How To Manage Politics & Conflict For Better Price Decision Making 🥇
How effective is your pricing teams’ price decision making capability?
Is there a big difference in price decision making across teams and industries? What happens when a pricing organisation or department goes through a rocky patch in performance and ends up fighting, politicking or conflicted over the price decisions they make? Do you think how you deal with conflict could be contributing to lags in pricing team performance?
In any company, especially large pricing organisations, conflict is part of daily price decision making – especially during governance meetings, price rise discussions, and during the broader transformation process of centralising pricing administration and strategy.
Pricing is the DNA of a business. It’s only when businesses try to change how they set and manage price and revenue that they come to realise this. Before this time, pricing is something that people subconsciously do but are hardly aware that it exists as a formalised discipline.
The reality is that conflict and high-performance price setting and price management go hand in hand. If you can’t or do not want to deal with conflict, then even if you have all the technical pricing skills in the world, pricing and revenue management positions are not for you.
In essence, conflict can be a great source of innovation for pricing teams. But you need to be resilient and know how to manage conflict and the awkward interactions, situations and people that are associated with conflict.
Conflict can be a positive source of energy too – but only when it is used and managed correctly. After years of consulting engagements, we’re convinced that conflict is the lifeblood of great pricing problem solving and price decision making. Conflict is one of the greatest contributing factors to high performance and underperformance – for both pricing teams and their leaders.
Of course, you’re free to agree or disagree with these observations and findings. However, through our work and research on pricing team, we have routinely discovered that when pricing leaders disregard the energy and tension commonly brought about by workplace conflict, pricing team performance and credibility plummets. Dysfunctional behaviors quickly override high-performance norms. This includes blaming others, denying the root source of problems, complaining about issues rather than solving them, and protecting your turf or a rather large ego.
Either way, we strongly believe that workplace conflict has to be dealt with as soon as possible in order to solve problems faster and better and avoid creating even bigger problems further down the line. But the question is, how can pricing teams do this more effectively?
In this article, we will discuss the types of team conflict and common causes of conflict. We will also share with you the guideline on how to deal with conflicts. In addition, we will provide you with steps on how to build an effective and fighting fit pricing team for price decision making.
As Thomas Isgar (author of the book, “The Ten Minute Team”) says, “Conflict can destroy a team which hasn’t spent time learning to deal with it.”
Types of Team Conflict
Conflict is very common in teams. Conflict can be defined as aggressive interactions wherein one party disagrees or opposes the actions, decisions, or principles of another party.
One company conducted a study on workplace conflict back in 2008 and discovered that employees spend around 2.1 hours a week dealing with conflict. If converted to dollars, that comes to approximately $359 billion (considering paid hours), or around 385 million working days.
There are two common types of team conflict. They are: substantive (also called task) and emotional (or relationship).
- Substantive conflicts happen from things like tasks, goals, and allocation of resources. In price decision making, for example, a pricing team member may want to use a particular software program, however, another team member may want to use a different system because it produces a more detailed analysis. Conflict will occur if none of them is willing to give way or compromise.
- Emotional conflicts occur from things like insecurity, annoyance, jealousy, envy, or personality conflicts. Differences in working styles are a common cause of emotional conflicts. For example, one employee wants peace and quiet to concentrate on her tasks. However, one coworker swears that playing music while working stimulates his creativity. Thus, both end up being angry and annoyed if they can’t reach a viable resolution.
Some Common Causes of Conflict
Conflict emerges from different views between people. Below are some common causes of negative conflict in teams:
- Information – When some data or details are missing, incomplete or inaccurate.
- Environment – Something in the environment like office politics leads to the conflict.
- Skills – People don’t have the appropriate skills needed to carry on their tasks.
- Values – A clash of personal values can cause conflicts especially for people from different cultures.
- Identity – The people’s sense of identity puts them at odds with each other because of their deep personal beliefs about their identity. For example, believing that “losing” an argument is humiliating.
People come across circumstances where they enter into disputes with other people. Oftentimes, we handle things by reaching a mutual agreement, however, there are times conflicts escalate. Well, disagreements can happen everywhere, including workplaces too. But how do we deal with conflicts? How do we resolve them? The next topic answers these questions.
How to Handle Conflicts Effectively
Have you been into a dispute or disagreement with a colleague or a teammate? At one time or another, you probably have. Workplace and team conflicts are very common. Thus, conflict resolution is a vital component of a team or organisation.
Ignoring conflicts can have a negative effect on teamwork and productivity. Handling conflicts effectively will help maintain a healthy work environment.
There are several responses to disagreement in price decision making. These may involve, paying no attention to the issue, using passive-aggressive actions, or even pointing fingers at the other people involved. Obvious mistakes usually just appear in retrospect.
Here are a few tips for solving team conflicts effectively:
Recognise the conflict
Face the conflict head-on to avoid anger build-ups. Encourage team members to let each other know right away when they don’t agree with another team member’s viewpoint. Built-up resentment may eventually lead to nasty arguments. Thus, getting these petty disputes out in the open can help prevent bigger conflicts.
