August 27, 2025 • 38 mins
In this episode of Let’s Talk Pricing, PPS President Kevin Mitchell sits down with Ron Baker and Ed Kless, co-founders of THRESHOLD and two of the most influential voices on value, transformation, and enterprise.
Together, they explore the big ideas behind their latest collaborative work, A Revelation for the Transformation Economy—including why they believe we’re entering a new economic era, how professionals must evolve from technicians to guides, and what it means to design businesses around transformation rather than transactions.
Key topics include:
Why entrepreneurs must lead the way into the Transformation Economy
Rethinking burnout as moral injury—not exhaustion
The limits of fee-for-service models and what healthier structures look like
Why work-life “balance” is a false idol, and what coherence offers instead
How to use models to reveal your values and redefine your business purpose
📖 Dive deeper: Read the full thought piece, A Revelation for the Transformation Economy, at thresholdnow.com/revelation
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You're listening to Let's Talk Pricing, your connection to the
voices, stories, and strategies shaping the pricing world.
Each episode, we go beyond theory into the practical,
timely conversations that help you lead with confidence and
drive results. Let's start the show.
Very good day everyone, and welcome to the Let's Talk
(00:21):
Pricing podcast. This is a podcast where we
explore the people, the practices, the possibilities
that are shaping the future of pricing, revenue management and
related fields. My name is Kevin Mitchell from
Professional Pricing Society. I'm very excited to be with you
today. And today we're going to do
(00:42):
things a little bit different. First of all, join not by one
guest like normal, but today we have two very, very special
guest. I'll introduce Mr. Ed Class and
Mr. Ron Baker in one second. But today I'm really excited
because we're going to be talking about unpacking a
special theory. So our guest today, Ed Quest and
(01:07):
Ron Baker have just written a very interesting, I don't even
want to say article. It's really kind of a terrific
thought piece. It's entitled A Revelation for
the Transformation Economy. And really what we're going to
do today is we're going to discuss some of their very
unique, very interesting ideas about how business is changing.
(01:29):
And we're going to get some great insights from 2 very
knowledgeable gentlemen here. So today, I'm going to welcome,
first of all, Mr. Ron Baker. A lot of us have known Ron.
If you've been to PPS conferences, you may have seen
both Ron Baker and Ed Quest doing workshops, doing
presentations, doing panels. So we're always happy to welcome
(01:51):
back. A lot of us know Ron and Ed from
the Soul of Enterprise podcast. He has been pricing and Time's
up. He has educated more than
450,000 professionals around theglobe and he not only is a proud
faculty member of Professional Pricing Society with some of our
(02:13):
online courses and some of our in person workshops as well.
But as a fun fact, he is a Disney University alum.
And also joining us today is Mr.Ed Kless.
Ed works with professional leaders.
He drives transformative change.He has served as Sages senior
director of partner development and strategy, and he has hosted
(02:37):
the Sage Thought Leadership podcast.
And like Ron, he is a passionateadvocate for entrepreneurship,
for innovation and for elevatingthe human experience through
business. So Ed and Ron are the Co
founders of Threshold and we aregoing to talk a little bit about
(02:57):
their new work, talk about a revelation for the
transformation economy and some other fun things today.
But Ron and Ed, always good to see you and so happy that you're
with us here today. Thank you so much, Kevin.
PPS has been transferred transformational for me, so I
want to thank you and your father.
(03:18):
Yes, we, we, we love talking about it and we, we Love
Actually hyping the fact that weare faculty members of PPS.
We talk about it all the time. Oh.
Hey, you're very, very proud faculty members.
We are in your debt and of course, PPS members from across
the globe have access to your coast work, to your course,
course work and your learnings as well there.
(03:40):
So appreciate that. And Ron, thank you so much.
Next time I see my father, Eric,I see him typically once or
twice a week at least. I'll make sure to pass that
along to him. But thank you.
So beautiful. So today we are here to talk
about your recent collaborative effort.
So your project is entitled Threshold, a Revelation for the
(04:04):
Transformation Economy. So in a few words, tell us a
little bit about that and a little bit about your work.
Wow, Eric, Kevin, this is a new economic era that we're
entering, you know, economic eras.
Are. Named and defined by their.
Output. So.
(04:26):
You could say we started. Hunter gatherer society and
moved into the agricultural economy, which was where.
We basically extracted. And grew commodities, wheat,
corn maze, that type of thing. And then of course, we you know
that. That set the stage for the
agricultural. Economy And then sometime in the
1700s, late 18 or early 1800s, we started to move into the
(04:49):
industrial economy where we produce goods at a mass scale,
economies of scale, mass production of, you know, home
appliances and cars and things like that.
And that, of course, is the industrial revolution.
And then in the 1920s and most people think it was the 60s and
70s. 80s but it was actually. The 20s when the Economist
started to notice that big chunkof the labor force in the
(05:12):
fastest growing segment was people that weren't in
production of things. They were providing services in
real time on demand. So that was the beginning of the
service economy. And then in 1999 a book came out
called The Experience Economy byJoseph B Joseph Pine the 2nd and
James Gilmore and in that. Book they laid out this.
(05:34):
Progression, they said we went from.
Commodities to goods to services.
And now in the 80s and 90s, we entered the experience economy.
So where products and services exist outside of us?
Experiences we all internalize so we go to Disneyland with our
family and we all have a different experience, but we're
(05:54):
doing it together so we're. Carrying it, of course, but
it's. Affecting us in different ways
individually and in this book in1999, and I think you can
appreciate being a big reader ofbusiness books.
To cite a book that's. 26 years old.
Is a big deal. It's still.
Is well, I can't believe. These guys saw this that far
out, but they said, well, there's.
(06:16):
Even one level higher than experience economy, but they
didn't have any examples in the book and that was the
transformation economy. And that's when you guide an
individual or organization from where they are to some desired
future state. So it's kind of a from to type
situation and you guide them andthey're.
So they're the hero. Of the journey, but it changes
(06:38):
them, changes their identity. So in the transformation
economy. The the the.
Customer is the product and that's what's so interesting
about it. Whereas goods and services say.
Look at what we can do, the transformation economy says.
Look who you can become. Yeah, that's very interesting.
(06:59):
And I like how you lay out the history of how we have gone
through several different eras there.
And 1999, Ron, as you mentioned it, we say it all the time.
It doesn't sound like that was along time ago, but that's eight
years before the smartphone. I mean, that was a different era
where if you had e-mail and things like that in the 90s, you
(07:22):
were probably kind of leading edge there for a while.
I mean, that was a long, long time ago.
So I'm glad to hear that some ofthe insights from back then and
that there were people who had the foresight in order to see
what's kind of coming next. And also it's very interesting
how in this progression now thatthe individual, the consumer
(07:43):
essentially is the product, it'sa lot more specialized now.
So I think that's a very interesting way of thinking
about things. And of course, I'm a big fan of
your work and a big fan of your writing as well.
So with that, there is a bold claim here.
We are really looking at a new economic era.
(08:04):
So, Ed, maybe we'll ask you about this one.
Sir, how would you describe the changes that make the economy
that we're in now according to your work, the transformation
economy, very distinct from the other eras that came before,
where we are right now? Well, the, the real key to the
(08:25):
progression of economic value isthe a very fancy word called the
subsumation that that the all ofthe errors previous to the error
that we're carrying it are, are are in are subsumed by the prior
error. So just to take a very basic
example, when you extract commodities such as eggs and
wheat and sugar, you're and thenyou make a cake and you're
(08:46):
creating a good notice that whenyou buy the cake, you don't buy
three eggs, 1 LB of flour, 1 LB of of of sugar.
