We see so many companies using a scatter gun approach to contracts and how they present themselves. For one RFP they are targeted solutions experts, in another they are volume players.
One buyer is big government who wants strict compliance and governance processes but the next buyer is a start-up who wants agility. The cost of responding to these RFP’s while reinventing yourself is often unviable. Assuming that they win the contract, the cost of setting up the service or product will be ridiculously high. If you are Google you have the breadth, depth and budget to do this, but for the rest of us it’s not a wise growth strategy. You need to question and interrogate your company’s purpose and direction.
The companies that fit into the category of Performance Bidder are by their nature focused on their targets and their fitness for purpose. They shape their market, lead the development of new product and service lines, and are highly integrated with the development needs of their clients. While the status quo remains stable, they stay fit. But even these giants of defense, aerospace, utilities and security get to the stage where major changes in the landscape force a re-evaluation and they need to pivot their approach. Lifestyle Bidders also fall into this category, focusing on fewer and farming more specific opportunities, and choosing only to bid for the contracts that are an exact fit for their offer or purpose. The other two categories – Industrial and Reluctant - would be well advised to spend time in assessing their fitness.
Very few companies ‘Get Fit to Fight’ or ‘Positioned’ because of lack of knowledge, lack of time or in many cases lack of discipline. In truth, most dive into a bid opportunity, do their best and then see what happens. But if you find that you are reinventing yourself for every opportunity, your win rate is low and the cost of post-win mobilization is high, then read on.
Bidding is a route to growth. Get good or get out. There are no medals for participation and sadly second place is a loss. Losing means that you will have a big fat figure on the wrong side of the P+L called bid costs. It’s an expensive business that requires a lot of brainpower, investment, time and energy. Paradoxically, there are two winners in bidding. The winner of the competition and the one who walked away because they had done their preparation and knew not to enter a fight they weren’t ready to win.
Getting ready to bid is like preparing for battle. You can’t be fit to fight if you are vague on what you are fighting for and who you are fighting to get it. It took us years to work out that we were not ready for many of the opportunities we targeted. We took a step back and asked ourselves some basic questions. This was one of the main factors behind the increase in our win rates.
In 2011, a Fortune 250 company that we worked with won eight contracts in five months to provide an education service. The combined value was $300m. The margins and costs were in line with their other education activities. They were an experienced education provider, but this was a new service line, with different buyers and different expectations. While this was addressed on paper in their bids this was never fully appreciated in operational delivery. Over the course of the contract the company faced considerable challenges in delivering the contracts to the new format. In 2013, these eight contracts were all loss making and played a large part in wiping out 17% of the share value when the contracts concluded 24 months later.
So, what went wrong? These guys were good at education and great bidders. The problem was they weren’t fit for this new contract type. It required a lot more pre-implementation consultation than they were used to in previous contracts. The company had a tried and tested mobilization and implementation process which did not apply in the new style contract. This new world required considerable investment upfront to review design solutions and pathways. The team were not equipped to deal with the level of consultation required early in the contract. The leaders were implementers and not consultants. A basic but crucial issue.
Just because it was education it didn’t mean that they were best placed to capitalize on it. They not only lost millions and wiped out capital value, they also lost the opportunity cost of operating in a space where they were fit to win or they could have used that time to become agile in a different market.
How did they get back on track? We took them through our Get Fit to Fight Program over 10 days, which enabled them to refocus and prepare for their new world reality.
Get Fit to Fight - The Stages
Where are you now?
Where do you want to be?
What does the Market need?
What is stopping you?
Bring it all together in a clear value proposition
|Define how you are doing now
Look at your performance over the last 18 months:
» Targets met/not met
|What does your market place look like?
Define where you currently fit in the market
|Define the market need
Segment clients by their needs, maturity, size, industry, behaviors or persona
|What or who are the barriers and blockers to growth?
What has been done to date to overcome them?
Create a joined up Business Development strategy
|Create an authentic value proposition
Focus the proposition on the right targets
Finding the right opportunities
The sweet spot in bidding is to get involved in an impending contract opportunity just before it has been rubber stamped by the buyer’s own approval process. At this point, you know it’s real and not going to be mothballed, and the requirements are not set in stone. This is an opportunity to seriously influence the buyer – your aim is to get close to them during this ‘pre-bid phase’ and get them to define requirements only you can deliver. Failing this, at the least you will have done positive messaging about yourself and picked up valuable intelligence. You only really get this chance to engage the buyer if you have an existing relationship or you’ve been trying to create one.
Buyers rarely enter big deals with companies they have not heard of or not carried out soft market testing with. The message here is to be proactive, meet regularly with your targets about their plans and their pain points. If you don’t have a relationship, get on their radar by moving into their environment. If you are a contractor who is a specialist in healthcare, you need to be seen as a credible contributor to health care by producing or sponsoring valuable insights, learning or knowledge. If you are a SaaS player for example targeting charities, add value to the charity sector by sponsoring charity events that buyers engage with.
If you are pursuing a government contract, you can find out about them easily because they are advertised publicly. There are hundreds of portals you can use to find out about these opportunities. Some are free. You set up an account and create a profile and then are alerted every time you match an opportunity, a bit like a dating site. Most public bodies operate an open door for suppliers to discuss upcoming opportunities so don’t be afraid of making contact with them, you will not prejudice your chances.