5 Simple Ways To Close The Pricing Skills Gap In Australian Businesses
Pricing skills: Taylor Wells advisory firm observes pricing team turnover is on the increase in Australia and continuing to rise.
Many pricing leaders and teams are not delivering results and outcomes expected of them.
Boards and leadership teams are questioning whether they have the right executives leading wider business and pricing transformations.
Pricing skills: Our research shows substantial pricing skills capability gaps across a large majority of teams impacting pricing decisions every single day. This is corroborated by various third party studies.
Hundreds of millions of dollars are lost due to a combination of uninformed pricing decisions, resistance to change, and people covering up mistakes and weaknesses.
pricing managers are being hired without the necessary pricing skills or experience needed to function effectively.
The result of bad hires unfortunately is lost revenue and margin opportunities and dysfunctional team behaviour.
Taylor Wells is a real revolution in helping companies improve their commercial capability and delivering sustainable margin improvements.
We help companies plan and scope their future pricing strategy and capabilities and then enable the recruitment and team building required to implement the strategy.
To stop the dysfunctional pattern now, we want to share with you how you can use your recruitment process to accelerate the type of thinking and behaviours you want to see in your teams and culture.
The following section gives you an outline of a 5-step process to build a high-performance pricing team in the right way.
What are the 5 easy ways to close the pricing skills gap?
1.Define key competencies & behaviours
Most pricing job descriptions are vague, a little confusing or non-descript. We commonly see jobs ads published with several lines clearly copied from other job adds.
People need to know what is expected from them. Not all pricing teams are the same. Assuming they are will confuse people applying for new pricing roles.
Tell people in plain English what the job entails.
Explain the business vision – get them motivated and enthusiastic about being a part of something great.
Then give them realistic performance measures that are clearly aligned to what they are doing.
How can a person be successful in a pricing role when they don’t know what they’re supposed to be doing or what they need to do to get recognised?
2.Evaluate team capability & potential
Stop wasting time measuring the wrong skills.
We see cost accountants and finance people in pricing roles.
Don’t assume great technicians make great pricing managers. Often, they don’t.
Get advice on what pricing competencies, traits and behaviours are before you hire or restructure your team.
Compare your team’s relative capabilities using cross industry benchmarks.
Pricing team benchmarking for individual pricing capability is available. Make the most of this information.
3.Ask people the right questions
You’ve only got a limited time (usually 1 hour) to find out whether someone is going to be a good fit for a role.
Make it a useful hour.
The opportunity cost of a bad hire is enormous.
Not just because of wasted salaries and millions of dollars down the drained every single day, but in terms of loss opportunity, revenue loss, lost customers, losing credibility, wasted time and effort….
…not to mention the stress and burden underperformers place on team morale and productivity.
4.Get people to showcase their talent and abilities
There a certain class of person out there who have spent timing gaming the interview and CV screening process.
They know exactly what you want to hear. They are interview performers.
Try to avoid falling for people with a slick interview performance. Being good at interview does not necessary equate to authentic leadership and real capability.
Often the opposite is true…
Our research shows, for example, that managers that overrated their pricing capability during interviews, on their CVs and/or in surveys tended to perform poorly in our online Pricing & Commercial Assessments (PCA).
Don’t simply trust what you hear:
- Find evidence.
- Get talented people engaged and motivated in your story and plans during the recruitment process.
Find out how people behave when you are not there
The source of truth about future performance is someone’s ability to work well in teams. Do they gain the other people’s trust and buy-in or do they repel people to the point of them leaving the team.
Do your teams pull together? Or do they drive a wedge between teams and created cross functional rivalry?
People copy people. Good and bad.
Bad role models infect a business culture and ultimately destroy team performance.
Good role models are highly qualified / skilled. They genuinely care and show compassion for others. They know what they are talking about both from a technical standpoint and from a people management / leadership position.
Find out who these people are using carefully curated talent networks and screening processes.
Bad hires can happen to any business, but if they happen repeatedly in a pricing function it is generally because something is wrong with how teams are set up and qualified during the recruitment and hiring process.
Recruitment is one of the best ways to create cultures that enable high performance teams.
Unfortunately, it is an industry marred by charlatans, and spiv recruiters only interested in making a quick buck.
Pick your recruitment partners very carefully.
But most importantly, set up your team properly. Integrate the function into your wider business. Position them for success.
When pricing teams do not know what is expected from the outset, and responsibilities and performance metrics are not aligned with business strategy, they underperform and fail to deliver key outcomes and results.
Don’t let your recruitment process be the reason you allowed unsuitable people into the business.
Organise your people for the future of pricing in the best way possible.
Introduce a more scientific approach to teambuilding.
Design innovative recruitment programs that will help you carefully examine and identify the best people for pricing roles.
See our recent blog on top 10 skills for commercial managers.