You buy a cake. So the commodities are subsumed
in the prior level. When a cake is then written on
by a employee of the grocery store writing happy birthday,
providing the service you don't get here's the cake and here is
(09:08):
the writing. There's a separate bill for the
writing. Happy birthday on it right on
the way down. So it subsumes the prior era.
What is so interesting, Kevin and I would appreciate your
thoughts on this too, because having an organization that that
maybe in in part of this, if youreally think about it, if we
want to subsume the the economy of the experience economy, we
(09:31):
would sell experiences and all of the previous things would be
subsumed in that. So for example, say PPS should
have an offering where you're the experiences are included.
You just let us know if you're coming to our experiences.
So we sell you the entirety of the experience and everything is
(09:51):
subsumed into that. So rather than having to say we
provide this membership and you have to buy this as an extra add
on. No, no, no, no.
It's the entirety of the experience of being apps member,
right? And we think that the next level
here is this idea of transformation, which will
subsume even experiences. Now transformations will include
(10:12):
experiences, perhaps services and even commodities, but they
will all be priorly subsumed in those.
And that's really the key in this transformation economy and
all of the previous economies, but this notion of subsummation
and we find that that people really latch on to that idea.
We'll pause for a quick message.We're heading to Las Vegas this
(10:36):
October 21st through 24th for PPS Profitable Pricing's
preeminent conference. Four days of bold strategies,
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Connect with pricing leaders, sharpen your skills, and leave.
Ready to make an immediate impact?
(10:57):
Secure your spot and take advantage of early bird pricing
through September 19th now at pricingsociety.com/P PS:.
LV25 All right, let's get back to the show.
So in reading through your work,when we talk about a revelation
for the transformation economy, one of the statements that you
(11:19):
make is that entrepreneurs go first.
So, Ron, in your impression, what exactly does that mean?
Wow, entrepreneurs. I mean, without entrepreneurs
and economy is literally barren.And you know my my mentor,
George Gilder. Loves to say that wealth.
(11:39):
Equals knowledge. The caveman, after all, had the
same access to natural. Resources that we do.
The day the difference between his standard of living in ours
is the knowledge. That was brought to bear.
And so that kind of raises the question, if wealth is
knowledge, where does growth come from?
It growth in that knowledge and,and everything else, economic
(11:59):
growth and it comes from learning and learning is
essentially entrepreneur. And I'm not just talking about
book learning or academic learning.
I'm just I'm talking more about entrepreneurial.
Leaps of faith. And that's where we learn, even
if the business fails. And of course, as you know,
Kevin, I mean, Silicon Valley sits up, you know, the the
(12:20):
companies out there sit on a vast graveyard.
There's a lot more failure than success.
We only see the successes. But you know, growth comes from
learning, and it's those entrepreneurial endeavors.
So even if we fail financially, we learn something in the
process. Almost.
Every big. Businessman, Disney, Hilton,
(12:42):
Merit have failed and they learned incredible lessons from
it. So to me, it's the entrepreneur.
That gives before he gets its. Supply before you demand.
It's the. It's the logic of.
Capitalism, which is, you know, give and you will be given unto
and that the good fortune of others is also your own.
And we think those are the golden rules of enterprise and
(13:05):
entrepreneurship creates the futures that we all live in.
So we we kind of honor and Revere the entrepreneur because
unlike an artist. Who tries to portray?
The world in their image the entrepreneur has to take into
account. Other people, they have to be,
Other directed they have to. Be, in a sense, altruistic.
(13:26):
Because we believe that profit. Is actually an index of
altruism. It shows how well you're serving
others. That's very interesting.
And I know in reading your work that there is an awful lot about
altruism, about giving back, about giving and receiving, and
(13:47):
about the entrepreneurial efforts there as the impetus
really for moving a lot of things forward in a lot of
different ways. So definitely that's a big part
of what you talk about when you discuss the transformation
economy as well. So very much appreciated for
that. And another thing that you talk
(14:09):
about is you argue that professionals should evolve into
guides rather than staying beingvendors, being technicians, but
really taking their marketplaces, their customers by
the hand as part of that experience.
So why do you believe that the traditional technician role, as
(14:30):
some of us call it, no longer really serves as well in today's
economy? Well, first of all, I think that
we can still have technicians and technicians aren't in and of
themselves bad. We just believe that the, the
ultimate role of, of professionals in this new
economy is going to be that of guide.
And just to, to jump back to something that we talked a
little bit about earlier. I, I think there's a bad
(14:51):
connotation of the customer or consumer is the product and
there's a good connotation of it.
The, the bad connotation is, let's call it the Facebook model
where you, you're getting Facebook for quote free because
you are the product, right? They're, they're trying to sell
to you. They're trying to, to, to craft
ads especially for you. We don't mean that, that you,
(15:15):
you are the product in that sense, that the consumer is the
product in that sense. What we mean it is, is that it
is the, the role of the professional to guide the and
change the trajectory of the person, the individual or
organization with whom they're working.
The, the phrase that we like to use is it's, it's vows made
visible. We are not professionals are not
(15:35):
just mere occupations. We are, we are we're trying to
do the right things for the right reasons and for the right
ends. And I think that that is really
what what changes we we want to guide this quest.
And we think that there's nothing more noble than
something that then guiding a quest that's, that's helping
another human being become a new, improved, better version of
(15:57):
who they am, which is back to this idea of human flourishing,
that the whole role of, of real business, the purpose of
business is to create more humanflourishing.
And I know that's a, a radical statement.
There's a lot of people who pushback on that.
But we, we believe it in our core that that's what the
purpose of business is, is to, to increase human flourishing.
(16:20):
And not just just some, but all of humans as well.
And just one add addition to that thought, Kevin, is that in
the transformation economy the. Customer's a hero.
And they're on a hero's journey.All the.
Business is doing is guiding that transformation from where
they are to where they want to be, some desired aspirational
(16:42):
future state. But it's the customer that's the
hero. Not our products and services,
not our expertise, although all that's needed, but the customers
that the hero. That's very interesting.
And in our very small but very important part of the business
world, I know that we often hearthat we have to consider a lot
(17:04):
of things from our customers or our marketplaces perspective,
where sometimes it's very easy to look at things from an inside
out perspective. My name is Kevin.
I'm sitting here, this is what Ido, this is what I offer and so
on and so forth. But a lot of your work and a lot
of your writing kind of is the reverse of that where since the
customer is the hero of the journey, we have to look at
(17:26):
everything from his or her perspective and have much more
of an outside in type of approach there as well.
So I think that's very interesting and has a great kind
of Venn diagram overlap with what our members would typically
do on a daily basis in their jobs as well where they have to
think about this from they theirhero slash customers
(17:48):
perspective, we'll put it that way.
Yeah, now that's well said. And also in reading your work, I
know that there is a great discussion where you talk about
burnout and from a an individual's perspective from us
in our individual jobs, you discuss burnout as not kind of a
(18:14):
kind of a fatigue or an exhaustion with the job itself,
but as a moral injury. How did you land on that and
what are the implications there?I was listening to a podcast and
they had a guest by the name of Doctor Wendy Dean and she had
written a. Book with her co-author called
(18:34):
If I Betray These Words. And this podcast, you know when
you just this. Was a BFOA.
Blinding flash of the obvious. Because she said.
We've been talking about burnoutsince the 1970s.
Or thereabouts. And when you read all.
The studies. Especially in the professional
space where Ed and I. Play Doctors have a 50.
Percent burnout rate nurses, accountants, dentists, I mean
(18:58):
they go down the list, you know they.
They divorce higher at higher rates.
