Why CEO’s Need to Connect with Top Talent

Organizations spend large sums of money designing and deploying talent management and development processes. They plot their aspiring leaders into matrices, grids, and other templates. These are very helpful but they are not enough. The CEO needs to be connecting personally with the best organizational talent. This is the best way to really know what is happening with them, to gauge how much value they deliver to the business, and to find out if they are living the dream. Believe me, the dream can quickly turn into a nightmare. Why is that? Because, in most organizations, you have “human talent bottlenecks” and people “demotivators”. I am referring to your middle managers and other leaders who have serious leadership gaps and can significantly affect your organization’s talent energy and passion levels. Their behaviors range from taking credit for the work of your best talent, to manipulating the results of these A players, to filtering the communication lines between the CEO and the talented staff, and to blocking advancements. As a CEO, I have worked with some of these people, and I have had to craft plans to go around them and to deal with them. Here are some of the steps I took:


1)      Connect directly with A players and make sure everyone knows the exchanges are candid and transparent. I held a list of the top 30 to 50 A players, critical employees, and promising leaders. My goal was to meet with them every 4 to 6 weeks formally or informally to gage their job satisfaction levels. By forging personal relationships with them, I was able to break through the games and filters put in place by some middle managers.

2)      Ask your problematic leaders and other “human bottleneck” to take 360 degree surveys. This is the best way to surface issues of leadership, micromanagement, manipulation, and other dysfunctional behaviors.

3)      Hold talent management review in groups so that feedback and perceptions comes from multiple leadership sources. That will isolate the unsupported and irrational views of some of the worst offenders.

4)      Make sure you tell these leaders that you know what is going to and that it needs to change. They will deny all of this but with the support from specific feedback and 360 degree survey input, you will have the opportunity to change the game. In the end, I recommend you put these less-than-mindful leaders in performance improvement plans. I have done so and it worked well to a certain extent.

5)      Invite your best talents to strategic projects and in special task forces. See them in action. How their impact to the organization. Results do not lie.

As a CEO, I trusted the assessment of my direct reports. But I wanted to make my own assessments to make sure there were no gaps in talent evaluation. Once I identified deviant behaviors from some of my leaders, I took actions to protect and “free” the potential of our best organizational talent. A bad leaders will impact your organization in many ways. Do not allow them to demotivate and negatively influence your best talent. Stay close to them and take action.

Surveys are not Created Equal

Over the past five years, I have conducted over half-dozen academic surveys in the field of value and pricing management. For every one of them, I have realized that the pricing profession is not used to taking academic surveys. Pricing practitioners might not understand the need to conduct these surveys and how different they are from surveys by pricing consultants. I am writing this small essay to shed some light about the differences:

1) Academic Surveys Advance the Profession: The surveys I conduct are designed to create knowledge that can be published in books and academic publications. Why is that important? Because what gets published gets read by scholars and eventually taught in the classroom. Creating new knowledge helps pricing get more exposure among other published topics in the marketing field. Finally, adding theoretical knowledge eventually solidifies pricing theories which eventually reach the C-suite through practitioners publications such as HBR, MIT Sloan, CMR, etc.

2) Academic Surveys are Based on Perceptions: Most of the questions being asked use agreement or usage scales to be used to respond to statements. I never ask precise or confidential pricing information which might make respondents nervous. So for example, when I ask the following question “To what extend do you agree or disagree with the following statements?”, I am trying to evaluate how pricing perceptions on specific topics influence others and eventually pricing performance.

3) Academic Surveys are non-commercial: The knowledge that is being created is then disseminated back to the profession. For every survey I conducted, an Executive Summary is sent to the participants and papers are published with Professional Pricing Society. I then present findings are various conferences around the world. Consultants will require you to sign up to their database to get a short summary of their survey results. You then get bombarded with commercial emails.

4) Academic Surveys are Confidential: you have the choice to give your name or email information to receive an award and an executive summary. You can also decide to remain anonymous. All data are aggregated and used to derive trends, relationships, and statistical models. Names and emails of respondents are discarded once the reporting is done.

5) Academic Surveys are Robust: the surveys I conduct are grounded in solid research methods and are analyzed using advanced statistics. Publishing in scholarly journals requires robust methodological underpinning. That is the only way to build knowledge and advance theory. Surveys from consulting firms are a black box. No one is really sure how methods are used and how sampling is designed. The results are informative but anecdotal. The results are descriptive and not explanatory or prescriptive in nature.

We need more formal research in value and pricing management. We also need greater response rates. It is essential for the development of our profession. I urge pricing practitioners to participate more in future academic surveys while making the distinction between academic surveys and surveys from consultants. Both are useful. But they are not created equal! Thanks for the attention and thanks for the support so far in the research journey.

