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Stop Hoarding the Pricing Knowledge!

When I was in high school and college, I worked during the summers as an office temp. I was sent to a lot of different places, but one small manufacturer stands out above all the others for being the most dysfunctional organization I have ever encountered in my working life.

My first day on the job, I met the person whose desk I would be using while I was there. My first clue that something was wrong was that his desk drawers contained nothing except for Dean Koontz novels and packages of Oreos—no pens, no files, not even a stray paper clip. My next clue was that one of the first things he said to me was, “They’ll never be able to fire me. I’m the only one who knows how to use this piece of equipment.”

This manufacturer had invested $100,000 in a piece of lab equipment and had sent only this one person to training. The vendor that made the piece of equipment had subsequently gone out of business, and this guy flatly refused to train anyone else because the machine was “too complicated for anyone else to understand.” So he spent his days eating cookies, reading novels and using this piece of equipment on rare occasions when someone asked him to. And since everyone knew he wasn’t really using his desk or his computer, that’s where they put the temp.

The real problem in this situation—besides the fact that the company was paying someone who rarely did any work—was that the company never used this valuable piece of equipment to its full potential because they didn’t even really know what it could do.

Hopefully, no one reading this post is as much of a knowledge hoarder as this guy was. But it’s far easier than we would like to admit to copy some of his thinking errors.

It’s tempting to hoard our pricing knowledge because we think it gives us job security or because it makes us feel powerful or smart. It’s so easy to tell ourselves that the people in other departments are just never going to “get it,” so why bother trying to educate them about pricing?

But the truth is, anyone can understand the basics of pricing.

And the more people in your organization grow to understand what pricing can do for them, the more valuable pricing practitioners will become to them. As management sees that good pricing can make a huge impact on the company’s bottom line, they’ll come to rely more and more on the expertise of the pricing professionals in the company. You may even have to hire more pricing staff to help fill the demand—that’s true job security.

So is your pricing team doing a good job of sharing your pricing knowledge or have you inadvertently become hoarders? If you’re not sure, check out the B2B Pricing Capability Self-Assessment. It covers pricing best practices in a wide variety of areas, including internal knowledge sharing.

We also encourage practitioners to set up a Center of Excellence around pricing. A Center of Excellence is “a team, a shared facility or an entity that provides leadership, evangelization, best practices, research, support and/or training for a focus area.” Many health care centers have established centers of excellence around particular needs like cancer treatment, heart health or trauma care. The concept has also caught on in the business world, particularly at Six Sigma organizations.

If you already have a pricing team, it’s easy to begin taking steps towards functioning like a Center of Excellence. Invite staff from stakeholder groups like sales, marketing and operations to participate in some of your meetings. Write short articles on pricing for your internal blog or company newsletter. Regularly read and disseminate information about the latest pricing trends and technology. Or brainstorm other ways to provide training or share knowledge throughout the organization.

If you’re ready to get started, check out the express guide “Building a Center of Excellence Around Pricing.”  It can help you see how a center of excellence is different than a “command-and-control” model, and it offers a lot of advice for becoming a knowledge sharer instead of a knowledge hoarder.

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