They have addictions. At higher rates, commit suicide,
at higher rates and. She said.
But it we've. Been dealing with this now.
For 55 years or whatever. And we haven't made any
substantial progress because shebelieves it's a misdiagnosis.
(19:19):
She says basically. Burnout is just a demand
resource mismatch. Sure you can be.
Overworked for a short period. Of time COVID is a great example
for the medical. Workers, but the bigger.
Problem, as she saw it, was the business model of the medical
profession. Specifically that basically
these people. Were transgressing or watch
(19:40):
watching being transgressed deeply held beliefs and that's
and so moral injury is a term that came out of the Vietnam War
and it's basically perpetrating bearing witness to or failing to
prevent acts that transgress deeply held moral beliefs and
expectations and since doctors take an oath pretty serious oath
(20:01):
about when they Don the mantle of physician that's not just a
job that's not just what they. Do it is who they are.
And when they can't, when they're restricted by the
business model and all the regulations and the insurance
companies and the government's looking over their shoulder,
they, they can't practice medicine the way that they
wanted to, that that brought them into the profession.
(20:22):
She believes it's moral injury. I believe the same thing
because. After all, if it was.
Burned out. I mean, Kevin, if we came into
your house and changed every light bulb and 50% of them burnt
out, I don't think you'd blame the individual.
Light bulb. I think you'd blame the
electrical system and in this case.
The electrical system is the feefor service business model that.
(20:43):
Puts margins and Billings above humanity and caring for people
and, you know, acting as a professional.
So I think she's, I think she's dead on, right.
We had her on our show the Soul of Enterprise.
It's a great interview. She's she's absolutely brilliant
and her book. If I betray these words.
Definitely worth reading it'll it'll probably change your mind
(21:06):
about burnout. And just to piggyback on on that
too, I was having an interestingconversation at an accounting
conference last week. And one of the participants
who's a younger person, she was part of this group of 40 under
40 accountants. And, and she said that she has
friends, she works out of the DCarea who are government
employees working 3035 hours a week who are claiming burnout.
(21:31):
And she's like, how can they possibly have burnout?
They're only working 3035 hours a week.
And when I, when, when we talkedabout this concept of moral
injury, she's like, that's theirproblem.
They, they are actually being asked to do things that are
against their, their, their moral persuasion.
So that that it is, it is affecting them as peoples to
such a deep, profound level thatit doesn't matter that it's only
(21:54):
30 hours a week. So you can have moral injury
occur and, and, and not have andnot have and you cannot be in
moral injury and be working 60 hours a week.
So it's really not the the, the level of fatigue so much as that
you're being asked to do something that is against your
core, against the core of who you are.
Not living your purpose, basically.
(22:15):
Absolutely, yes. It's a case where we're
essentially not in the right place.
And when you're not in the rightplace, it really doesn't matter
how many hours you spend there or what's going on there.
And the converse of that is whenyou are in a right place, if you
are fulfilling these needs, these human needs and these
marketplace hero customer needs,then you may be in a case where
(22:37):
the time flies by, there's not enough hours in the day.
So I can understand that as well.
Back in the Stone Age, when I went to Business School, they
told my classmates and I that the function of the firm was to
create shareholder wealth. That was the whole idea.
(22:58):
It can be called stakeholder capitalism.
It can be called various other things, but basically the firm
or the company wasn't there for the customers, It wasn't there
for the employees. It was for the shareholders.
And I know in your writing as well, you challenge this idea of
kind of stakeholder capitalism and you challenge a lot of those
(23:21):
things that I was taught back inthe Stone Age in Business
School, which might be surprising to some of our
members. So what are the limitations of
that model? And what's the alternative for
maintaining kind of a purpose, amoral accountability and a
reason there? Well, in short, it it, it, it's
(23:46):
a false dichotomy. It's a false choice because when
you say that we please all stakeholders, employees,
customers, shareholders, team members, all, all of those
folks, when you please all, you actually please none, you
ultimately have to make a trade off.
Choices have to be made. And it's true.
(24:07):
All customers want lower prices.All employees want higher wages.
All, all shareholders want a higher return.
So we have to make choices. So the notion that we have the
stakeholder capitalism and that we have to serve all
stakeholders is clearly false. You, you ultimately have to make
decisions as to which one's going to win out in certain
(24:28):
circumstances. Plus if you follow onto what we
talked about earlier, which is the customer is really the
center. If you don't please the
customer, ultimately you're not going to make any revenue.
So therefore you're not going tonot going to make any profit.
So the whole idea is that yes, you do have to look outside the
organization. You do have to look at
(24:48):
customers, but in May, in decision making, you still have
to make sure that what you're doing is serving those customers
ball at the same time earning a profit.
Peter Drucker talked about profit as it's the price we pay
for tomorrow. So especially for a professional
pricing society crowd, I think that's a that's a really
important quote, right? If, if, if profit is the price
(25:10):
we pay for tomorrow, we have to figure out a way to make sure
that we're profitable inside thebusiness now, not by doing
things that are illegal, immoral.
That's fraud. We already, we, we clearly
reject all of those things. So it's really about creating
value outside oneself, one of the, the most amazing things.
And, and Kevin, you used a phrase earlier in this
(25:30):
interview, you said giving back.I, I, I reject that phrase.
It's not in our document, but I reject that phrase giving back
because giving back implies a taking in the 1st place.
And I believe that in most cases, not all, but in most
cases, businesses create value for others and therefore they
don't. They're not taking anything in
(25:51):
the first break. So they're already giving.
If they want to give more, that's completely fine.
But there's no reason to give back to the community.
You've already created for the community and no less of a
personality, as William Nordhaus, a Nobel laureate in
economics has, has done a lot ofwork on this.
And he comes to the conclusion that entrepreneurs roughly keep
(26:13):
about 2% of the value that they create in the world.
So let's just take Jeff Bezos asan example because I think the
last time I checked, his net, net wealth was like $100
billion. So the math is easy, right?
So if we just take he, he, he's worth $100 billion.
If we apply Nordhaus rule to this, that means he's created
(26:34):
that's 2%. So therefore he's the inverse of
that is 49 times, right. So he's created $4.9 trillion in
wealth outside of himself. You know what, I'm going to give
him the 100 billion. Thank you, Jeff.
Every time I have something delivered to my house from
Amazon, which will probably be once again later today, I'm
(26:54):
benefited by this. So we reject this notion of a
because it leads to false choices that really don't exist.
Ron, the Evans, anything to add to that?
Yeah, just and and we're not saying Kevin that profit.
Is is the. End result of a business, we
think human flourishing is the Raisin d'etre of business.
(27:15):
Profit is an applause. It's not the performance and and
that's a really important point.And the other thing is.
Especially for pricers when you look at.
Price theory, the crown jewel ofeconomics.
It basically says prices play a role they play.
A function in society. 3 roles. And that is they distribute
(27:36):
income, they allocate resources,and they transmit information.
About what goods? And services are in demand.
And where to shift resources? And those prices are ultimately
determined by consumer sovereignty based on the value
of the company's offerings. Otherwise, no business would
ever go bankrupt, right, if customers didn't change their
(27:57):
preferences. Or or whatever.
And we just don't think that stakeholder capitalism like Ed
said. Which tries to please everybody.
I mean, if I'm not a customer ofWalmart, how much influence
should I have over Walmart because they're in my community?
It's just I. Think it's a false ethics?
When we talk about trying to please everybody.
(28:19):
Sure, we have to please our customers.
Sure, we have to please our employees.
And keep them, but the kind of the.
Guide for that is profit becausethat's.
The index of altruism. And if you're not making profit,
well, then you're probably wasting.
