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

Ibbaka has recently shared a template for implementing Roger Martin’s Strategic Choice Cascade. We have customized the strategic choice cascade for pricing and for talent.

Download the Strategic Price Cascade for Pricing

Download the Strategic Price Cascade for Talent

Ibbaka Value & Pricing Blog - Strategic Choice Cascade

As more of our community have been downloading these tools, people have asked us for examples of what a completed template would look like. It is hard for us to share case studies from other companies as pricing is strategic and very few people are willing to share their strategic choices in this area.

So we have volunteered one of our own businesses, Ibbaka Talent as a case study for how to use the strategic choice cascade for pricing.

The goal here is to give you an understanding of the thought process behind making these strategic choices, the kinds of pricing decisions they inform, and how pricing choices align with the larger strategy.

As you work through this case study, you will notice that many of the questions turn on value.

Who is getting value?
How do users create value for other users?
How does pricing work to encourage this value creation?
What should be priced? (Not everything that can be priced should be priced)
How can price be connected to value

The answers to these questions flow through the strategic choice cascade.

Pricing strategy lives within the overall strategy so before we look through the strategic choice cascade for Ibbaka Talent we need to provide a bit of context.

Ibbaka’s mission is to help individuals and organizations get from potential to growth. To do this we combine strategic work that helps our customers understand their strategic differentiation, how to segment their market, what customers to target and how to design pricing. We back this up by providing a skill and competency management platform that connects strategy to the skills needed for execution.

Ibbaka Talent is a platform. That means it is connecting several different communities (or markets) and that these connections should create value for all. Before we walk through the strategic choice cascade for Ibbaka Talent Platform pricing, we have to understand how the different parts of its market interact.

Ibbaka Talent Markets

There are basically three sides to the Ibbaka Talent market.

Individuals

Who want to understand their own skills and potential, represent these to other people, interact with other people around their skills, find jobs, roles and teams appropriate to their skills, find people with complementary skills to work with and to prepare for themselves for the future of work.

Organizations

Who want to be able to find people with the skills they need to build effective teams, carry out succession planning, prepare for the future, find skill gaps, target training investments, and so on.

Competency model publishers

Who want to share their competency models in order to help build skilled workforces, communicate their vision for the future of work, support certification programs and generally lend order to the complex world where skills, work and training connect.

Ibbaka has its own goals for each of these groups. As you work through your own strategic choice cascade you will need to make sure that you address the key stakeholders and decision makers in your own markets.

We want to grow a community of people committed to developing their skills and sharing their skill profiles.
We want to help provide meaningful competency models to individuals and organizations (in other words, we are primarily interested in competency model publishers for what they can do to help the other two groups).
We want to create value for organizations by ensuring that they have the skills they need to execute on their strategy today and in the future. We monetize the entire market primarily through subscriptions paid by organizations.

Ibbaka Value & Pricing Blog - Competency Model

Of course, there are interesting interactions between each of these groups. The obvious one is between individuals and organizations. Individuals want jobs and to get roles on teams. Both sides want to get the right people into the roles and onto the teams that optimize performance.

Most organizations we have worked with want to take existing competency models and modify them to accentuate their strategic differentiation and align with their strategies. These days many organizations are also working hard to prepare for the future. They have one model for their current needs and one or more competency model for their future needs.

Individuals also want access to competency models. Most people just want to see the skills needed for roles and to find the roles they are best suited for. Other people compose an individual competency model to organize their understanding of their skills, how they use them, and the direction in which they want to develop.

Competency model publishers have several different motivations. Some are responsible for a profession and accreditation or certification. These groups publish competency models (under various different names, from ‘body of knowledge’ to ‘accreditation criteria’) so that professionals can know what is expected of them and educational and training organizations can build learning resources. Educational and training providers also publish their own competency models to help connect their offerings to competencies.

Organizations, especially those engaged in category creation, also publish competency models. Most new categories, customer success is a recent example, demand new skills and publishing a competency model for a new category is a powerful way to show thought leadership.

