How can manufacturers successfully implement price increases, and handle other issues related to monetization? Mårten Hedberg from CPG Europe came forward with a solution, a dedicated factotum to lead the charge.
This initiative leader would be responsible for pushing change forward while acting as the glue that keeps all the departments together. It’s a tall order, but when handled correctly, it can be the driving force toward pricing excellence in your business.
Prerequisites to Succeed
As wonderful as it would be to say that a skilled factotum would solve all your monetization problems, that’s not necessarily true. The same process can be put in place at one company and lead to great success, but fall short for another company.
There are many reasons for this, but if you want the best shot at success for your factotum, you’ll want to ensure they have access to the following things.
- Support From Top Management – The C-Suite needs to be entirely on board with your pricing initiatives. They should set top-down targets, and take the time to talk about it.
- PVMC Data – Your team needs access to and understanding of price, volume, mix, and cost. The more specific this data gets, the more control your team will have over the solutions.
Having these factors will not guarantee success, but it will make success a lot more achievable.
What Is a Factotum?
The word factotum comes from the Latin phrase for “do all,” which is exactly what this employee needs to do. For your change to take root, it will need someone to be its catalyst. This person should be cross-functional, and cross-organizational, and see the full picture.
Because pricing affects every single part of a business, this individual should be in contact with and have an understanding of the rest of your company. They need to break down the silos in the information that can pop up within large companies.
The Ideal Factotum
The factotum for a large-scale pricing overhaul needs to operate as a hybrid position. The individual needs to be responsible for
- Understanding Data Streams – They must see the forest through the trees and have a full understanding of what each shift will accomplish across departments
- Initiating Change – There is a huge component of creative problem-solving and leadership abilities, as they will need to drive the shift.
This hybrid nature makes the role extremely difficult to fill. However, someone with the right prerequisites and an understanding of the role will be on their way to getting the monetization structure of your company overhauled.
There are several characteristics of the factotum approach that you should bake into the position and initiative from the start.
Hedberg admitted, “This is probably a very Swedish way of doing change management,” but the results are clear in every culture and market. This approach takes two different paths that may seem mutually exclusive and blends them to make a smooth shift in culture.
The “hard” component takes the top-down targets from upper management and treats them as the unmovable goal. This keeps the entire process on track and prevents it from taking too long.
On the other hand, the “soft” approach involves talking with people and finding out what they need from the change. Managing employee expectations, explaining how changes will positively affect them, and being willing to listen are all keys to a successful initiative.
Lead From Behind
While the factotum is the one who knows how to achieve the price impact and the steps that need to be accomplished, it’s still crucial that they follow the energy of the company and empower the existing teams to innovate.
Leading from Behind is quite similar to the “soft-hard” approach in that it requires the factotum to engage fully with the organic innovation process while having the end goal in mind.
It originated from Nelson Mandela’s autobiography, where he stated that a good leader “stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.”
Listen, Listen, Listen, Then Act Together
Many companies have staff who have been in their positions for 20 years or more, and that experience brings a certain level of wisdom and understanding. If you give these people space to talk about their job, they will.
A successful factotum will be able to take in all this information and guide it toward the end goal of monetization and commercial excellence. By listening and putting the company’s goals into perspective, they can create a collaborative environment where the team feels heard and excited about the change.
Move Risks to the C-Level
Any time that a price increase or monetization change has happened, there has been a fear from sales teams about losing customers. More and more, inflation has made price increases necessary, and yet they are dreaded by much of the team for this exact reason.
To make this change feasible, the risk of volume loss needs to be shifted onto the C-suite. When the factotum acknowledges the risks of volume, they need to have the support of top management behind them to elicit the trust of the teams.
This allows employees to focus on the real discussions and preparations that need to happen, rather than getting caught up in fear.
Trigger a Competitive Spirit
Traditionally, people in sales will be quite competitive. It’s an inevitable part of the job. If the factotum can leverage the PVMC data to boost that edge. This is where a certain amount of gamification can come into play.
Get people excited to grow their volume and prices as they see their name rise on the leaderboards. Making the information easy to understand and track will keep the sales team motivated throughout the week, and using a mix of intrinsic motivation and external validation will move things forward long term.
Know a Little About a Lot
A strong factotum will be able to strike up a conversation and have some level of understanding with every single team in an organization. From customer service to IT, they should have something to say about each piece of the puzzle.
This skill comes from listening and having a hunger for knowledge. When you show an interest and understanding, there is a sense of trust that is garnered between the factotum and the people they are working with. There’s no need to be an expert, just know enough to keep a conversation going.
The solution for monetization woes isn’t going to be simple, but having someone in place who’s shepherding the change can make a huge difference. With a dedication to monetization excellence, and the patience to listen and lead from behind, a factotum can shift your company’s entire culture around price changes.
If you want to learn more about the best ways to drive change in your manufacturing business, don’t forget to explore the rest of Copperberg’s extensive resources. With their knowledge and community behind you, there’s not a storm you can’t weather.