Society's resources. And the market?
Will take you out. And we don't think there's a
(28:39):
better system. We're not saying it's perfect,
but we think that. It's really business that
creates. Wealth, and wealth is the only
antidote to poverty that we knowof all.
Right. Thank you, gentlemen.
Very well stated. Certainly appreciate that as
well. And I want to ask about one
other part of a revelation for the transformation economy that
(29:01):
I found personally very interesting.
And that is, you mentioned that the whole idea of a work life
balance is a falsehood in itself.
Can you talk about your vision of coherence instead of balance
and how that plays out? Well, wow, I, you know, I think.
(29:24):
It's a false. Dichotomy work in life work is
an expression of who we. Are and what we do.
It's our. It's our.
Act of creation and there's There's not a difference between
work and life. They're one in the same and I
don't think we're. Tired because we work too hard.
I think again, it's that goes back to that moral injury, but
(29:45):
more importantly. Work is how we serve.
One another and in Hebrew. The word is avodah which means.
Service and. Work equals worship.
It's the. Same word in Hebrew as work and
worship are basically the same word and a rabbi.
Would tell you as. Rabbi Daniel Appen has told us
(30:08):
on our show. That work is how we serve God's
other. Children.
Now, whether or not you're an atheist doesn't matter to me,
but. It is how we serve.
One another and it is an expression of our creativity.
I look at what entrepreneurs do.Steve Jobs or.
You can go back to Thomas Edisonor Henry Ford.
(30:28):
They pour everything they have into their enterprise and they
do it. Basically to please others.
Because nobody goes into a store.
To please the. The merchant here in the store,
for your own reasons and your own self-interest, they have to
please you and they have to keepup with the times and what the
market demands and all of that. And I just think that working
(30:51):
hard, there's nothing wrong withworking hard.
We love it when we're creating and contributing, and I think
the whole work life balance is just a false dichotomy.
Ed, what do you, what do you sayto that?
Right. I think it's well said, Ron.
And, and I think the, the, the, the, the, the missing piece is
that because we've separated outthose concepts in, in, in
English work is often viewed as a burden.
(31:14):
It's a, it's, it's a toiling rather than service.
And when we, we really need to begin to rethink this and say,
well, the work that we're doing is for, for the applause that we
call cash that we call money that's deposited into our
account, right? The, the money that our employer
pays us is, it is that is thank you notes for a job well done.
(31:35):
And unless we can, unless we canfigure out a way to serve our
fellow human beings through a company or not, the company
needs somebody to do, to do something for them.
You know, it's, it's very interesting that you hear a lot
of people saying, well, the, thecompany is ripping people off
because they're, they're benefiting from their service.
You know, the way it's supposed to work is, is you, you work and
(31:57):
at a perceived value for the, for the, the, the company.
And that company is then allowedto then take what you have.
And because it has put in capital in other areas and
perhaps created other minds thatyou interact with and increase
your knowledge that it then takes that and applies that out
to the in the marketplace where,yes, it can earn a return on top
(32:19):
of what you're doing. So it's not exploitation.
That's the way it's supposed to work.
It's not supposed to be an even trade.
It's supposed to we're supposed to be able to have profit at all
of these different levels, including at your own personal
level as well. So I redefining this that with
that work is worship. I think it's such an important
point and it's it's, it's doublyimportant for me right now as
(32:43):
the father of of a son who who started his first internship
after his freshman year in college, to see him go off with
this notion of I need to go serve the people that are
providing me for this internship.
I need to create value for them.And I think the impression that
that had it has left on him is something that he's going to
take for the rest of his career.And it's so important to to
(33:06):
instill that. I think in in young people, this
is a movement. This is the beginning of a
movement. It's part of our quest.
I like it. Thank you so much.
Yeah, thanks for the explanations there.
And when we look at A Revelationfor the transformation economy,
really there are some very substantial changes that you
(33:27):
address and some things that youare seeing coming that really
are going to change work, life, society in a lot of way, but
particularly within business, within leadership, within how we
interact with our hero, customerand others.
So what would you say with your work, with your writing in A
(33:50):
Revelation for the Transformation Economy?
What are some of the big changesthat we're going to see in the
lives of the people that we workwith and that we serve?
Well, we hope it leads. To more human flourishing and
more human institutions. Gary Hamill, a few.
Years ago wrote a book. Called humanocracy where?
(34:12):
He said. Why is it?
That our organizations are less human than the people inside of
them. And it was really a manifesto
against bureaucracy. And if we're guiding other of
our fellow humans, I think that it's motivating, it's
aspirational, it's one of the highest callings you can do,
(34:34):
even if you're not a professional.
And I I think it's going to leadto more humanity in business
because. But the interesting thing about
transformations, Kevin, is they're built on aspirations and
we all have an aspiration to be.Healthier, wealthier, wiser or.
Live with purpose and meaning and you don't have to go out
(34:57):
into the marketplace and gin up demand for aspirations.
You discover aspirations throughdeep conversation and
relationships and. That is very.
Human, and I don't think it's something AI is going to be.
Able to replace. And so we're going to.
Use AI to stage. Experiences and and help us.
(35:20):
But the guide. Is going to be human, and so not
only does this move up, move, move.
Us up the value curve. By guiding transformations and
give us more. Pricing power, but it.
Also, I think Shields us from obsolescence from things like AI
and other technologies that are probably coming down the road
that we don't even know about yet.
(35:41):
Very interesting and thank you so much for that.
So gentlemen, where can we find a revelation for the
transformation economy? What's the best way for
Professional Pricing Society members to find your very
important work here? Well, the easiest way is to go
to our website thresholdnow.com Revelation.
(36:01):
If you can't find that, just Google it.
I'm sure it'll come up AI Searchbut so it's Threshold
now.com/revelation. And it really is a very
interesting work. I'm a big fan of both Mr. Ron
Baker and Mr. Ed class. So I would encourage everyone
definitely to check out their writing, their hard work in a
(36:24):
revelation for the transformation economy and for
them. Gentlemen, thank you for being
forward-looking, for giving us aa lot of things to think about
as well. And before we sign off, Ed, how
about a quick follow up from thelast PPS conference for our
members as a whole? I'm going to put you on the spot
(36:44):
like you put others on the spot.OK.
Is pricing an art or a science if you can only pick one?
I'm well in the art camp. I'm well in like I'm so far.
I may be the leader of the art camp.
So if you, if you need somebody to argue the art side, I'm, I'm
your guy. I I really, I really do think
(37:06):
it's, it's far more art than science.
Mr. Baker, Ron Baker, how about yourself, your thoughts about
that? Oh, it's definitely an art.
It's so psychological. Price is a story values a.
Feeling. And since value determines
price, I don't know how anyone can call it a science.
Sure, the math behind it you could say is scientific, but I
(37:27):
don't even buy that argument because value is subjective and
people can change their mind anddo all the time.
Because if it wasn't, no business would ever go bankrupt.
And we could. Let AI do pricing.
But there's more to pricing thannumbers.
All right, gentlemen, thank you both so much for joining us and
for giving us a lot to think about today.
And also thanks to everyone who joined us for this episode of
(37:51):
the Let's Talk Pricing podcast with our guest, Mr. Ron Baker
and Mr. Ed Kliss. I encourage all of us to check
out Ron and Ed's work. You can review Threshold, A
revelation for the transformation economy.
A link to their full thought piece can be found in the show
notes of this episode. And looking ahead, we're very
(38:13):
excited to share that Ed Cliffs will be leading a workshop at
the PPS Profitable Conference inLas Vegas in October.
