The great crew change and the impact on teams and tech. – by Garth Hoff
How long does it take to make an employee productive? How long does it take to become a professional? The CEO of PetroSkills has noted, “it takes 3 to 8 years for a company to turn a new employee into a petroleum professional.” We can argue over the timeframe per industry and job function, but it’s well understood that becoming a professional in any skilled area including pricing can take years.
The time required to make a new employee productive is important because there are many factors that speed up the productivity curve. It’s important to choose technologies (pricing software) that minimize ramp-up time and, more importantly, that reduce the risk of having all of your pricing strategy and operations knowledge in a spreadsheet, on a laptop, or inside the mind of your individual pricing team members.
Boomers are retiring, new grads are unready, & mid-career professionals are in short supply
Another significant risk factor for many companies today is succession planning. This is especially true when looking at strategic functions like pricing and sales support. The great crew change illustrates this risk.
What is the Great Crew Change, and how does this impact my pricing team? The Great Crew Change is actually two separate events. The first is the ongoing retirement of the baby boomer generation, and the second is the ongoing impact of successive economic downturns during the 1980’s into the 2000’s.
Energy Sector Crew Change Challenges
For example, 25% of engineers and geologists left the energy market between 1984 and 1999. This trend has reoccurred again more recently as the result of the 2014 energy bust. On the other side of the equation, a recent study by UCLA found that from 1997 to 2005 the proportion of college 1st year students planning to enroll in STEM fields declined to a low of 20.1%.
In short, there is a gap between qualified technical professionals and new graduates/young experienced professionals in the same field. In particular there tends to be a shortage of mid-career experience managers in a variety of technical fields. In 2013 Schlumberger predicted they could face a shortage of 15,000 experienced engineers, and these same predictions are being made across industries and areas of professional expertise.
The point of these two examples, onboarding and the great crew change, is that there is inherit business risk when employees hold a disproportionately large amount of “know-how” in their brain and on their laptop in the form of MS Excel files. Interruptions in transferring pricing knowledge can lead to missed opportunities for your business and a long-term challenge to your management team.
Taking this one step further, any company that is constrained by their pricing tools can be equally frustrated. When new employees are expecting powerful but easy to use tools, and their experience when entering the company does not match the needs on the company on day one, the ability to rely on pricing systems to provide continuity and flexibility for growth is critical.
Pricing fast requires flexible tools with no walls
In the case of one of our customers, Price f(x) is in process of removing constraints. When this company hit a wall with their first generation pricing solution, Price f(x) was able to offer a solution. The focus of this implementation is to help achieve a centralized global pricing process with refined pricing models and sales enablement for more profitable negotiated outcomes. The Price f(x) advantage has been in our ability to quickly deploy a set of tools that complement one another while providing for the ability to change over time.
Think of Price f(x) as a great family SUV, with a Dodge 707 Hellcat engine and rocket boosters, and a swiss army knife bolted on the roof. In short… really fast, really flexible, and really effective in changing the game for you and your pricing team.
Companies in the manufacturing and distribution industries need to take care to cultivate pricing expertise in their organization. In addition, companies need to understand that ramping people up to becoming effective pricing managers takes time.
Most importantly, companies need to take care to select technologies that are not only powerful but also easy to use (minimal ramp up time) and that allow for strategy to change over time.
In pricing, like in life, you never want to hit a wall (technology based or otherwise). For the pricing software world, this wall is a technology that becomes too expensive and too slow to change as business needs change. As the saying goes, “speed has never killed anyone. Suddenly becoming stationary, that’s what gets you.” Price f(x) keeps you fast, flexible, and first in the market.