Culture and Strategic Initiatives

All too often-competitive strategies unravel because of political or cultural forces within the organization. Firms know what to do, but lack the will to do it. The greatest advantage of market-oriented firms is in their ability to implement strategy. Implementation success in these firms derives directly from the core philosophy of customer value creation. It is the cornerstone of culture, structure and systems. Customer value is created throughout the firm, and each employee and operating unit understands their role in the value equation. As a result, employees are more satisfied and loyal to the firm. They tend to be entrepreneurial and organize themselves organically.

In order to better assess and then improve an organization's cultural disposition to best practices, MLG 's proprietary PriceMaster Audit™, in the 'culture section', measures the degree to which the firm has processes, systems or programs in place that support best practice pricing behaviors. These include management development programs related to pricing, sales force development and sales force performance measurement.

Businesses lack effective management development programs in pricing. On the other hand, most firms work to develop the capabilities of their sales force in understanding the pricing flexibility they have and how to target high price/high margin accounts.
Most firms do not measure pricing performance either at the SBU level or at the region/district level.
With the focus on sales force development, but a lack of management development in pricing, pricing is effectively dismissed as a functional, tactical activity.
With the strong commitment of top management and the focus on sales force, middle management may be excluded from the pricing process. In this case, the strategic elements of pricing practice are missing because middle management generally develops marketing strategies.

In conclusion, it is absolutely clear that without adequate performance measures or incentives to mold the culture, the organization is unlikely to achieve pricing excellence.