Transcript APMP Presentation: You Don`t Have to Bid Everything That Moves

You Don’t Have to Bid
Everything That Moves!!
Facilitated by:
Ed Alexander, PPM.APMP
Vice President, Shipley Associates
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)
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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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Yardsticks of Companies That
Produce Winning Proposals
 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
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DCAA Study: Investing Early is the
Key to Winning
Percent of resources allocated during early Capture Phases:
Before RFP Release
17%
26%
57%
During RFP Response
After Proposal
Submitted
* Based on 367 winning Federal proposals
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Some Bid Decisions are a Real
Stretch!!
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Use the Pursuit Decision!!!
 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
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A Typical Business Development
Process (Shipley’s)
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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
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Post-Submittal Activities
Some Reasons Not to Pursue
Some of the reasons a decision might be made
to stop pursuing an opportunity are:
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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
The Bid-No Bid Decision Making
Spectrum
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Simple, Direct Approach
 We bid everything
 Shotgun approach
 Results are generally
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No-Blind-Bids Approach
 No bid unless we know they are coming
 Have helped influence the buyer
 Results are generally
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High bid costs
Low bid-win rate
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Higher bid-win rate
Higher win-ratio
Costs more upfront to perform BD rather than
react.
Bid Discipline Drivers
 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?
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Bid Discipline Drivers (cont.)
 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?
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Bid Discipline Drivers (cont.)
 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 longterm?
 Do we know the client goals, issues, impacts?
 Do we have the people and experience?
 Do we have corporate commitment and resources?
Some organizations have doubled or tripled their win rate with
good bid discipline without changing anything else.
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Avoid These Poor Bid Decision
Approaches!!
 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.
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Losing Bid: Customer Wanted LowCost 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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Decision Milestones Facilitate
Opportunity “Funnel”
100%
75%
Opportunities
Pursued
50%
Opportunity
Assessment
25%
0%
Lead
Identification
Capture
Team
Development
Pursuit
Decision
PreProposal
Planning
Prelim Bid
Decision
Bid
Validation
Business Decision
Gate
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Proposal
Development
Final Mgmt
Review
Pursuit Decision Package Forms
Capture Planning Baseline
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Capture Plans Must Be Concise,
Complete, and Accurate
1. Customer Analysis
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Organization and processes
Buying trends/history and
environment
Program requirements
5. Implementation and Control
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Team, schedule, resources, etc.
4. Action Plans
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2. Competitive Analysis
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Competitor approaches
Competitor positions with the customer
Probable competitors’ solution approach
Our competitive position with the customer
Our solution approach
Customer contact
Intelligence collection
Solution development
Contingency and risk
management
3. Capture Strategy
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Bidder comparison
Solution strategies
Strategies for winning
cost/price
Capture Plan Feeds Proposal
Plan
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
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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
Requirements
Examples: explicit
issues, hot buttons,
schedule,
deliverables
Also known
as the RFP!!
Desirements
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Examples: implied
preferences,
politics, wants
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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Are You Positioned to Win Before
Committing to a Proposal Effort???
 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?
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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:
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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.
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
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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
Consider 10 Elements of Risk
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Customer Commitment
Corporate Competence
External Obstacles
Opportunity Engagement
Solution Life-Cycle Match
Period of Performance
Delivery Schedule
Resource Coordination
Nonperformance Penalties
Overall Feasibility
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%
New Market; New Client
20-30%
Established Market;
Current Client
30-60%
Re-Compete
Satisfied Client
60-75%
Sole Source
Satisfied Client; Recent
Win Contract Growth
50-90%
Well-Positioned
Bid
Well-Positioned
Bid
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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Good Decisions Increase Win Rates!!
"If winning isn't
everything, why do
they keep score?"
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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
You Don’t Have to Bid
Everything That Moves!!
Facilitated by:
Ed Alexander, PPM.APMP
Vice President, Shipley Associates
[email protected]