John Sviokla

In my experience people spend too little time thinking about their pricing model. Great innovations in pricing models can radically improve adoption. When the Xerox machine was introduced, it cost about $50,000 and took tons of maintenance. The dominant pricing model in the market was to sell office equipment as a capital expense. Instead, Xerox invented the portable counter and anyone who wanted copies paid per page copied — making adoption easy. Likewise, Amazon Prime means many people go to Amazon because the cost of “trial” is “free” — because I already paid for it, meaning many more transactions end up at Amazon. Think about the behavior you want to incentivize in your customer when thinking about your pricing model.

The key questions to answer are: what purpose does inventory play in our value proposition, and how does it scale with revenue growth? For example. WW Grainger the $15+B industrial distributor's value proposition is variety, convenience, and availability. They must have the proper inventory to meet their brand promise. However, if they have too much, given the fact they stock over 250,000 SKUs they can crater their economics by a bloated balance sheet. Consequently, they have a very tight inventory control system based on SAP so they can have the very least amount of inventory while still keeping their brand promise of convenience.

I think the most important body language tip is to read the client, read the team, read the room. Body language is like regular language, it sits within a context of the social interaction that is already occurring. I think of body language like dancing -- make it empathetic, rhythmic and where relevant dramatic. For example, when I am teaching in an amphitheater style classroom like we had at HBS, I used my body to confront -- coming toward someone, engage -- standing to their side and facilitating their conversation with others, or to their side/back -- supporting them as they spoke to the crowd. Empathy and timing are the watchwords.

The most important skill is learning to say "no" without angering the person who wants something done. Few people teach us how to say no. My own technique is to put the "no" in the greater context of what we are trying to get done together -- and show how saying yes to their need will slow or hurt the overall project. Moreover, I usually go the next level of analysis on what it would mean if I said yes, so they can see that I did not say no lightly but had thought it through.

Use evidence that best suits the cognitive style of your listener. In the book People's Styles at Work the authors note four cognitive types: Analyticals, Drivers, Expressives and Amiables. Analyticals find data and analysis convincing, expressives find the uniqueness of the solution motivating, Drivers tend to look for the practical implementation of the ideas and Amiables like to know that "everyone else does it this way". So, as much as possible try to include evidence for all four types in your audience preparation. Especially ask yourself if the leader is a driver, expressive, etc.

I think there’s two types of improvement: incremental and radical. Incremental is using data, transactions, repetitions etc to refine the model. Radical is a structural improvement to the model as when car insurers added credit score to driving records. You need both.