Think and take a deep breath
Take time to think through the course of action that you would like to take. Avoid disastrous behaviours such as:
- Being rude
- Defensive behaviour
- Being judgmental about others’ behaviours
These kinds of behaviours will make colleagues lose confidence in you and view your being argumentative as manipulative. Addressing the conflict directly and discussing your issues logically will gain you more ground in the team than using unethical methods.
Let each team member be heard. Allow each of them to say his or her opinion about the conflict. Letting them explain and clarify their viewpoints removes the problem of miscommunication. Also, allowing them to justify their standpoints may encourage more understanding and agreement from other team members.
Identify facts and assumptions
After letting each team member explain their opinion on the conflict, list down the facts and assumptions that were made. By listing down the complex side of an argument can make things look clearer to the team. If one angle of the argument lacks reasoning, it may be clear during this process. Examining the information as a team though prevents illogical arguments or possible “favouritism” from team members.
Break up existing alliances
Oftentimes, friendships in the workplace can affect team projects as it clouds judgment. Colleagues may just agree to anything because they’re afraid of losing a friendship. When discussing the final team positions, it’s best to break up these existing alliances to avoid this behaviour and allow team members to look at conflicts free of persuasion.
Reassemble the Teams
Meet with the team again as a whole after smaller groups have been permitted to discuss issues freely from every side, viewpoints change and solving the initial dispute. By analysing and evaluating the argument together, the team can go forward in agreement or a mutual understanding.
Acknowledge and celebrate the victory as a team
Acknowledge certain contributions from every team member. This will boost their morale and also feel good about being of help towards a solution. This will also drive the whole team becoming more coherence because of their collaborative success. Celebrating the victory promotes team bonding.
Conflict is inevitable, both in life and in the workplace. We will always deal with different people that have different ideas, personalities, and approaches than ours in the workplace. Some may have a good set of conflict resolution skills and others don’t have. Just be proactive when it comes to conflicts, and don’t allow it to grow out of control.
So, how do you build an effective and fighting fit pricing team for price decision making?
Below listed are some steps that you can follow in order to build an effective pricing team for price decision making:
- Assemble a diversified team, including different ages, genders, functional backgrounds, and experience. Additionally, if everyone in the executive meetings looks and sounds alike, then the chances are that they probably think alike, too.
- Meet together as a team regularly and often. Team members that are strangers with one another don’t know what’s their opinion on issues, impairing their ability to argue effectively. Hence, frequent interaction builds the mutual confidence and familiarity team members require to argue on points.
- Get the team members to assume roles beyond their obvious product, geographic, or responsibilities. In other words, being the Devil’s advocates, great innovators, and action-oriented executives can work together to ensure that all sides of an issue are discussed.
- Think outside the box. Try role-playing, putting yourself in your competitors’ shoes. By doing so, it creates fresh perspectives and engages team members, spurring interest in problem-solving.
- Be the referee. Don’t let the team acquiesce too soon or too easily. Often, what passes for consensus is really disengagement.
A high pricing team knows how to deal with conflict and recognises its key aspect of the job. They know how to resolve it in order to progress to high-performance pricing. Underperforming teams and leaders don’t. Saying this, however, there are times – especially during complex business transformations, implementations and price improvement projects – where the bitterness between conflicting team members is too deep for anyone to resolve.
For the pricing team, for example, each team member may have a different outlook and under the right set of conditions, those differences heighten to a disruptive force and energy – leading to morale issues, workflow problems, errors, and latent power structures.
It is common to find that one member’s differences can contrast sharply to another’s, building tension within the team. No matter what’s the cause, if conflicts are left unresolved, they can immediately affect teamwork, productivity and morale. However, by being bold, you can take steps to prevent these issues from happening and utilise difference to promote diversity of thinking.
What are the behavioural signs of a world-class pricing team that can deal with conflict and solve difficult problems?
- They work with more, rather than less, information and debate on the basis of evidence and facts;
- Develop multiple alternatives to enrich the level of debate;
- They develop a framework for dealing with conflicts so whenever the debate turned to the ‘dark side,’ members had a way of pulling the focus of the debate back;
- Pricing teams share commonly agreed-upon goals – and don’t have secret agendas;
- They have fun and add a bit of humour to the working day even though the pressure is on;
- Maintain a balanced power structure and neither of the teams pulled the authority or experience card to outdo the other;
- They resolve issues quickly and head-on without forcing consensus or denying the emotion belying the disagreement.
As mentioned, conflict is inevitable. It is a part of any work environment. When you have a pricing team working under stress, with different personalities, conflict will certainly arise.
Having an effective conflict resolution technique to resolve conflicts if it starts to have a negative effect on the project is crucial for any pricing team. Though conflict can sometimes be a creative fuel that helps groups compete and work more efficiently and productively, it can also easily ruin and put everything to a dead stop.
In every team, office, project, and workplace, conflict will occur. It’s impossible to avoid it. However, what you do to handle it can define the success of your pricing team. To really define your success, consider the 7 steps on how to handle conflicts effectively (provided above).
For a comprehensive view on integrating a high-performing pricing team in your company,
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.
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