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    May 20, 2024

    Bridging the Gap: Aligning Agile Maturity with Advanced Pricing Strategies

    In recent years, many organizations have embraced the Scaled Agile Framework (SAFe®) to streamline operations, enhance collaboration, and accelerate value delivery. However, a persistent challenge has emerged: the disconnect between the maturing value creation activities fostered by agile methodologies and the value capture mechanisms essential for successful go-to-market (GTM) strategies.

    The Legacy of Pricing Practices

    Traditionally, pricing strategies are weighed down by legacy practices that are often rigid and slow to adapt. These outdated methods fail to keep pace with dynamic market conditions and customer expectations, creating a misalignment that hampers sustainable profitability.

    Upstream and Downstream Disconnects

    The root of this disconnect lies in a misalignment between strategy, product development, and the value exchange with customers. Upstream, strategic decisions and product development initiatives often operate in silos, with pricing and sales considerations coming into play too late in the process. Downstream processes can be cumbersome and resistant to the changes required by advanced pricing models, stifling the ability to implement dynamic pricing strategies.

    The Collision of Worlds

    This is where my professional world collided with that of Applied Frameworks. By integrating systems thinking into the profit streams™ concept, we connect to a more straightforward path to align value creation with value capture. Profit Streams focus not only on the activities that create value but also on those that capture it effectively. This holistic view ensures that pricing strategies are embedded into the entire product lifecycle, from conception to market delivery.

    Why I Joined the Applied Frameworks Team

    1. Systems Thinking: Applied Frameworks emphasizes understanding the interconnectedness of various components within an organization. This approach harmonizes strategy, product development, pricing, and change management to support agile principles.
    2. The Canvas: Applied Frameworks developed the Profit Stream™canvas that integrates agile practices with advanced pricing strategies. This visual tool maps the journey from value creation to value capture, highlighting key touchpoints and decision points.
    3. Community and Family First: Applied Frameworks prioritizes positively contributing to the community, conveniently defined as 'world.' This aligns with my passion for contributing to the greater good through business practices. Additionally, the firm’s value of putting family first and believing in operating at a sustainable pace indefinitely - resonated deeply with me. Balancing these values is always challenging, but it ultimately reaffirmed my decision to join a company that supports community impact and personal well-being.
    4. Collaboration Facilitation: The Applied Frameworks approach facilitates collaboration across departments, ensuring that pricing is not an afterthought but a core component of the product development process.
    5. Dynamic Adaptation: The firm’s commitment to dynamic adaptation aligns with my passion for evolving pricing models to meet market demands and customer expectations.
    6. Value Integration: Applied Frameworks strongly focuses on embedding pricing strategies into the entire product lifecycle, ensuring seamless value capture from conception to market delivery.

    Leveraging the Opportunity

    One of the challenges for companies that have adopted SAFe® is that it is often led by IT or software development teams. Business functions are typically last to join the fold because they see SAFe as a technical tactical development framework. However, Scaled Agile is expanding the value of SAFe to include business teams so that the packaging and pricing of software, which often supports hardware solutions, is seen as the next big goal to ensuring that the effective Agile ARTs and Teams are not only building in quality and meeting commitments to the business but are also building the correct set of features that the market needs and wants to pay for. This holistic approach uses sales, support, marketing, finance, and C-suite leadership to create new packaging and pricing options. This integrated effort can help organizations reach new markets, increasing revenue and profitability. By involving all business functions in the process, companies can ensure that their agile practices drive value creation and capture, leading to sustainable growth and competitive advantage.

    I am thrilled to join the talented team at Applied Frameworks, led by CEO Jason Tanner and CINO Luke Hohmann.  I can’t wait to help clients understand the intricacies of pricing their products and software-enabled solutions. Schedule time with me to learn more.

    Additional information:  Software Profit Streams, Customer Benefit Analysis, Snapshot Assessment, The Profit Stream Canvas.

    Tag(s): Profit , Agile , Pricing

    Kevin McCabe

    Kevin McCabe is a pioneering figure in the field of pricing consultancy, renowned for their innovative approach and unwavering commitment to driving profitability. With a rich background in fintech, manufacturing and services and extensive experience across diverse industry verticals. Kevin is a Sloan Fellow (London Business School) and has an MSc from The University of London (his Dad’s alma mater). Growing up in Canada, Kevin has traveled the world and is settled in Boston with his wife, MaryAnn, and two college-aged kids. Plus, the dog that led him to Luke.