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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?

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

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  1. You Don’t Have to Bid Everything That Moves!! Facilitated by: Ed Alexander, PPM.APMP Vice President, Shipley Associates

  2. 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?

  3. Bad Bid Decisions Eventually Lead to Problems!!

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

  5. 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

  6. DCAA Study: Investing Early is the Key to Winning Percent of resources allocated during early Capture Phases: * Based on 367 winning Federal proposals

  7. Some Bid Decisions are a Real Stretch!!

  8. 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

  9. A Typical Business Development Process (Shipley’s)

  10. 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

  11. 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.

  12. 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?

  13. 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?

  14. 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 long-term? • 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.

  15. 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.

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

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

  18. Losing Bid: Special Aircraft Carrier for the US Air Force

  19. Losing Bid: Unclear on Customer Requirements for the New 797

  20. So Don’t Base Winning on Good Fortune!!

  21. Hope is not a strategy. Norman R. Augustine Former CEO Lockheed Martin

  22. A Capture Process is based on….

  23. 100% 75% Opportunity Assessment 50% Capture Team Develop-ment 25% Pre- Proposal Planning Proposal Develop-ment 0% Lead Identification Pursuit Decision Prelim Bid Decision Bid Validation Final Mgmt Review Decision Milestones Facilitate Opportunity “Funnel” Opportunities Pursued Business Decision Gate

  24. Pursuit Decision Package Forms Capture Planning Baseline

  25. 5. Implementation and Control Team, schedule, resources, etc. Capture Plans Must Be Concise, Complete, and Accurate 1. Customer Analysis • Organization and processes • Buying trends/history and environment • Program requirements 4. Action Plans • Customer contact • Intelligence collection • Solution development • Contingency and risk management 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

  26. 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

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

  28. Satisfy the Customer’s Range of Issues

  29. Also known as the RFP!! Surveying the Iceberg Examples: explicit issues, hot buttons, schedule, deliverables Requirements Desirements Examples: implied preferences, politics, wants

  30. Business Intelligence is a Continuous Process

  31. Bidder Comparison Chart Derived from Earlier Analyses

  32. Bidder Comparison Drives Strategy Development

  33. 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?

  34. Consultative Interaction: Solid Solutions/Good Bid Decisions

  35. Establish Clear Inputs and Outputs for Each Decision Milestone

  36. 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?

  37. Definition of Insanity Doing what you have always done, but expecting different results!

  38. 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.

  39. 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.

  40. 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

  41. 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

  42. 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

  43. 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

  44. Starts Here!! Capture Planning Positions The Win Early

  45. General Guideline Win Probabilities Source: Onvia Research and Business Intelligence, 2008

  46. 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.

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

  48. 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.

  49. "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 Good Decisions Increase Win Rates!! "If winning isn't everything, why do they keep score?"

  50. You Don’t Have to Bid Everything That Moves!! Facilitated by: Ed Alexander, PPM.APMP Vice President, Shipley Associates egalexander@shipleywins.com

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