The Decline of the Incumbent Empire: Rebid Strategies

The Decline of the Incumbent Empire: Rebid Strategies

APMP BID & PROPOSAL CON 2015 | PAGE 2

The Decline of the Incumbent Empire: Rebid Strategies

LISA PAFE, LOHFELD CONSULTING GROUP


Agenda

The Challenge Perspectives Capture Phase Proposal Phase Bring Home the Win


Incumbents are losing more often Still, best informed wins, so:

How does the challenger overcome the incumbent’s advantage?

How does the incumbent maintain their advantage?

The Challenge


Same customer, same work Same customer, different work

Same work, different customer Different work, different customer

Incumbent’s Perspective

Incumbentitis: False sense of security, complacency, and over-confidence that results in failing to take the proposal process seriously and

thus losing the rebid


Challenger’s Perspective

Often over-estimate the incumbent advantage Assume they can never gather the needed business intelligence to

compensate Think the only way to beat the incumbent is low price

Often under-prepare Rely on rumors about incumbent’s poor performance instead of gathering

real business intelligence Read the ashes instead of setting the fire


Pros of Incumbent: No transition Low risk No mission impact Keep the same people

Customer’s Perspective

Cons of Incumbent: More expensive Same ideas Less innovation Keep the same people

Tension between level of risk aversion and other factors such as price, real or perceived need for new ideas, and appetite for change


We may have capture and proposal processes

We may have a rebid strategy, BUT

We lack rebid specific processes A rebid is different type of animal

My Perspective: Rebid Processes are Deficient


Top 3 Rebid Capture Actions for EVERYONE

1. Shaping2. Value Proposition3. SWOT Analysis


Activate your listening campaign 90% listening, 10% talking Network with ALL customer

stakeholders Strategy evolves as result of shaping

Shaping


Whether you are incumbent or challenger, you must have one

Evaluators perceive and score strengths when a proposed feature: Exceeds requirements Increases likelihood of successful contract/mission

accomplishment Offers a value-add Is not offered by all bidders

Value Proposition


SWOT Analysis

We Win (Reasons why we’ll win – maximize our Strengths)

Xx

They Win (Reasons why we’ll lose – Weaknesses for us)

Xx

They Lose (Opportunity to “ghost” the competition)

Xx

We Lose (Threats to us – need to minimize strengths of competition)

Xx


1. Start on day one 2. Leverage the Project Manager3. Build risk aversion

Capture Phase – Top 3 Actions for Incumbent


Day one of contract award is day one of rebid planning

Ensure past performance is stellar

Start improving on day one (but save a few new initiatives for the proposal!)

Start on Day One

“The government will likely use the incumbent's past performance evaluations as a major factor in the re-compete process.”

-GovWin by Deltek


Begin greening early Implement an innovation plan Inform your shaping with a

listening campaign

Start on Day One continued


Leverage Project Manager

The PM is your best listener and shaper Teach him/her to be an

ethical spy Require the PM to implement a rebid

knowledge repository


Make sure relationship is not just with people (who can be captured) but also with your company

Offer value-adds specific to company capabilities Highlight institutional knowledge (relationships, technology,

processes) Be prepared to mitigate risks if you cannot prime the rebid

Build Risk Aversion


1. Make honest assessment of win probability2. Exploit incumbent vulnerabilities3. Overcome the customer's risk aversion

Capture Phase – Top 3 Actions for Challenger


Start early and be honest!

Can you fill gaps and perform at the winning price?

If you cannot fill gaps prior to RFP release, then no bid

Make an Honest Assessment

PWS/SOWRequirements

Bidder

CoreCompetency

PastPerformance

Customer Knowledge

• ___________• ___________• ___________• ___________

• ___________• ___________

Your Costs vs. Winning Price


Find them: web searches, networking, LinkedIn connections (employees, teaming partners, customers)

Ghost them: promises made and not kept… goals not achieved… performance measures not attained… personnel not retained...costs not contained… financial instability

Exploit Incumbent Vulnerabilities


Learn hot buttons and turn these into potential risks of status quo

Offer compelling solution with strengths Lower price may overcome perceived risk in today’s

market

Overcome Risk Aversion


1. Turn win themes into ghosting themes2. Conduct effective proposal reviews3. Price to win

Top 3 Rebid Proposal Actions for EVERYONE


Articulate benefits to the customer (with proof) while ghosting what competitors lack

Ghost incumbent and build risks of status quo OR

Ghost challengers and build risks of change

Turn Win Themes Into Ghosting Themes


Don’t drink your own bathwater!

Assign reviewers to play devil’s advocate

Effective Reviews


Use reverse engineering and competitive intelligence to derive rates and markups for competitors

Recent studies show price erosion of 15-30%

Price to Win

Maximum acceptable bid (MaxAB)

Price to win (Pwin) is somewhere in between

Minimum acceptable bid (MinAB)

Market driven competitive range is between MinAB and MaxAB


1. Have the best proposal2. Look to the future

Proposal Phase – Top 2 Actions for Incumbent


Expectations are higher for incumbent's proposal Continuously improve on

your winning proposal Better value proposition New proof points Lessons learned Improvements Cost savings Lowest risk

Have the Best Proposal


Most incumbent proposals read like a history lesson

Explain what you WILL do not just WHAT you did

Avoid repeating that you are the incumbent

Do not ignore problems and mistakes

Look to the Future


1. Exploit “incumbentitis”2. Make the business case for change

Proposal Phase – Top 2 Actions for Challenger


Incumbents build risk aversion by focusing on the past Focus your proposal on the future

Demonstrate risks of status quoGhost past failuresProvide proof of future success

Take a fresh look at the price

Exploit Incumbentitis


Demonstrate low risk at better priceWhy is different better?What is the ROI?Which features are strengths?Are proposed innovations in keeping

with level of risk aversion? Gather and provide proofs for every

element of the solution

Make the Business Case for Change


News flash: Incumbent and challenger have almost an equal chance of winning

No matter the outcome, capture lessons learned for your next battle

Bring home the win!


Questions

Share your lessons learned:How did you unseat an incumbent?How did you retain your incumbency?


Lisa Pafe, CPP APMP & PMI PMPPrincipal ConsultantLohfeld Consulting Group, Inc.(703) 577-8490 lpafe@lohfeldconsulting.comwww.lohfeldconsulting.comwww.linkedin.com/in/lisapafewww.twitter.com/lisapafe

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The Decline of the Incumbent Empire: Rebid Strategies