Pricing and Profitability Management: A Practical Guide for Business Leaders

Consolidating Findings and Identifying Opportunities to Improve Capabilities

The next step in a pricing diagnostic is to design the roadmap for organizational improvement. Management must first identify what its starting point is and then its goals for improving internal capabilities. Once the start and end points have been established, a strategy can be developed for moving forward. In the following, we show how a firm can mark out the path ahead.

Drawing a Picture of the Organization's Current State

All relevant data should be assembled and compared. In cases where the data points align, the pattern will be clear. But where variations or conflicts exist, additional work will need to be done to isolate the reasons and to determine which information source is the most reliable. The data should then be consolidated to paint as accurate a portrait of current capabilities as possible. Many teams fall into the traps of focusing on areas of personal interest or sheltering people (or groups) from less than favorable reviews. The value of the diagnostic is directly tied to the team's ability to provide an honest assessment. Any efforts to restrict the diagnostic—or the application of its findings—should be avoided.

When the combined findings from the data analyses, surveys, interviews, and benchmark investigations have been prepared, they can be put into a maturity framework (see Figure 2.5), which will illustrate the organization's current level of pricing maturity.

Figure 2.5 Pricing ...