17 August 2004
How to increase your prices by recognising the human resistsnce to change, made easier if you understand Bateson's Learning Levels model..
“incremental change used to be the standard UK option ..step changes are now the global way” from Ken Lewis’s excellent book “How to Transform your Company and Enjoy it”.
Humans seem to have real trouble dealing with change. We visit it in the same old ways with similar questions and wonder why we keep on getting the same answers. This seems to be rooted in the UK’s Victorian ethic of having to be seen to work hard rather than valuing sitting back and looking for a smarter solution from a different perspective.
“if survival is about the ability to change according to the environment what changes are you making personally?”*
Gregory Bateson created a superb model of how to understand and implement effective change, which relates to something Einstein said “you cannot resolve a problem at the same level that it started at”.
When coaching, I see the penny drop when Bateson’s six levels of change are explained ..at the bottom you have the Environment (where the challenge often is), then going up Behaviour (how you deal with it), then Knowledge (what you need to know to deal with it), Attitude and Values (a positive approach to finding a solution), then Belief (a fundamental conviction that a solution can be found)and finally at the top Spirit (the motivation and leadership that is adamant a solution will be found). The challenge is to deal with change at a level above the one that’s confronting you.
This invariably leads to the top, where directors and owners must be of the same mind and spirit to drive the company culture…if change must come from the top what are you doing to embrace it with passion ?”
So if you want to use this model to understand the difficulty with increasing prices, this is what is going on….
Potentially you are in an Environment and you want to increase the price of your product and you are frustrated by this resistance. For this discussion, we need to assume that the market will bear an increase in prices for your product and you have proof of this.
Logically therefore all you have to do is to change everybody's Behaviour and increase the prices but there is internal resistance. You then suddenly discover that it is not sufficient to just want to increase the prices, you have to prove to people that it is okay to increase prices and that you will not lose sales. Suddenly, you discover that people's opinion of the value of your product is not the same and you realise that in order to change the other people’s behaviour you need to do something else.
So unknowingly, you go to the next level and you provide some additional Knowledge and surprisingly it still does not make any difference to the people involved:-
- the image you want to present to the market is different to the one that you are able to, as a result of your price
- the clients you are attracting at your present prices have a different approach to money and value than the ones you really want to attract
- proves that your competitors are charging far more than you
- having done all the costs, bearing in mind production time, administration, overheads and you prove that the margins, you are at present making mean that you are not as profitable as you would like to be and you are always scrambling for cash flow
Some people stop at this level and get very upset when they don’t get agreement, start shouting, banging the table or even throw all of their toys out of their pram and go into a huff often saying most unfortunate things about people not understanding….
Others go to the next level, and begin to evaluate and discover something about the Values and Attitudes that are behind the resistance to a price increase. They discover that the people concerned have a completely different viewpoint of £, value, cost, view of life, etc. for everything clothes, hotels, cars, furniture, houses, charity, etc. As a result, they discover that they need to change people's perception of their value and view of the world. This can take a lot of time and one can meet a lot of resistance.
Some people then discover that even if you have similar values and opinions about money, and materialistic things in life, some people are still unable to agree to a price rise, because they haven't got enough belief, or bottle, or courage, or confidence in pushing through a price rise. And this is basically the Belief level above Values and Attitudes.
Then finally even if people have the Belief they do not have the Core motivation, or the spirit or the drive to actually push a price increase through.
So where are you and your team on this Hierarchy of Change and more importantly what are you going to do about changing it all, to reach concensus?
This model can be used in any form of change required in any area.
©William Barron
Creating Insight
Levels of Change
First 1 Last