Ed's Certified pricing professional full day workshop
is titled Beyond Products and Services, Pricing and the
Transformation Economy. You can find much more
information about Ed's workshop,about other CPP workshops, about
(38:37):
our conference, and about our other
courses.availableforyouandyourteam@pricingsociety.com.Gentlemen, once again, thank you
so much. I look forward to seeing both of
you again soon. And to everyone tuning in, thank
you so much for joining us for Let's Talk Pricing.
You're listening to Let's Talk Pricing, your connection to the
voices, stories, and strategies shaping the pricing world.
Each episode, we go beyond theory into the practical,
timely conversations that help you lead with confidence and
drive results. Let's start the show.
Very good day everyone, and welcome to the Let's Talk
(00:21):
Pricing podcast. This is a podcast where we
explore the people, the practices, the possibilities
that are shaping the future of pricing, revenue management and
related fields. My name is Kevin Mitchell from
Professional Pricing Society. I'm very excited to be with you
today. And today we're going to do
(00:42):
things a little bit different. First of all, join not by one
guest like normal, but today we have two very, very special
guest. I'll introduce Mr. Ed Class and
Mr. Ron Baker in one second. But today I'm really excited
because we're going to be talking about unpacking a
special theory. So our guest today, Ed Quest and
(01:07):
Ron Baker have just written a very interesting, I don't even
want to say article. It's really kind of a terrific
thought piece. It's entitled A Revelation for
the Transformation Economy. And really what we're going to
do today is we're going to discuss some of their very
unique, very interesting ideas about how business is changing.
(01:29):
And we're going to get some great insights from 2 very
knowledgeable gentlemen here. So today, I'm going to welcome,
first of all, Mr. Ron Baker. A lot of us have known Ron.
If you've been to PPS conferences, you may have seen
both Ron Baker and Ed Quest doing workshops, doing
presentations, doing panels. So we're always happy to welcome
(01:51):
back. A lot of us know Ron and Ed from
the Soul of Enterprise podcast. He has been pricing and Time's
up. He has educated more than
450,000 professionals around theglobe and he not only is a proud
faculty member of Professional Pricing Society with some of our
(02:13):
online courses and some of our in person workshops as well.
But as a fun fact, he is a Disney University alum.
And also joining us today is Mr.Ed Kless.
Ed works with professional leaders.
He drives transformative change.He has served as Sages senior
director of partner development and strategy, and he has hosted
(02:37):
the Sage Thought Leadership podcast.
And like Ron, he is a passionateadvocate for entrepreneurship,
for innovation and for elevatingthe human experience through
business. So Ed and Ron are the Co
founders of Threshold and we aregoing to talk a little bit about
(02:57):
their new work, talk about a revelation for the
transformation economy and some other fun things today.
But Ron and Ed, always good to see you and so happy that you're
with us here today. Thank you so much, Kevin.
PPS has been transferred transformational for me, so I
want to thank you and your father.
(03:18):
Yes, we, we, we love talking about it and we, we Love
Actually hyping the fact that weare faculty members of PPS.
We talk about it all the time. Oh.
Hey, you're very, very proud faculty members.
We are in your debt and of course, PPS members from across
the globe have access to your coast work, to your course,
course work and your learnings as well there.
(03:40):
So appreciate that. And Ron, thank you so much.
Next time I see my father, Eric,I see him typically once or
twice a week at least. I'll make sure to pass that
along to him. But thank you.
So beautiful. So today we are here to talk
about your recent collaborative effort.
So your project is entitled Threshold, a Revelation for the
(04:04):
Transformation Economy. So in a few words, tell us a
little bit about that and a little bit about your work.
Wow, Eric, Kevin, this is a new economic era that we're
entering, you know, economic eras.
Are. Named and defined by their.
Output. So.
(04:26):
You could say we started. Hunter gatherer society and
moved into the agricultural economy, which was where.
We basically extracted. And grew commodities, wheat,
corn maze, that type of thing. And then of course, we you know
that. That set the stage for the
agricultural. Economy And then sometime in the
1700s, late 18 or early 1800s, we started to move into the
(04:49):
industrial economy where we produce goods at a mass scale,
economies of scale, mass production of, you know, home
appliances and cars and things like that.
And that, of course, is the industrial revolution.
And then in the 1920s and most people think it was the 60s and
70s. 80s but it was actually. The 20s when the Economist
started to notice that big chunkof the labor force in the
(05:12):
fastest growing segment was people that weren't in
production of things. They were providing services in
real time on demand. So that was the beginning of the
service economy. And then in 1999 a book came out
called The Experience Economy byJoseph B Joseph Pine the 2nd and
James Gilmore and in that. Book they laid out this.
(05:34):
Progression, they said we went from.
Commodities to goods to services.
And now in the 80s and 90s, we entered the experience economy.
So where products and services exist outside of us?
Experiences we all internalize so we go to Disneyland with our
family and we all have a different experience, but we're
(05:54):
doing it together so we're. Carrying it, of course, but
it's. Affecting us in different ways
individually and in this book in1999, and I think you can
appreciate being a big reader ofbusiness books.
To cite a book that's. 26 years old.
Is a big deal. It's still.
Is well, I can't believe. These guys saw this that far
out, but they said, well, there's.
(06:16):
Even one level higher than experience economy, but they
didn't have any examples in the book and that was the
transformation economy. And that's when you guide an
individual or organization from where they are to some desired
future state. So it's kind of a from to type
situation and you guide them andthey're.
So they're the hero. Of the journey, but it changes
(06:38):
them, changes their identity. So in the transformation
economy. The the the.
Customer is the product and that's what's so interesting
about it. Whereas goods and services say.
Look at what we can do, the transformation economy says.
Look who you can become. Yeah, that's very interesting.
(06:59):
And I like how you lay out the history of how we have gone
through several different eras there.
And 1999, Ron, as you mentioned it, we say it all the time.
It doesn't sound like that was along time ago, but that's eight
years before the smartphone. I mean, that was a different era
where if you had e-mail and things like that in the 90s, you
(07:22):
were probably kind of leading edge there for a while.
I mean, that was a long, long time ago.
So I'm glad to hear that some ofthe insights from back then and
that there were people who had the foresight in order to see
what's kind of coming next. And also it's very interesting
how in this progression now thatthe individual, the consumer
(07:43):
essentially is the product, it'sa lot more specialized now.
So I think that's a very interesting way of thinking
about things. And of course, I'm a big fan of
your work and a big fan of your writing as well.
So with that, there is a bold claim here.
We are really looking at a new economic era.
(08:04):
So, Ed, maybe we'll ask you about this one.
Sir, how would you describe the changes that make the economy
that we're in now according to your work, the transformation
economy, very distinct from the other eras that came before,
where we are right now? Well, the, the real key to the
(08:25):
progression of economic value isthe a very fancy word called the
subsumation that that the all ofthe errors previous to the error
that we're carrying it are, are are in are subsumed by the prior
error. So just to take a very basic
example, when you extract commodities such as eggs and
wheat and sugar, you're and thenyou make a cake and you're
(08:46):
creating a good notice that whenyou buy the cake, you don't buy
three eggs, 1 LB of flour, 1 LB of of of sugar.
You buy a cake. So the commodities are subsumed
in the prior level. When a cake is then written on
by a employee of the grocery store writing happy birthday,
providing the service you don't get here's the cake and here is
(09:08):
the writing. There's a separate bill for the
writing. Happy birthday on it right on
the way down. So it subsumes the prior era.
What is so interesting, Kevin and I would appreciate your
thoughts on this too, because having an organization that that
maybe in in part of this, if youreally think about it, if we
want to subsume the the economy of the experience economy, we
(09:31):
would sell experiences and all of the previous things would be
subsumed in that. So for example, say PPS should
have an offering where you're the experiences are included.
