A simple template to apply Roger Martin's strategic choice cascade to pricing

Sep 28

**Steven Forth** is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talent.

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Pricing strategy withers and fails if it is not connected to execution. Company archives are littered with statements of good intent on how pricing will be used to … well, be used to do whatever is the hot issue at the company at the time. Several years ago I was at the head office of a large company in Switzerland visiting with the Chief Marketing Officer. He gestured to a closed door and said “I have hundreds of millions of Euros of consulting projects in long PowerPoint decks, most of which cannot be implemented.” I am sure that there were many pricing studies and strategies included.

Download the template for the Strategic Choice Cascade for Pricing

Roger Martin has been studying this question for several decades and has helped companies like Procter and Gamble or Lego reinvent themselves and connect their strategy to execution. The framework he uses for this is the strategic choice cascade. As this was popularized in the book Playing to Win: How Strategy Really Works, which he co-authored with P&G CEO A.G. Lafley, these are sometimes referred to as ‘playing to win choices.’

The classic strategic choice cascade looks like this.

Ibbaka Value & Pricing Blog - Strategic Choice Cascade

It is well-tested and has been applied in many different contexts. I even use it to plan my work and to help my children put their life choices in context.

This is too general for pricing strategy, though. We need to narrow our focus to the key choices that matter in pricing and then connect strategy to execution. For this purpose, we have created our version of the cascade that we use in pricing work.

Everyone responsible for pricing strategy should have a strategic choice cascade that they can share with stakeholders. In our work, we have found that this

Gets leadership teams to alignment
Reduces the frequency of incompatible pricing goals (‘we are going to drive a premium pricing strategy and win sales by discounting’)
Clarifies that pricing choices are made in the context of the market segmentation and value creation strategy (value then price then cost)
Reinforces the importance of having the right capabilities in place
Puts decisions on systems in context (the right system depends on all of the other choices, do not lead with systems)

To make it easier for you to use the Strategic Choice Cascade for Pricing, we have created a simple template that provides a guide to making these choices and a place to gather your choices and the metrics you will use to measure them.