When the sea is roiling and the waves are threatening to wash us away, a solid rock outcropping to hold onto is the most valuable real estate on the planet. Similarly, when the markets become erratic and business dynamics are changing rapidly, one of the most valuable things any pricing leader can do is be a reliable source of “calm confidence” that others can look to and lean on.
As we discuss in the Pricing Through Uncertainty webinar, turbulent market conditions will tend to create a lot of organizational anxiety and fear. And while these emotions are certainly understandable, they are not at all ideal for making sound decisions and dealing with the situation effectively.
That’s why it’s so important for pricing leaders to provide a sense of calm and project a level of confidence that the team can work through whatever comes up.
One of the many strategies we discuss in the webinar is about helping others adopt a more balanced and realistic view of the uncertainties, risks, and consequences. As human beings, our survival-based biological wiring will tend to magnify any perceived threats. As a result, we humans tend to overestimate the potential downsides and negative impacts associated with those threats.
Recognizing this aspect of human behavior, we can tackle the issue head on and prevent others from reacting to some wildly inaccurate or improbable worst-case scenario they’ve envisioned.
Be proactive about talking these things through with your team. Get the risks and threats…real and perceived…out on the table for discussion. Address the potential downsides and negative consequences in realistic terms. Discuss the odds and assess the likelihood of those things occurring. Acknowledge that something is bound to go wrong along the way and accept that even the best-laid plans will go sideways from time to time.
An open and honest discussion about the realities of the situation can go a long way toward fostering a much more productive mindset and perspective.
At this point, you might be wondering whether this type of discussion might work against that sense of “calm confidence” you’re trying to project. Won’t talking about potential risks and expected problems undermine the team’s confidence and exacerbate their anxieties? In fact, during the Q&A portion of the webinar, an attendee asked a question along the same lines:
“In the interest of exuding calm confidence, how frank should we be about the risks and uncertainties?”
Here’s the thing…
Everyone knows that there are risks and uncertainties. Everyone knows that there will be problems, downsides, negative impacts, and unintended consequences. And while they may blow all of these things way out of proportion, everyone knows they are there and pretending otherwise won’t change that.
It’s a bit counter-intuitive, but sugarcoating or ignoring these things is what will actually undermine others’ confidence. And leaving the magnitude of these things to others’ imaginations is what will actually exacerbate their anxieties.
On the other hand, people have much more confidence in pricing leaders who are upfront and frank about potential problems and downsides. And getting these things out in the open…where they can be put into proper perspective…can’t help but alleviate overblown anxieties and assuage unrealistic fears.
It’s not easy. And it’s not a lot of fun. But given the uncertainty in the global economy, it’s one thing every pricing leader should be doing right now.
Pricing Through Uncertainty
As pricing pros, we're expected to make weighty decisions with imperfect information. How do we "illuminate" the landscape a bit? What steps can we take to reduce the ambiguity, uncertainty, and risk?
How To Deal With Inflation
With all that's been happening over the last few years, inflation was bound to catch up with us. So what should we be doing differently to deal with the rapid inflation we're seeing on so many fronts?
How to Avoid Pricing Panic
How should you respond when something disruptive happens in your market? How do you avoid overreaction? How do you balance speedy action with smart action? And how do you prepare for the next disruption?