You just let us know if you're coming to our experiences.
So we sell you the entirety of the experience and everything is
(09:51):
subsumed into that. So rather than having to say we
provide this membership and you have to buy this as an extra add
on. No, no, no, no.
It's the entirety of the experience of being apps member,
right? And we think that the next level
here is this idea of transformation, which will
subsume even experiences. Now transformations will include
(10:12):
experiences, perhaps services and even commodities, but they
will all be priorly subsumed in those.
And that's really the key in this transformation economy and
all of the previous economies, but this notion of subsummation
and we find that that people really latch on to that idea.
We'll pause for a quick message.We're heading to Las Vegas this
(10:36):
October 21st through 24th for PPS Profitable Pricing's
preeminent conference. Four days of bold strategies,
practical tools, and real world solutions to help you boost
margins, lead with confidence and accelerate your career.
Connect with pricing leaders, sharpen your skills, and leave.
Ready to make an immediate impact?
(10:57):
Secure your spot and take advantage of early bird pricing
through September 19th now at pricingsociety.com/P PS:.
LV25 All right, let's get back to the show.
So in reading through your work,when we talk about a revelation
for the transformation economy, one of the statements that you
(11:19):
make is that entrepreneurs go first.
So, Ron, in your impression, what exactly does that mean?
Wow, entrepreneurs. I mean, without entrepreneurs
and economy is literally barren.And you know my my mentor,
George Gilder. Loves to say that wealth.
(11:39):
Equals knowledge. The caveman, after all, had the
same access to natural. Resources that we do.
The day the difference between his standard of living in ours
is the knowledge. That was brought to bear.
And so that kind of raises the question, if wealth is
knowledge, where does growth come from?
It growth in that knowledge and,and everything else, economic
(11:59):
growth and it comes from learning and learning is
essentially entrepreneur. And I'm not just talking about
book learning or academic learning.
I'm just I'm talking more about entrepreneurial.
Leaps of faith. And that's where we learn, even
if the business fails. And of course, as you know,
Kevin, I mean, Silicon Valley sits up, you know, the the
(12:20):
companies out there sit on a vast graveyard.
There's a lot more failure than success.
We only see the successes. But you know, growth comes from
learning, and it's those entrepreneurial endeavors.
So even if we fail financially, we learn something in the
process. Almost.
Every big. Businessman, Disney, Hilton,
(12:42):
Merit have failed and they learned incredible lessons from
it. So to me, it's the entrepreneur.
That gives before he gets its. Supply before you demand.
It's the. It's the logic of.
Capitalism, which is, you know, give and you will be given unto
and that the good fortune of others is also your own.
And we think those are the golden rules of enterprise and
(13:05):
entrepreneurship creates the futures that we all live in.
So we we kind of honor and Revere the entrepreneur because
unlike an artist. Who tries to portray?
The world in their image the entrepreneur has to take into
account. Other people, they have to be,
Other directed they have to. Be, in a sense, altruistic.
(13:26):
Because we believe that profit. Is actually an index of
altruism. It shows how well you're serving
others. That's very interesting.
And I know in reading your work that there is an awful lot about
altruism, about giving back, about giving and receiving, and
(13:47):
about the entrepreneurial efforts there as the impetus
really for moving a lot of things forward in a lot of
different ways. So definitely that's a big part
of what you talk about when you discuss the transformation
economy as well. So very much appreciated for
that. And another thing that you talk
(14:09):
about is you argue that professionals should evolve into
guides rather than staying beingvendors, being technicians, but
really taking their marketplaces, their customers by
the hand as part of that experience.
So why do you believe that the traditional technician role, as
(14:30):
some of us call it, no longer really serves as well in today's
economy? Well, first of all, I think that
we can still have technicians and technicians aren't in and of
themselves bad. We just believe that the, the
ultimate role of, of professionals in this new
economy is going to be that of guide.
And just to, to jump back to something that we talked a
little bit about earlier. I, I think there's a bad
(14:51):
connotation of the customer or consumer is the product and
there's a good connotation of it.
The, the bad connotation is, let's call it the Facebook model
where you, you're getting Facebook for quote free because
you are the product, right? They're, they're trying to sell
to you. They're trying to, to, to craft
ads especially for you. We don't mean that, that you,
(15:15):
you are the product in that sense, that the consumer is the
product in that sense. What we mean it is, is that it
is the, the role of the professional to guide the and
change the trajectory of the person, the individual or
organization with whom they're working.
The, the phrase that we like to use is it's, it's vows made
visible. We are not professionals are not
(15:35):
just mere occupations. We are, we are we're trying to
do the right things for the right reasons and for the right
ends. And I think that that is really
what what changes we we want to guide this quest.
And we think that there's nothing more noble than
something that then guiding a quest that's, that's helping
another human being become a new, improved, better version of
(15:57):
who they am, which is back to this idea of human flourishing,
that the whole role of, of real business, the purpose of
business is to create more humanflourishing.
And I know that's a, a radical statement.
There's a lot of people who pushback on that.
But we, we believe it in our core that that's what the
purpose of business is, is to, to increase human flourishing.
(16:20):
And not just just some, but all of humans as well.
And just one add addition to that thought, Kevin, is that in
the transformation economy the. Customer's a hero.
And they're on a hero's journey.All the.
Business is doing is guiding that transformation from where
they are to where they want to be, some desired aspirational
(16:42):
future state. But it's the customer that's the
hero. Not our products and services,
not our expertise, although all that's needed, but the customers
that the hero. That's very interesting.
And in our very small but very important part of the business
world, I know that we often hearthat we have to consider a lot
(17:04):
of things from our customers or our marketplaces perspective,
where sometimes it's very easy to look at things from an inside
out perspective. My name is Kevin.
I'm sitting here, this is what Ido, this is what I offer and so
on and so forth. But a lot of your work and a lot
of your writing kind of is the reverse of that where since the
customer is the hero of the journey, we have to look at
(17:26):
everything from his or her perspective and have much more
of an outside in type of approach there as well.
So I think that's very interesting and has a great kind
of Venn diagram overlap with what our members would typically
do on a daily basis in their jobs as well where they have to
think about this from they theirhero slash customers
(17:48):
perspective, we'll put it that way.
Yeah, now that's well said. And also in reading your work, I
know that there is a great discussion where you talk about
burnout and from a an individual's perspective from us
in our individual jobs, you discuss burnout as not kind of a
(18:14):
kind of a fatigue or an exhaustion with the job itself,
but as a moral injury. How did you land on that and
what are the implications there?I was listening to a podcast and
they had a guest by the name of Doctor Wendy Dean and she had
written a. Book with her co-author called
(18:34):
If I Betray These Words. And this podcast, you know when
you just this. Was a BFOA.
Blinding flash of the obvious. Because she said.
We've been talking about burnoutsince the 1970s.
Or thereabouts. And when you read all.
The studies. Especially in the professional
space where Ed and I. Play Doctors have a 50.
Percent burnout rate nurses, accountants, dentists, I mean
(18:58):
they go down the list, you know they.
They divorce higher at higher rates.
They have addictions. At higher rates, commit suicide,
at higher rates and. She said.
But it we've. Been dealing with this now.
For 55 years or whatever. And we haven't made any
substantial progress because shebelieves it's a misdiagnosis.
(19:19):
She says basically. Burnout is just a demand
resource mismatch. Sure you can be.
Overworked for a short period. Of time COVID is a great example
for the medical. Workers, but the bigger.
