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“Pricing, We Have a Problem”

For the past few weeks, I’ve been listening to an excellent podcast that covers the Apollo 13 mission in great detail–which, incidentally, happened 50 years ago this week. If you’re not a space buff like me, this was the mission to the moon that nearly ended in disaster, but was saved thanks to some quick thinking and ingenuity from engineers and mission control. Back in 1995, a great movie starring Tom Hanks covered the story as well.

There are many angles to the story, but one that has always fascinated me is how Mission Control responded. The engineers at NASA were great at anticipating problems—with procedures and contingencies for just about everything. Unfortunately, they didn’t anticipate the cascade of problems that would be created when an electrical spark caused Oxygen Tank 2 to explode 56 hours into the mission.

As the mission controllers scrambled to figure out what had happened and what to do next, just about all of their procedures and contingency plans went out the window. All of a sudden they were faced with challenges they had never contemplated before…

  • How to power down mission-critical systems because they needed to conserve every bit of electrical power.
  • How to maneuver manually since the astronauts couldn’t spare power for the navigation computer.
  • How to use an engine that was only designed for landing and departing the moon to make course corrections to get back home.

Now, while the mission controllers had no plans for these problems, they did have something they could fall back on—the Mission Control creed that Lead Flight Director Gene Kranz had developed. One of it’s key principles was (and still is) this:

To always be aware that suddenly and unexpectedly we may find ourselves in a role where our performance has ultimate consequences.

The developments of the last few weeks and the cascade of issues that COVID-19 has brought upon us all are likely as shocking to us as that explosion on Apollo 13 was to mission controllers. And those of us in pricing roles, just like mission controllers back then, should recognize that our performance at this time has ultimate consequences.

As we’ve talked about recently, pricing needs to work to quickly get a handle on the supply and demand dynamics in your business and understand what changes need to be made to quotes, allocations or product lines. Pricing also needs to be very careful and ensure that any steps the company takes to try to solve immediate problems don’t ultimately make things worse.

And beyond those near-term challenges, companies will need to navigate the various twists and turns to get back to “normal”…whenever that may be. Working effectively with other groups and departments is more important than ever—just like it was for mission control 50 years ago. Others have found these resources to be helpful with exactly that:

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