Change Management: How to Make Sure Your Pricing Transformation Sticks

Federico Boccardo, the global pricing excellence and analytics director for Cargill, spoke on change management at Pricing Power of 50 2023. He walked through the approach his team took when revolutionizing their pricing structure to give it centralized continuity. This framework worked wonders for their team and can help your organization move through major shifts in pricing and beyond. 

The Need for Change

The only constant in today’s business climate is change. Between supply chain challenges, economic uncertainty, and environmental shifts, we’re firmly in a “BANI” environment.

• Brittle – A system can work well on the surface, even if it’s on the verge of collapse
• Anxious – Information is now the lifeblood of a healthy business, but too much of it can lead to anxiety
• Non-Linear – Cause and effect are no longer a feasible structure in all cases
• Incomprehensible – It can feel impossible to fully understand all the moving parts that make up events, causes, and decisions

All of this adds up to a need for continuous change and adjustment. However, if you look at the makeup of most businesses, you’ll see they aren’t designed to change easily. This is because, in the broadest strokes, they are made up of systems and humans. 

Systems are typically rigid. When they are originally being built there’s room for customization, but once they are set in place, they are architected to be the antithesis of change. 

On the other hand, humans are wired to fear and resist change because we are creatures of habit. When combined, this makes it easy to fall into a “do nothing and hope something magic happens” mindset. 

Approaching Change 

So, if the odds are stacked so firmly against us, how can we ensure that change happens when it needs to? Being prepared requires businesses to shift their thinking around several aspects of change. 

Boccardo shared some of the biggest lessons he’s collected from years of experience with change management in an increasingly BANI world. 

Change as a Continuum

 A common issue with those looking to instigate change is thinking of it solely as the tactical aspects of its execution. Basically, what concrete steps need to happen to get from point A to point B. However, much of the work that goes into a major change takes place long before any tactics are put in motion. 

To ensure a smooth transition, take time to fully strategize and prepare for an upcoming change. You should already know the potential points of resistance from your organization before you run into them. This gives you the time and skills to overcome that resistance.  

Change as a Bridge

The quickest way to lose your team’s support and understanding is by jumping straight to the desired state without finding the gap between where you are and where you want to be. If there’s no explanation of why a change is happening or what the plan is, people will be too scared to take the leap. 

Be sure to clearly communicate the importance of the change and why it has to happen. Your team needs to immediately understand how their lives will be impacted and how it will affect them and the business. It’s also essential to convey the vision of the end state, so they have something to aspire to. Having clear expectations and plans will leave your team much more confident in the eventual outcome. 

Change as an Accumulation

The momentum toward any change is made up of three key factors. 

• Dissatisfaction – If the situation is bad enough that people want to change, they are far more likely to take steps toward that change
• Vision – How enticing and understandable the desired state is will affect people’s motivation for working toward it 
• First Steps – A clear action plan with well-defined first steps will make the process less daunting 

If the strength of these three factors is greater than the existing resistance within your team, then you can move forward with the change. Otherwise, any progress you make towards the desired state is in jeopardy of falling apart. 

Change as an Ongoing Project

When a big shift is first implemented, it tends to have a great amount of fire and momentum behind it. However, as time goes on, other priorities come to the forefront. In order to ensure the “stickiness” of the changes you make, it’s a great idea to plan for a post-implementation check-up. 

If you have a clear understanding of your desired outcome, you can return to the core team six months later and compare what the business said it was going to do to what has actually happened. This gives the opportunity to continue to grow far into the future. 

Components of Successful Change

There are four core building blocks that make for a successful change in business. Some hold more weight than others, but without each piece, your transformation campaign will not have what it needs to stick to the landing. 

Strategy

Every change that’s made within your company needs to be rooted in strategy. Working with data to create a smart and effective plan is the best way to direct your team toward success. 

Every phase of your change management plan needs to be tied back to your overall strategy. 

Technology 

Digital transformation isn’t just a buzzword. Nearly every significant change on the horizon for B2B companies and beyond is going to lean heavily on digitization and technology. In fact, having the right tech in your corner can be the deciding factor for quick and efficient change management. 

For any pricing initiative, it is important to assess and be ready with the needed infrastructure, pricing tools, and deployment strategies. This allows your time to be spent on interconnecting systems and facilitating automated solutions. 

Execution

When starting any pricing transformation or commercial expense transformation, you need to have clear roles and responsibilities for every member of your team. 

The chain of command and understanding who is in charge of what is vital during transitional periods because there is little to no time spent revisiting rules while in the middle of a change. 

People

No change management can be successful without the support of people. People make the change happen, so getting support from both upper management and employees on the ground floor will make a huge difference when trying to make a change that lasts. 

If you can not capture people’s hearts, you’ll never get the whole organization mobilized toward the end goal. 

In Conclusion 

Pricing transformations are, at their core, major changes for a company, and approaching them from the perspective of change management can ensure a smooth and long-lasting transition. Every business is rigged to resist change, but your approach can make all the difference. 

Focusing on the strategic aspects as opposed to the tactical steps for change and taking the time to explain the “why” behind the shift will set your team up for success. At the end of the day, your team is the driving force behind continued success. It’s your responsibility to make sure they arrive at the end goal with you.