company’s bottom line. Studies show that even a small price increase can significantly boost profits, provided sales volume remains steady. For instance, a 1% price increase, if implemented correctly, can lead to an 8% increase in operating profits. This underscores the importance of pricing decisions in overall business success.
Moreover, a strategic approach to pricing helps in positioning your brand in the market. Whether you aim to be a cost leader or a premium provider, your pricing communicates your brand’s value proposition. By aligning pricing with business objectives, you ensure sustainable growth and a competitive edge.
As a commercial team leader, developing and implementing a robust pricing strategy is not just beneficial—it’s essential. It requires continuous evaluation and adaptation, but the rewards in profitability and market positioning are well worth the effort.
Why Every Commercial Team Leader Needs Intellectual Diversity in Their Pricing Team
You cannot find intellectual diversity, which is a blend of must-have pricing skills, styles, and traits, in any one person. In other words, intellectual diversity only exists in a team. You’d be on a slow path to nowhere looking for just one person to solve all your pricing and commercial problems.
For example, a pricing team that is achieving expected results and more not only have pricing expertise in a specialised area. They can also look at problems and challenges with fresh eyes. They can see beyond the established ways of doing things – they can move beyond cost plus thinking and adopt new ways of thinking about value and price.
As a commercial team leader, you know that it is almost impossible to find a candidate who possesses all the traits and skills you are looking for. Just think about your team for a minute…
- Do you have lots of diverse viewpoints on your pricing team?
- Can you say you have people on your team who help you to view a problem from all angles
- Alternatively, would you say that your team is pretty similar across many dimensions, often in furious agreement and happy with the results they achieve?
If yes, then you have a high intellectual diversity on your team, which is excellent. Your team’s probably outstanding and fast at solving problems.
If no, then you probably have low intellectual diversity on your team. This is okay, but a warning sign for a commercial team leader who wants more productivity and faster results.
A Commercial Team Leader Needs Dynamic Tension
Just having diverse viewpoints on a pricing team is not enough. A commercial team leader needs to unlock and channel the creative tension accompanying the mixture of differences and similarities on their team as well.
What’s more, the emerging role of the commercial team leader in significant organisations is not to minimise this tension, but rather to channel it as a creative force for change and making money.
For example, our research shows that developing dynamic tension relies on the commercial team leader to understand the elements (big and small) that form unique business cultures. These cultural elements include:
- Leadership and work styles (formal versus informal)
- decision-making styles (intuitive vs. analytical)
- Information-sharing methods (preference for written, oral, face-to-face, text, email, video conference, etc.)
We find that expanded networks and mindset can improve both individual and organisational performance. On top of this, results indicate that the most productive pricing teams are ones that exhibit contradictory characteristics. (i.e., the best at getting EBIT growth and innovation outcomes.)
Commercial team leaders who prepare and enable their pricing team members to understand others without judging – by leading by example – are more productive and successful than those who let their teams work it out organically.
Implications for Commercial Team Leaders
An orchestra can’t perform well if the string or wind section is not there; similarly, a pricing team won’t achieve the expected result with people whose strengths and styles are all the same.
Behavioural science demonstrates that commercial team leaders can be resistant or irritated by even the mere concept of intellectual diversity. Let alone managing it in a real business setting. It is not uncommon for commercial team leaders to reject the idea of intellectual diversity. Particularly when confronted and called out on their biases.
Although harnessing dynamic tension is a skill that few people have mastered, it leads to behavioural change, delivering EBIT growth.
By acknowledging bias in our hiring and selection decisions, commercial team leaders can do something about eliminating them. We can then expand our talent pool of potential candidates and improve financial performance and EBIT growth.
Key learning
As a commercial team leader is not necessary to entertain everyone’s views on pricing matters. It is, however, essential to accept that there are many different methods, positions, and styles by which people can accomplish goals and directives. Thus, there is the possibility that other people’s views might sometimes be better than your view.
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Bottom Line
In this article, we discussed how the most critical factor in pricing team success is ‘dynamic tension.’ Dynamic tension is fuelled by a blend of thinking styles, skills and traits. These work together to produce shared outcomes.
As a commercial team leader, you’ve got to find the right balance of people for your pricing team to create enough ‘dynamic tension.’ Dynamic tension is the driving force behind the most innovative opportunities and profitable outcomes for your company.
Below are some tips commercial team leaders can use to harness the diverse intellectual capabilities of their team:
- Measure your team’s intellectual diversity
- Recognise your own biases before you hire
- Create a psychologically safe work environment where individuals feel they can be themselves
- Build a team that brings together a mix of must-have pricing skills, as well as contradictory styles and capabilities
- Do not build a team that is a mirror image of you, the commercial team leader, and your strengths and capabilities.
Don’t lose another dollar implementing the wrong pricing and team strategy – download your free guide here on how to build a pricing team.
> Read more about Price Leadership and Pricing Options
Looking for strategic pricing and commercial role? Find your next role and the career progression you’ve been looking for here in our pricing jobs section.
For a comprehensive view on driving pricing strategies to maximise growth,
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Are you a business in need of help to align your pricing strategy, people and operations to deliver an immediate impact on profit?
If so, please call (+61) 2 9000 1115.
You can also email us at team@taylorwells.com.au if you have any further questions.
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