You Don’t Have to Bid Everything That Moves!!

Facilitated by:

Ed Alexander, PPM.APMP Vice President, Shipley Associates

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A Few Meaningful Questions Before We Begin

How many of you have ever worked on a proposal you—and everyone else—felt was a losing effort?

How many of you think your management knows how to say “No” to a bid/no-bid decision?

How many of you have ever worked on a proposal and asked yourself, “Why did those management idiots decide to Bid on this turkey?”

How many of you wish your boss could hear this presentation?

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Bad Bid Decisions Eventually Lead to Problems!!

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Why Proposals Fail!! (A Post-Mortem of 5 Huge Losses) Did not listen to the customer; cultivated relationships too late Not aware of weaknesses - past performance Did not submit a compliant proposal Strategy and win themes not articulated or reviewed early enough Proposal team/manager not identified early enough Late entry, began too late, or management involved too late Did not consistently conduct Business Decision Gate/Phase Reviews Teamed with the wrong partner(s) or subcontractor(s) Force fit existing product instead of developing a solution with the customer Underestimated the competition -- non-effective competitor analysis High-tech solution with no risk mitigation plan or strategy Total cost too high – did not establish price to win Did not satisfy international political mandates

Company loss analysis results: Capture effort establishes win probability… Implement a Consistent and Disciplined Process

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Superb customer relationships

Good technical solutions

Good people

Well-defined business capture process

Early upper-management involvement

Discipline to follow the process

Professional proposal staff

Investment in up-front activities

Excellent program execution

Yardsticks of Companies That Produce Winning Proposals

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DCAA Study: Investing Early is the Key to Winning

Percent of resources allocated during early Capture Phases:

* Based on 367 winning Federal proposals

57%26%

17%Before RFP Release

During RFP Response

After ProposalSubmitted

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Some Bid Decisions are a Real Stretch!!

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Use the Pursuit Decision out of the Opportunity Assessment Phase to:

Verify the lead fits your strategic direction

Verify the lead fits your capability

Obtain resources to initiate Capture Planning efforts

Use the Pursuit Decision!!!

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A Typical Business Development Process

Phase Title Decision Milestone

0 Market Segmentation Campaign Decision

1 Long-Term Positioning Interest Decision

2 Opportunity Assessment Pursuit Decision

3 Capture Planning Preliminary Bid

4 Proposal Planning Bid Validation

5 Proposal Preparation Proposal Submittal

6 Post-Submittal Activities

(Shipley’s)

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Some Reasons Not to Pursue

Some of the reasons a decision might be made to stop pursuing an opportunity are:

It is not consistent with the company’s strategic plan Funds are not available to pursue the bid Can’t get the right companies for the team No available/acceptable key personnel candidates Insufficient proposal resources Strongly positioned low-cost bidder emerges Unacceptable contract terms and conditions Key client relationships have not been established

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The Bid-No Bid Decision Making Spectrum Simple, Direct Approach

We bid everything Shotgun approach Results are generally

High bid costs Low bid-win rate

No-Blind-Bids Approach No bid unless we know they are coming Have helped influence the buyer Results are generally

Higher bid-win rate Higher win-ratio

Costs more upfront to perform BD rather than react.

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Is the lead within our business area?

Does the lead fit within our strategic plan? Do we have a plan?

To what extent are we known to the customer?Do we have a relationship?

Has the customer budgeted for the purchase?

Do we have local representation?

Who created the customer's vision for potential solutions?

Bid Discipline Drivers

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Do we understand who has the decision power and influence?

Do we have any current or potential “coaches” or sponsors in the customer’s organization? Any detractors?

Is there an incumbent? Are we? Are the incumbent or others already favored?

Do we have any competitive advantage, discriminators, or value-added aspects?

How will the lead affect our existing business, positively or negatively?

Bid Discipline Drivers (cont.)

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What resources are required for capture and are they available?

Can we win? How or why could we lose?

Is the lead potentially profitable short-term or long-term?

Do we know the client goals, issues, impacts?

Do we have the people and experience?

Do we have corporate commitment and resources?

Bid Discipline Drivers (cont.)

Some organizations have doubled or tripled their win rate with good bid discipline without changing anything else.

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Salespersons with challenging quotas making pursuit decision.

Management requires all no-pursuit decisions to be justified; therefore, pursue everything!!

Got an RFP? Bid it.

Lack of questions or challenges to the opportunity is treated as bid justification. Silence means approval.

Avoid These Poor Bid Decision Approaches!!

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Losing Bid: Customer Wanted Low-Cost Aircraft Carrier, but, ….

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Losing Bid: Customer Wanted Airplane To Cover Rough Terrain!!

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Losing Bid: Special Aircraft Carrier for the US Air Force

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Losing Bid: Unclear on Customer Requirements for the New 797

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So Don’t Base Winning on Good Fortune!!

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Hope is not a strategy.Norman R. Augustine

Former CEO Lockheed Martin

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A Capture Process is based on….

