“Change is a campaign, not a decision. CEOs can demand, but the people must want to act. Visions must be sold over & over” – Rosabeth Moss Kanter
Scholars specializing in change management widely report that 70% of projects fail due to a general of change management skills in organizations. Generally speaking, change management might happen at the individual or team level. Rarely does it happen at the organizational level where multiple teams and departments change in concert to achieve a large-scale transformation. So what does organizational change mean? In 2009, Bill Judge, a change management scholar, defined a capacity of an organization to change as organizational and managerial capabilities allowing an enterprise to adapt more quickly and effectively than its competition to changing situations. For an organization to change as a whole, learning has to be a vital component in its values, visions and goals, as well as its everyday operations and assessment.
In 2012, I conducted a survey with over 900 pricing professionals on the topic of organizational change. The goal was to identify the critical dimensions of organizational change capacity related to pricing. Having Capable Champions of change received the highest ratings among all eight dimensions. Closely in second position is the dimension of System Thinking indicating that pricing change agents and organizational actors need to think in multiple dimensions and consider interdependencies of all pricing change activities. The third critical dimension related to accountability and the embracing of a Culture of Accountability. So in essence, for an organization to engage in change and transformation in pricing, it needs capable and skilled change agents in pricing, a system approach to change at the organization level, and a strong culture of holding people accountable to get the change executed.
Here are five more considerations that are essential for organizational change:
Change needs to be intentional and focused:
Change management cannot be reactive. It has to be intentionally design and managed across the organization. Change requires sense of urgency for doing things differently. It starts with an organizational realization that some pricing issues need to be fixed. It is easier to do when the organization is facing adversity or serious pricing problems. It is less easy to do when an organization is successful. Why should I change when we are doing great? How many times have you heard that?
The vision is critical for success:
Vision is critical to drive change. The vision rallies people around a goal and an outcome. This is may be one of the most neglected component of change initiatives. Yet all change management methodologies include a shared vision in their change process. Not many firms have a declared pricing vision. In fact, a 2012 survey we conducted with 557 CEO’s showed that only 39% of them had such a pricing vision.
Change management is not project management:
These are two different disciplines. They are often mixed up. You might hear “yes we do change management as part of our project” when in fact, business professionals focus solely on the technical aspect of their projects. Project management deals with the technical side of moving from current state to future state. Change management focuses on the people side of that transition. They need equal attention and work hand-in-hand in project teams.
Pay attention to all relevant stakeholders:
A big misconception is that pricing changes only concern pricing teams and sales organizations. Organizational change deals with everyone who touches pricing (finance, supply chain, customer service, etc.) and who interacts with customers (technical support, drivers, sales, etc.). That requires different organizational road mapping exercises: from stakeholder analysis, to what’s in it for me analysis, to holistic training plans.
Change requires leadership support:
Our survey indicates that change without capable champions and top leadership support is difficult. Resistance to change might come from the top as well. The role of the top leaders are to identify and make resources available to change agents. They remove roadblocks and tackle bottlenecks.
Pricing projects are hard to implement. Pricing transformations are even harder. If your organization is stuck in time or unable to embrace large organizational pricing projects, you have to think differently and bring in change experts. Change management is a science and there are amazing training programs out there. In 2013, I became a Prosci® Certified Change Manager and it opened my eyes on how rich the change management and change leadership fields are. The new CAP™ certification (www.changeagentinpricing.com) was designed to include all these considerations as well as insights from these six change management methodologies. Join us to learn about how change management can improve the chances of success with your pricing projects.
Stephan Liozu (www.stephanliozu.com) is the Founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation, pricing and value management. He earned his PhD in Management from Case Western Reserve University and can be reached at firstname.lastname@example.org.