Problem, as she saw it, was the business model of the medical
profession. Specifically that basically
these people. Were transgressing or watch
(19:40):
watching being transgressed deeply held beliefs and that's
and so moral injury is a term that came out of the Vietnam War
and it's basically perpetrating bearing witness to or failing to
prevent acts that transgress deeply held moral beliefs and
expectations and since doctors take an oath pretty serious oath
(20:01):
about when they Don the mantle of physician that's not just a
job that's not just what they. Do it is who they are.
And when they can't, when they're restricted by the
business model and all the regulations and the insurance
companies and the government's looking over their shoulder,
they, they can't practice medicine the way that they
wanted to, that that brought them into the profession.
(20:22):
She believes it's moral injury. I believe the same thing
because. After all, if it was.
Burned out. I mean, Kevin, if we came into
your house and changed every light bulb and 50% of them burnt
out, I don't think you'd blame the individual.
Light bulb. I think you'd blame the
electrical system and in this case.
The electrical system is the feefor service business model that.
(20:43):
Puts margins and Billings above humanity and caring for people
and, you know, acting as a professional.
So I think she's, I think she's dead on, right.
We had her on our show the Soul of Enterprise.
It's a great interview. She's she's absolutely brilliant
and her book. If I betray these words.
Definitely worth reading it'll it'll probably change your mind
(21:06):
about burnout. And just to piggyback on on that
too, I was having an interestingconversation at an accounting
conference last week. And one of the participants
who's a younger person, she was part of this group of 40 under
40 accountants. And, and she said that she has
friends, she works out of the DCarea who are government
employees working 3035 hours a week who are claiming burnout.
(21:31):
And she's like, how can they possibly have burnout?
They're only working 3035 hours a week.
And when I, when, when we talkedabout this concept of moral
injury, she's like, that's theirproblem.
They, they are actually being asked to do things that are
against their, their, their moral persuasion.
So that that it is, it is affecting them as peoples to
such a deep, profound level thatit doesn't matter that it's only
(21:54):
30 hours a week. So you can have moral injury
occur and, and, and not have andnot have and you cannot be in
moral injury and be working 60 hours a week.
So it's really not the the, the level of fatigue so much as that
you're being asked to do something that is against your
core, against the core of who you are.
Not living your purpose, basically.
(22:15):
Absolutely, yes. It's a case where we're
essentially not in the right place.
And when you're not in the rightplace, it really doesn't matter
how many hours you spend there or what's going on there.
And the converse of that is whenyou are in a right place, if you
are fulfilling these needs, these human needs and these
marketplace hero customer needs,then you may be in a case where
(22:37):
the time flies by, there's not enough hours in the day.
So I can understand that as well.
Back in the Stone Age, when I went to Business School, they
told my classmates and I that the function of the firm was to
create shareholder wealth. That was the whole idea.
(22:58):
It can be called stakeholder capitalism.
It can be called various other things, but basically the firm
or the company wasn't there for the customers, It wasn't there
for the employees. It was for the shareholders.
And I know in your writing as well, you challenge this idea of
kind of stakeholder capitalism and you challenge a lot of those
(23:21):
things that I was taught back inthe Stone Age in Business
School, which might be surprising to some of our
members. So what are the limitations of
that model? And what's the alternative for
maintaining kind of a purpose, amoral accountability and a
reason there? Well, in short, it it, it, it's
(23:46):
a false dichotomy. It's a false choice because when
you say that we please all stakeholders, employees,
customers, shareholders, team members, all, all of those
folks, when you please all, you actually please none, you
ultimately have to make a trade off.
Choices have to be made. And it's true.
(24:07):
All customers want lower prices.All employees want higher wages.
All, all shareholders want a higher return.
So we have to make choices. So the notion that we have the
stakeholder capitalism and that we have to serve all
stakeholders is clearly false. You, you ultimately have to make
decisions as to which one's going to win out in certain
(24:28):
circumstances. Plus if you follow onto what we
talked about earlier, which is the customer is really the
center. If you don't please the
customer, ultimately you're not going to make any revenue.
So therefore you're not going tonot going to make any profit.
So the whole idea is that yes, you do have to look outside the
organization. You do have to look at
(24:48):
customers, but in May, in decision making, you still have
to make sure that what you're doing is serving those customers
ball at the same time earning a profit.
Peter Drucker talked about profit as it's the price we pay
for tomorrow. So especially for a professional
pricing society crowd, I think that's a that's a really
important quote, right? If, if, if profit is the price
(25:10):
we pay for tomorrow, we have to figure out a way to make sure
that we're profitable inside thebusiness now, not by doing
things that are illegal, immoral.
That's fraud. We already, we, we clearly
reject all of those things. So it's really about creating
value outside oneself, one of the, the most amazing things.
And, and Kevin, you used a phrase earlier in this
(25:30):
interview, you said giving back.I, I, I reject that phrase.
It's not in our document, but I reject that phrase giving back
because giving back implies a taking in the 1st place.
And I believe that in most cases, not all, but in most
cases, businesses create value for others and therefore they
don't. They're not taking anything in
(25:51):
the first break. So they're already giving.
If they want to give more, that's completely fine.
But there's no reason to give back to the community.
You've already created for the community and no less of a
personality, as William Nordhaus, a Nobel laureate in
economics has, has done a lot ofwork on this.
And he comes to the conclusion that entrepreneurs roughly keep
(26:13):
about 2% of the value that they create in the world.
So let's just take Jeff Bezos asan example because I think the
last time I checked, his net, net wealth was like $100
billion. So the math is easy, right?
So if we just take he, he, he's worth $100 billion.
If we apply Nordhaus rule to this, that means he's created
(26:34):
that's 2%. So therefore he's the inverse of
that is 49 times, right. So he's created $4.9 trillion in
wealth outside of himself. You know what, I'm going to give
him the 100 billion. Thank you, Jeff.
Every time I have something delivered to my house from
Amazon, which will probably be once again later today, I'm
(26:54):
benefited by this. So we reject this notion of a
because it leads to false choices that really don't exist.
Ron, the Evans, anything to add to that?
Yeah, just and and we're not saying Kevin that profit.
Is is the. End result of a business, we
think human flourishing is the Raisin d'etre of business.
(27:15):
Profit is an applause. It's not the performance and and
that's a really important point.And the other thing is.
Especially for pricers when you look at.
Price theory, the crown jewel ofeconomics.
It basically says prices play a role they play.
A function in society. 3 roles. And that is they distribute
(27:36):
income, they allocate resources,and they transmit information.
About what goods? And services are in demand.
And where to shift resources? And those prices are ultimately
determined by consumer sovereignty based on the value
of the company's offerings. Otherwise, no business would
ever go bankrupt, right, if customers didn't change their
(27:57):
preferences. Or or whatever.
And we just don't think that stakeholder capitalism like Ed
said. Which tries to please everybody.
I mean, if I'm not a customer ofWalmart, how much influence
should I have over Walmart because they're in my community?
It's just I. Think it's a false ethics?
When we talk about trying to please everybody.
(28:19):
Sure, we have to please our customers.
Sure, we have to please our employees.
And keep them, but the kind of the.
Guide for that is profit becausethat's.
The index of altruism. And if you're not making profit,
well, then you're probably wasting.
Society's resources. And the market?
Will take you out. And we don't think there's a
(28:39):
better system. We're not saying it's perfect,
but we think that. It's really business that
creates. Wealth, and wealth is the only
antidote to poverty that we knowof all.
Right. Thank you, gentlemen.
Very well stated. Certainly appreciate that as
well. And I want to ask about one
other part of a revelation for the transformation economy that
(29:01):
I found personally very interesting.
