PHASE 16: GOVERNANCE AND ORG DESIGN
Design an internal pricing organization to produce and execute upon future pricing strategies.
Many companies don’t have a pricing organization. Some do not yet need one. However, those who do need a robust pricing organization often arbitrarily assign pricing control to product, marketing, strategy, finance or sales. Or even worse, they split pricing control across several functions. Where pricing is placed and the resources it has will significantly impact its focus and activities. To build and execute upon pricing strategies effectively, you need to carefully consider where pricing naturally fits into the organization. This includes responsibilities, operating model, talent, skills, capabilities and processes needed to be successful.
1. The CEO actively promotes a message of pricing to value.
2. The CEO is responsible for setting the overall pricing philosophy in your organization.
3. Senior executive positions involved in the pricing process.
4. There is a pricing escalation process in place based on data.
5. A broad cross-functional team is involved in pricing decision making (vs. pricing group alone).
6. The head of pricing reports to a high executive position (CXO or SVP).
7. Your pricing team is staffed enough to spend considerable time working strategically.
8. Your pricing team is empowered to drive data driven decisions.
9. Roles and responsibilities between pricing and other groups is clearly defined.
10. You have a defined talent strategy for your pricing organization.
• Pricing Organization Assessment
• Optimal Structure Design
• Roles and Responsibilities (RACI)
• Talent Strategy
• Governance Operating Playbook