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100%

0%Lead

IdentificationPursuit

DecisionPrelim BidDecision

BidValidation

Final MgmtReview

25%

50%

75%

OpportunityAssessmentOpportunityAssessment

CaptureTeam

Develop-ment

CaptureTeam

Develop-ment

Pre-ProposalPlanning

Pre-ProposalPlanning

ProposalDevelop-

ment

ProposalDevelop-

ment

Opportunities Pursued

Decision Milestones Facilitate Opportunity “Funnel”

Business Decision Gate

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Pursuit Decision Package Forms Capture Planning Baseline

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Capture Plans Must Be Concise, Complete, and Accurate

5. Implementation and ControlTeam, schedule, resources, etc.

1. Customer Analysis Organization and processes Buying trends/history and

environment Program requirements

2. Competitive Analysis Competitor approaches Competitor positions with the customer Probable competitors’ solution approach Our competitive position with the customer Our solution approach

3. Capture Strategy Bidder comparison Solution strategies Strategies for winning

cost/price

4. Action Plans Customer contact Intelligence collection Solution development Contingency and risk

management

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Proposal Plan Contents Portions of capture plan—win strategy, etc. Process and reporting formats to manage tasks and budgets Information and instructions concerning proposal development

tasks and assignments

Capture Plan Feeds Proposal Plan

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Lead Compatibility Grid—Increase Win Probability and Understand Risk of Bidding

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Satisfy the Customer’s Range of Issues

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Surveying the Iceberg

Examples: implied preferences, politics, wants

Examples: explicit issues, hot buttons, schedule, deliverables

Also known as the RFP!!

Requirements

Desirements

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Business Intelligence is a Continuous Process

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Bidder Comparison Chart Derived from Earlier Analyses

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Bidder Comparison Drives Strategy Development

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To what extent have we influenced the prospect’s requirements?

Does the prospect rely on us for input and help?

Do we know the competitors and their likely approach?

Are there any surprises in the draft requirements? Do we know why?

Are You Positioned to Win Before Committing to a Proposal Effort???

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Consultative Interaction: Solid Solutions/Good Bid Decisions

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Establish Clear Inputs and Outputs for Each Decision Milestone

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In-House Probing Questions

Are we telling them what we have to sell rather than documenting what they say they want to buy?

Is our analysis of the competitive landscape rooted in our and our competitors’ position---with the customer?

Is our view of the requirements representative of how the customer sees it?

Do we understand that consumers are statistics, but customers are people?

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Definition of Insanity

Doing what you have always done, but expecting different results!

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Indicators for a “Yes” Bid Decision

Indicators for a "yes" bid decision are: You have pre-sold the customer. You know the procurement history and You can successfully compete for the contract. Your capabilities are a perfect or near-perfect match

with the customers requirements. Remember that a subcontractor can fill capabilities that your company lacks.

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Indicators for a “No” Bid Decision

Indicators for a “no" bid decision are: You are bidding blindly and all the information you

have is contained in the RFP. You are attempting to stretch your qualifications and

capabilities to meet the requirements. There is an incumbent contractor and

you don’t know if the customer is unhappy or you have no special knowledge of the

procurement.

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Purpose of the Bid Decision Process Not just to reach a yes or no conclusion Identification of your company’s strengths and

weaknesses in relation to the bid requirements and competition.

Identifying corresponding improvements to your bid. Maintaining a balanced bid portfolio Understanding the risk associated with bidding a

specific opportunity Preclude expending significant time/energy qualifying

sales leads that are either inconsistent with the strategic plan or that have a very low probability of winning

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Consider 10 Elements of Opportunity

Corporate Direction Match Competitive Environment Revenue Value Potential Profitability In-House Content Future Business Potential Resources to Bid Probability of Success Collateral Benefit Overall Strategic Value

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Consider 10 Elements of Risk

Customer Commitment Corporate Competence External Obstacles Opportunity Engagement Solution Life-Cycle Match Period of Performance Delivery Schedule Resource Coordination Nonperformance Penalties Overall Feasibility

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Opportunity vs. Risk Assessment

Quadrant A: •highest priority, •highest probability of success•best potential payback.

Quadrant D: •projects to avoid •don’t waste resources on pursuing •low probability of success •low potential payback

Quadrants B and C:

• require greater analysis and discussion •determine whether the organization should pursue the opportunity or not

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Capture Planning Positions The Win Early

Starts Here!!

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General Guideline Win Probabilities

Category Status Win Probability

Blind Bid New Market 1-5%

Blind Bid Established Market; Current Client 10-25%

Well-Positioned Bid New Market; New Client 20-30%

Well-Positioned Bid

Established Market; Current Client 30-60%

Re-Compete Satisfied Client 60-75%

Sole Source Satisfied Client; Recent Win Contract Growth 50-90%

Source: Onvia Research and Business Intelligence, 2008

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The Importance of a Bid/No-Bid Process The future of a company depends upon its

ability to:consistently make good decisions on how to prioritize opportunities and commit scarce resources.

Creating a simple, repeatable, and effective bid/no-bid decision making process can:prove very valuable to help a company

reduce costs and improve both revenues and profits.

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Bad Bid Decisions Might Cause Reassignment to Another Tough Job!!

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Final Thoughts Customer Focus at an all-time high. Establish Relationships, don’t just do

Transactions Past Performance importance on the way up

so choose wisely Get new customers Sell Benefits, not Features Start early/Finish strong Have a process—and the discipline to follow it. Sometimes, it is best to—Just say “No” to

Bids.

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"Winning is not a sometime thing: it's an all the time thing. You don't win once in a while; you don't do the right things once in a while; you do them right all the time. Winning is a habit. Unfortunately, so is losing."

--Vince Lombardi

"If winning isn't everything, why do they keep score?"

   

Good Decisions Increase Win Rates!!

You Don’t Have to Bid Everything That Moves!!

Facilitated by:

Ed Alexander, PPM.APMP Vice President, Shipley Associatesegalexander@shipleywins.com