And that is, you mentioned that the whole idea of a work life
balance is a falsehood in itself.
Can you talk about your vision of coherence instead of balance
and how that plays out? Well, wow, I, you know, I think.
(29:24):
It's a false. Dichotomy work in life work is
an expression of who we. Are and what we do.
It's our. It's our.
Act of creation and there's There's not a difference between
work and life. They're one in the same and I
don't think we're. Tired because we work too hard.
I think again, it's that goes back to that moral injury, but
(29:45):
more importantly. Work is how we serve.
One another and in Hebrew. The word is avodah which means.
Service and. Work equals worship.
It's the. Same word in Hebrew as work and
worship are basically the same word and a rabbi.
Would tell you as. Rabbi Daniel Appen has told us
(30:08):
on our show. That work is how we serve God's
other. Children.
Now, whether or not you're an atheist doesn't matter to me,
but. It is how we serve.
One another and it is an expression of our creativity.
I look at what entrepreneurs do.Steve Jobs or.
You can go back to Thomas Edisonor Henry Ford.
(30:28):
They pour everything they have into their enterprise and they
do it. Basically to please others.
Because nobody goes into a store.
To please the. The merchant here in the store,
for your own reasons and your own self-interest, they have to
please you and they have to keepup with the times and what the
market demands and all of that. And I just think that working
(30:51):
hard, there's nothing wrong withworking hard.
We love it when we're creating and contributing, and I think
the whole work life balance is just a false dichotomy.
Ed, what do you, what do you sayto that?
Right. I think it's well said, Ron.
And, and I think the, the, the, the, the, the missing piece is
that because we've separated outthose concepts in, in, in
English work is often viewed as a burden.
(31:14):
It's a, it's, it's a toiling rather than service.
And when we, we really need to begin to rethink this and say,
well, the work that we're doing is for, for the applause that we
call cash that we call money that's deposited into our
account, right? The, the money that our employer
pays us is, it is that is thank you notes for a job well done.
(31:35):
And unless we can, unless we canfigure out a way to serve our
fellow human beings through a company or not, the company
needs somebody to do, to do something for them.
You know, it's, it's very interesting that you hear a lot
of people saying, well, the, thecompany is ripping people off
because they're, they're benefiting from their service.
You know, the way it's supposed to work is, is you, you work and
(31:57):
at a perceived value for the, for the, the, the company.
And that company is then allowedto then take what you have.
And because it has put in capital in other areas and
perhaps created other minds thatyou interact with and increase
your knowledge that it then takes that and applies that out
to the in the marketplace where,yes, it can earn a return on top
(32:19):
of what you're doing. So it's not exploitation.
That's the way it's supposed to work.
It's not supposed to be an even trade.
It's supposed to we're supposed to be able to have profit at all
of these different levels, including at your own personal
level as well. So I redefining this that with
that work is worship. I think it's such an important
point and it's it's, it's doublyimportant for me right now as
(32:43):
the father of of a son who who started his first internship
after his freshman year in college, to see him go off with
this notion of I need to go serve the people that are
providing me for this internship.
I need to create value for them.And I think the impression that
that had it has left on him is something that he's going to
take for the rest of his career.And it's so important to to
(33:06):
instill that. I think in in young people, this
is a movement. This is the beginning of a
movement. It's part of our quest.
I like it. Thank you so much.
Yeah, thanks for the explanations there.
And when we look at A Revelationfor the transformation economy,
really there are some very substantial changes that you
(33:27):
address and some things that youare seeing coming that really
are going to change work, life, society in a lot of way, but
particularly within business, within leadership, within how we
interact with our hero, customerand others.
So what would you say with your work, with your writing in A
(33:50):
Revelation for the Transformation Economy?
What are some of the big changesthat we're going to see in the
lives of the people that we workwith and that we serve?
Well, we hope it leads. To more human flourishing and
more human institutions. Gary Hamill, a few.
Years ago wrote a book. Called humanocracy where?
(34:12):
He said. Why is it?
That our organizations are less human than the people inside of
them. And it was really a manifesto
against bureaucracy. And if we're guiding other of
our fellow humans, I think that it's motivating, it's
aspirational, it's one of the highest callings you can do,
(34:34):
even if you're not a professional.
And I I think it's going to leadto more humanity in business
because. But the interesting thing about
transformations, Kevin, is they're built on aspirations and
we all have an aspiration to be.Healthier, wealthier, wiser or.
Live with purpose and meaning and you don't have to go out
(34:57):
into the marketplace and gin up demand for aspirations.
You discover aspirations throughdeep conversation and
relationships and. That is very.
Human, and I don't think it's something AI is going to be.
Able to replace. And so we're going to.
Use AI to stage. Experiences and and help us.
(35:20):
But the guide. Is going to be human, and so not
only does this move up, move, move.
Us up the value curve. By guiding transformations and
give us more. Pricing power, but it.
Also, I think Shields us from obsolescence from things like AI
and other technologies that are probably coming down the road
that we don't even know about yet.
(35:41):
Very interesting and thank you so much for that.
So gentlemen, where can we find a revelation for the
transformation economy? What's the best way for
Professional Pricing Society members to find your very
important work here? Well, the easiest way is to go
to our website thresholdnow.com Revelation.
(36:01):
If you can't find that, just Google it.
I'm sure it'll come up AI Searchbut so it's Threshold
now.com/revelation. And it really is a very
interesting work. I'm a big fan of both Mr. Ron
Baker and Mr. Ed class. So I would encourage everyone
definitely to check out their writing, their hard work in a
(36:24):
revelation for the transformation economy and for
them. Gentlemen, thank you for being
forward-looking, for giving us aa lot of things to think about
as well. And before we sign off, Ed, how
about a quick follow up from thelast PPS conference for our
members as a whole? I'm going to put you on the spot
(36:44):
like you put others on the spot.OK.
Is pricing an art or a science if you can only pick one?
I'm well in the art camp. I'm well in like I'm so far.
I may be the leader of the art camp.
So if you, if you need somebody to argue the art side, I'm, I'm
your guy. I I really, I really do think
(37:06):
it's, it's far more art than science.
Mr. Baker, Ron Baker, how about yourself, your thoughts about
that? Oh, it's definitely an art.
It's so psychological. Price is a story values a.
Feeling. And since value determines
price, I don't know how anyone can call it a science.
Sure, the math behind it you could say is scientific, but I
(37:27):
don't even buy that argument because value is subjective and
people can change their mind anddo all the time.
Because if it wasn't, no business would ever go bankrupt.
And we could. Let AI do pricing.
But there's more to pricing thannumbers.
All right, gentlemen, thank you both so much for joining us and
for giving us a lot to think about today.
And also thanks to everyone who joined us for this episode of
(37:51):
the Let's Talk Pricing podcast with our guest, Mr. Ron Baker
and Mr. Ed Kliss. I encourage all of us to check
out Ron and Ed's work. You can review Threshold, A
revelation for the transformation economy.
A link to their full thought piece can be found in the show
notes of this episode. And looking ahead, we're very
(38:13):
excited to share that Ed Cliffs will be leading a workshop at
the PPS Profitable Conference inLas Vegas in October.
Ed's Certified pricing professional full day workshop
is titled Beyond Products and Services, Pricing and the
Transformation Economy. You can find much more
information about Ed's workshop,about other CPP workshops, about
(38:37):
our conference, and about our other
courses.availableforyouandyourteam@pricingsociety.com.Gentlemen, once again, thank you
so much. I look forward to seeing both of
you again soon. And to everyone tuning in, thank
you so much for joining us for Let's Talk Pricing.
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