To bid or not to bid (APMP Greater Midwest Chapter Presentation) Bob Lohfeld 4-20-11

To Bid or Not to Bid: Seven Criteria for Making Sound Bid Decisions and Avoiding the Traps that Lead to Poor Bid Decisions

To Bid or Not to Bid: Seven Criteria for Making Sound Bid Decisions and Avoiding the Traps that Lead to Poor Bid Decisions

Webinar Presented to APMP Greater Midwest Chapter

April 20, 2011

Bob Lohfeld, Lohfeld Consulting Group

www.lohfeldconsulting.com

Webinar Presented to APMP Greater Midwest Chapter

April 20, 2011

Bob Lohfeld, Lohfeld Consulting Group

www.lohfeldconsulting.com

Copyright 2011 Lohfeld Consulting Group, Inc. All rights reserved.

The Traps That Lead to Poor Bid Decision-making The Traps That Lead to Poor Bid Decision-making

“Shoot for the moon, all we need is one really big win and we can sell the company!”- Entrepreneur

“We can win that deal because this is our kind of work, so let’s bid and don’t worry that we’ve never met the customer.”- Technical Manager

“Let’s bid deals that have the highest probability of success because we don’t get any bonus money if we finish in second place!”- Capture Manager

“Let’s take a portfolio approach to deal selection to maximize the likelihood of achieving next year’s revenue number with a realistic investment in new business activities.”- Corporate Executive

“Every dollar we spend on new business acquisition is one less dollar that we have to spend on other competing priorities, so let’s bid the deals that don’t cost very much.”- Financial Manager

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The right questions: Should we bid and can we win? The wrong question: Would you like to do this work?

We should bid: Deals that fit our core competency, and Meet our financial objectives

We can win if we: Understand the customer requirements and objectives Can develop a sound solution that addresses real customer needs Have customer advocacy Favorable competitive environment Have a clear win strategy—technical/management and price Have the resources and time to pursue the opportunity

The right questions: Should we bid and can we win? The wrong question: Would you like to do this work?

We should bid: Deals that fit our core competency, and Meet our financial objectives

We can win if we: Understand the customer requirements and objectives Can develop a sound solution that addresses real customer needs Have customer advocacy Favorable competitive environment Have a clear win strategy—technical/management and price Have the resources and time to pursue the opportunity

Asking the Right Questions is KeyAsking the Right Questions is Key

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“They don’t know us, but we can introduce ourselves by sending them a proposal.”

“We can use this proposal as a training exercise.”

“You gotta play to win!”

“They don’t know us, but we can introduce ourselves by sending them a proposal.”

“We can use this proposal as a training exercise.”

“You gotta play to win!”

Traps That Lead to Making Poor Bid DecisionsTraps That Lead to Making Poor Bid Decisions

If they remember you at all, it will be as a loser.

You may make the customer’s “Wall of Shame” by having your trainees write and submit a proposal that was obviously done as a training exercise.

I can’t believe anyone would actually say this, but they do.

TIP

TIP

TIP

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Making the Bid Decision in Four StagesMaking the Bid Decision in Four Stages

Deal Qualification

Deal Pursuit Progress

Preliminary Bid Decision

Bid Decision Confirmation

Qualifying a deal: 7 factors

Improving your win probability

Commencement of pre-proposal

activities

After RFP release

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Strategic fit: Program focuses in core competency Proven past performance, experience,

management, processes, tools

Understand customer requirements and objectives Requirements are what the RFP

will say (SOW) Objectives are what the customer wants

you to accomplish by fulfilling the requirements (Goals)

Right solution Technical solution ”right fit” for client Past performance and experience in

related work Teaming partners available Program manager/key personnel, staffing

OK

Strategic fit: Program focuses in core competency Proven past performance, experience,

management, processes, tools

Understand customer requirements and objectives Requirements are what the RFP

will say (SOW) Objectives are what the customer wants

you to accomplish by fulfilling the requirements (Goals)

Right solution Technical solution ”right fit” for client Past performance and experience in

related work Teaming partners available Program manager/key personnel, staffing

OK

Deal Qualification Scorecard (Seven factors)Deal Qualification Scorecard (Seven factors)

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Customer advocacy You know customer; they know you