Many organizations have their own internal competency models. Skills are a critical part of strategic differentiation. Competency models are how organizations shape and communicate information about skills to their people and the lens they use to look for skill gaps or to build skill-based teams. These internal competency models are sometimes based on external models, provided by publishers, but these are then customized to fit the organization’s culture, values, operating model and strategy.

The Ibbaka Talent Strategic Choice Cascade for Pricing

With that background, let’s look at Ibbaka Talent’s strategic choice cascade for its pricing.

The strategic choice cascade organizes choices in a cascade from winning aspirations through where to play, how to win, capabilities and systems.

At Ibbaka we have customized these for pricing strategy and advocate having metrics at each level of the model.

Ibbaka’s strategic choices for the pricing of our Talent Platform are summarized in the below table.

Ibbaka’s Offers (Packaging) and Pricing

Pricing and packaging go hand in hand, so as part of defining our pricing we had to design our packages, or offers to the market. There need to be packages and pricing for each part of the market. Ibbaka has bundled its current functionality into two packages, Skills Profiles and Competency Modeling. These can be purchased and used independently (though everyone using the Competency Modelling Environment automatically gets an Individual Skill Profile).

The pricing tables below (in US$) are current as of November 2020 but are of course subject to change.

Note that Individuals can build and share their skill profiles for no charge. Anyone can have a skill profile and if they build a skill profile for working at one organization and then leave their skill profile can come along with them. The skill profile is the property of the individual. Why offer something for free?

One reason is simply that people should own data about themselves and this should be supported.

Allowing individuals to have free profiles also helps to build the skill graph, which is a central strategic goal for Ibbaka.

Free individual profiles also support the gig economy and the need of Ibbaka’s organizational customers to leverage their extended talent networks.

When free offers also create value for other parts of the market they are generally a good idea.

For Ibbaka Talent, pricing kicks in when an organization wants to aggregate data across individuals or wants to impose security controls on what information gets shared outside the organization. These information and security value drivers are not relevant to individuals. It is these value drivers that organizations are paying for.

Just as the Skill Profile is free for individuals, Ibbaka allows any organization to publish a competency model so long as it does so under a Creative Commons Attribution Noncommercial Share Alike License. (This is the same license that Ibbaka uses to distribute its own tools.) The more competency models there are available the more value Ibbaka can deliver to Individuals and Organizations. Many competency model publishers are not-for-profit organizations that create and distribute competency models to serve the general interest. Ibbaka wants to support that.

Ibbaka Talent uses a ‘per user’ model to price Skill Profiles. Why? Per user models make sense when each user has their own data and a unique view of that data. When this is true the value metric and pricing metric are aligned.

For competency models we choose the simple pricing metric of the number of competency models. We considered getting fancy here. A competency model has most value when connected to other things: learning resources, jobs, applicants and of course skill profiles. We could have used a pricing metric based on connections. But good pricing is predictable, and we don’t yet have enough data to predict how many connections an organization might make to a competency model, so we kept things simple (which is usually the best default when designing pricing).

That does not mean we are ignoring connections. Competency Models and Skill Profiles are both more valuable when used together. See Assessing Skills as Part of Continuous Performance Management as an example of the power of this approach. Most of our customers will buy both Skill Profiles and Competency Models.

Ibbaka’s Pricing Model as a System

Pricing design is a form of systems design. All the different parts of the system and how they interact need to be considered.

That is the approach we take when designing the Ibbaka Talent pricing model. The things that are free (Individual Skill Profiles and Open Competency Models) are valuable in their own right and add value to the other parts of the system. The pricing is meant to make it easy to buy what you need and then scale up. An organization can start with Skill Profiles or Competency Models or both. A Publisher does not have to pay to publish an Open Competency Model. It can start there and then move to a more controlled approach. Ibbaka plans to provide a full publishing system for competency models, curriculums, bodies of knowledge and then to map across them.

Using the Strategic Choice Cascade for Pricing

Pricing choices are often made out of context of larger strategy. This is a fatal mistake. Pricing is central to strategy and it reflects (or needs to reflect) all the other aspects of the company: positioning, differentiation, value to customer (V2C) and its own values.

Using the Strategic Choice Cascade for Pricing is a compelling way to connect pricing choices to other choices and to put them into context.

Try our template as a guide and let us know what you think.