Pricing and Innovation

Should innovators learn about pricing? and should pricers learn about innovation? You bet they do. If your company manages customer value with intention, these two groups of professionals should collaborate, integrate their activities, and learn about each other processes. In fact the Pricing Council should include members of the Innovation Council and vice versa. There, I said it. Managing value in the innovation process requires integration of innovation and pricing activities in both the front-end and back-end of the innovation process. Pricing components and deliverables should be included in the NPD and Stage-Gate® processes. Concepts of segmentation, willingness-to-pay, customer value modeling, value-based pricing strategies, and cost-to-serve analysis should be widely discussed in the Innovation Council. The innovation pipeline, pricing strategies for innovations, and value activities for innovation should be discussed in the Pricing Council.

Stage GateTo get there, innovators should start learning about the science and art of value-based pricing. This is why I have partnered with Stage-Gate® International to launch the very first value-based pricing workshop for innovation professionals. This workshop will be held in Philadelphia in June of this year and will cover most of what innovators should know to pay close attention to pricing and value management in the innovation process. Participants will earn the Customer Value Modeler™ certification. Spread the word. Let us get excited about integrating pricing and innovation. That is a revolution.

Can Boards Anticipate Strategic Moves?

Published by Gabriel Berczely

Adding value to strategic issues is not the only ability expected from a Board member, but for sure it is highly required as a means to reduce the risk of strategic obsolescence. Many companies fail in strategic matters not only because they lack strategic skills, but also because they keep doing what used to be the right thing to do for too long. Recent examples of companies like, Kodak, Nokia, and Blackberry, are good examples of it.

Our recent managerial research study shows that top management derives its capacity to anticipate strategic moves not only from prior experience and expertise, but also from three distinct forms of immersion in their eco-system: (1) upstream (with suppliers), (2) downstream (with customers), and (3) lateral (e.g. trade shows, benchmarking similar companies in other part of the world, having an international network of people related to the industry, signals from other industries, etc.). Immersion is understood in a metaphorical sense as for example video-game players completely immersed in their game through a constant and alert visualization of any signal appearing in the environment. The process for gathering information, assimilating it, and making sense of it is not systematic and explicit. On the contrary, it results from a tacit activity, like driving a car. That slow and constant integration and assimilation of relevant information generates small and continuous strategic moves that result, after a few years, in relevant business model changes. And this process works because of the immersion process in the eco-system and a constant learning process.

Our findings pose a big challenge for Boards. If anticipating strategic moves is a key element for business sustainability, if this capacity is related to being immersed in the environment, and if doing it is more tacit than explicit, what are the chances for non-executive Board members to develop this ability? They are so far apart from the trenches that capturing signals from the company´s eco system, and making sense of them, seems to be as far away from reality. As a result, these board members relinquish their ability to make an effective contribution of anticipating moves and avoiding strategic obsolescence. We posit that boards in general should allow their members to get familiar with their eco-system and to spend time in an immersion process. That is not of course what most CEO’s would prefer.

Getting Things Done

The difference between good and great companies is their ability to get things done and to execute religiously on their promises. Having outstanding business models, being very innovative, selling the best technologies is not enough if your company sucks at execution. I see this time and time again and I volunteer feedback to some of them in hopes that they will improve. Being creative AND getting things done is a very powerful combination of skills and capabilities. You rarely see this in leaders or in organizations.

I conjecture that business model innovation and success requires strong discipline and that this execution focus is essential for survival.

When they possess that combination of skills, they are usually unstoppable (Netflix, Chipotle, Amazon and even some industrial companies like 3M, Grainger and ARDEX for example). Most companies struggle with one of the two dimensions. That typically leads to the tolerance for mediocrity and a diluted customer experience despite having exciting offerings or business models. Starbucks for example lacks the discipline in customer experience and delivery. Some of their stores are dirty, poorly laid out, and very slow in service delivery. This lack of consistency is not found in Chipotle stores where employees religiously deliver an outstanding experience.

Another example is BusinessModelGeneration/Strategyzer; they are in the business of value proposition and business model generation. Their offering actually centers around customer experience, strategy, and innovative approaches. Yet, they are not able to plan their own 2014 US workshops for busy executives (the next one is supposed to happen in April) and they are really unfriendly when you contact them (if you get a response to emails!). This is really puzzling. What is behind this lack of attention to delivery excellence and execution?

I would propose that it is complacency with success and growth. These organizations adopt a position that they are unique and that customers will come or buy anyway. That may work in the short term until a competitor emerges and forces them to shape up. I conjecture that business model innovation and success requires strong discipline and that this execution focus is essential for survival. Organizations should pay attention to the creative and disruptive sides of their business model as well as the kick-ass execution of the business model components. This is the difference between good to great. Innovation is great. Innoxecution is better!

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