Competition favorable Can beat known competition

Financial objectives Start-up investment, expected revenue

and profits, ROS, EBITDA, DSO

Cost of Pursuit is affordable Capture, B&P, IR&D investments


Deal Qualification ScorecardDeal Qualification Scorecard

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Color code: Blue (excellent), Green (good, but could be better), Yellow (poor and needs much work), and Red (we don’t know how to begin)

QUALITATIVE DECISION MODEL

Pursuit Decision Factors Color Scale Assessment

1. Strategic Fit Blue

2. Understand the Requirement Green

3. Right Solution Blue

4. Customer Advocacy Green

5. Competition favorable Yellow

6. Financial Objectives Green

7. Pursuit Investment Green

Overall Assessment Light Green


Deal Pursuit ProgressDeal Pursuit Progress

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*Win probability considerations determined subjectively, but final win probability is objective evaluation

Blue = excellent Green = good Yellow = limited accomplishment Red = unable to accomplish

CAPTURE MANAGEMENT ASSESSMENT MATRIX

Win Considerations Month 1 Month 2 Month 3 Month X

1. Form capture team Yellow Yellow Green Blue

2. Understand customer requirements and objectives

Red Yellow Green Green

3. Develop prelim solution linked to customer objectives

Red Yellow Green Green

4. Position solution with customer Red Yellow Yellow Yellow

5. Assess competition Red Yellow Green Green

6. Develop win strategy Red Yellow Yellow Green

7. Build team and sign teaming agreement Red Yellow Green Green

8. Set price to win Red Red Red Yellow

9. Assess risk Red Red Yellow Yellow

Capture review overall assessment* Red Yellow Green Green


Pre-Proposal Preparation DecisionPre-Proposal Preparation Decision

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Blue = excellent, Green = good, Yellow = limited accomplishment, Red = unable to accomplish

PRE-PROPOSAL PROGRESS ASSESSMENT

Considerations Month 1 Month 2 Month 3 Month X

1. Assign proposal manager and proposal resources Yellow Yellow Green Blue

2. Establish capture/pre-proposal repository Red Yellow Green Green

3. Develop strawman RFP Red Yellow Green Green

4. Review solution against RFP Red Yellow Yellow Yellow

5. Review/approve storyboards Red Yellow Green Green

6. Identify and develop early-stage proposal products

Red Yellow Yellow Green

7. Draft oral presentation Red Yellow Green Green

8. Finalize proposal development plan Red Red Red Yellow

9. Plan kickoff meeting Red Red Red Yellow

Pre-proposal stage overall confirmation Red Red Red Yellow


Bid Decision ConfirmationBid Decision Confirmation

BID DECISION ASSESSMENT

Considerations Month X

1. No surprises in RFP Blue

2. Proposal team fully and properly resourced Blue

3. Sufficient time available to produce winning proposal Blue

Overall bid decision confirmation Blue

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Bid decisions are made early using the seven factors in the qualification scorecard

Quality is built into the pursuit process by focusing on nine success factors

Bid decisions are reaffirmed when pre-proposal work begins—increasing your likelihood of success

Final thought—you will always be remembered for the deals you win, not the deals you chased… Bid to win!

Bid decisions are made early using the seven factors in the qualification scorecard

Quality is built into the pursuit process by focusing on nine success factors

Bid decisions are reaffirmed when pre-proposal work begins—increasing your likelihood of success

Final thought—you will always be remembered for the deals you win, not the deals you chased… Bid to win!

Benefits of Making Bid Decisions CorrectlyBenefits of Making Bid Decisions Correctly

Deals that are not winners are discarded earlyTIP

Deal pursuit progress scorecard using 9 factors focus the pursuit effort on making the deal a winner and discards losers early in the processTIP

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About Lohfeld Consulting GroupAbout Lohfeld Consulting Group

www.lohfeldconsulting.com Follow us on Twitter: twitter.com/Lohfeldwww.lohfeldconsulting.com Follow us on Twitter: twitter.com/Lohfeld

Lohfeld Consulting Group specializes in helping companies create winning proposals. As the premier proposal services consulting firm focused exclusively on government markets, we provide expert assistance to government contractors in Capture Planning and Strategy, Proposal Management and Development, Capture and Proposal Process and Infrastructure and Training.

Contact Bob LohfeldCEO of Lohfeld Consulting GroupEmail: [email protected]: (410) 336-6264

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To bid or not to bid (APMP Greater Midwest Chapter Presentation) Bob Lohfeld 4-20-11