Don’t Bet the Farm!Why incumbents lose and how to avoid complacency

by leveraging decision gates and reviews.

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Definitions of Incumbent Merriam-Webster’s Online Dictionary:

• Main Entry: 1in·cum·bent

• Etymology: Middle English, from Anglo-French, from Latin incumbent-…to lie down on, from in- + -cumbereto lie down; …

American Heritage Dictionary, New College Edition: Incumbent

• Lying, leaning, or resting upon something else

YIKES!!!!

How Do We Increase Our Probability of Winning?

Key Questions During Incumbent Opportunity Assessment Is it real?

What is it?

Can we provide it?

Will the customer buy from us?

What is the budget?

How will it be funded?

What is the schedule?

Where will it take us?

Is it worth winning again? What is the cost?

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Initial Assessment of PWinCan We Win?

CAN WE WIN AS INCUMBENT?Access to Power • Who in the customer organization wants us to win?

• What have they done to indicate their support?• Are they willing and able to act on our behalf?• Is that person in power? Could that person be described as a power sponsor?• Has that person validated our proposed solution?

Customer’s Buying Vision

• Do we clearly understand the customers buying vision and evaluation criteria?• Do we thoroughly understand the buying process?• Did we help create or shape the requirements?• Are we aligned with the customer’s buying vision for this opportunity?

InformalDecision Making Process

• Do we know how the decision will really be made? • Do we understand unstated issues?• What intangible, subjective factors could affect this decision?• Whose private opinions do we know? Which ones count?

PoliticalAlignment

• Who are the most powerful people involved in this decision?• Do they want us to win? Why?• Are they able to influence or change the decision process?

Cultural Compatibility

• What is the customer’s culture?• How does there culture compare to ours?• What is the customer’s attitude toward vendors and suppliers?• Can we adjust or adapt if we need to?

Evaluation Plan • Do we know the evaluation plan?• Do we have a solution that will score well?

How Often Do Incumbents Lose?

Almost Never 10 % of the time

Infrequently 30% of the time

Half the time 50% of the time

Frequently Over 70% of the time

Washington Technology Business Beat: By Nick Wakeman, October 2012

“…During a later panel at the conference, which is co-sponsored by Ernst & Young and Washington Technology, Brad Antle, CEO of Salient Federal Systems described the competition for re-competes as a free-for-all.

‘Incumbents are losing because they have to bid the incumbent [and more expensive] workforce,’ he said. ‘They don’t come to the bid with a clean sheet of paper.’

The advantage has shifted to the challengers, who often can bring innovation, flexibility and new ideas that the incumbent cannot.

‘The biggest challenge for incumbents is to get out of their own way,’ he said.

For any company to grow in this market, they have to take business away from other companies. “You have to think that way,” Antle said. “You have to be creative.”

Incumbents Lose Too OftenEnough Said…

Why Does the Customer (B2B or B2G) Re-Compete?

Competition is required

New ideas – more efficiency

Lower price – budget cuts

Can’t justify sole source

Meet quotas

Politically (internal or external) time to change contractors

What Can an Incumbent Do?

Ask, Ask, Ask

Listen carefully to your customer

Treat every re-compete as if you’re the challenger

Make an OBJECTIVE assessment of your position

Begin preparation for the re-compete on Day 1

Assign a qualified capture manager

Throw away all “rose colored glasses!”

If You Wait Until It’s Too Late . . .

Tips on How to Bet the Farm and Lose

Bid the status quo – be protectionist – use a must-not-lose strategy

Describe the current process and solution as the best value

Provide minimal process improvement without "rocking the boat"

Describe "what the customer really needs and wants—not what the RFP asks for"

Present a vision of the past – write about how good it has been

Team only to limit competition

Rely on the “fear of transition”

Structure team and solution on the current effort and SOW

Tips for Winning the Bet Bid to win with innovative

strategies, technical and management approaches, and price

Define the NEW Best Value for the customer

Demonstrate new ideas and continuous improvement

Be responsive to the RFP/SOW

Present a vision for the future with relevant examples

Team to build the best team

Create a compelling reason for change

Structure the solution and team on the Evaluation Criteria first, then on the SOW

Don’t Be Tempted to Take Incumbent Shortcuts!

Hedge Your Bet by Leveraging Gate Decisions and Conducting Effective Reviews

Good Decision Gates Are Structured

•Identify category•Invite participants•Prepare inputs•Develop recommendations

•Limit presenters•Follow agenda•Eliminate opinion, bias, ego•Avoid over-focus on technical

solution•Identify decision-maker

•Contract value•Customer•Similarity to other work•Strategic impact•Corporate authority

•Executive•Operations•Business development

manager•Capture manager•Business developer

Roles Level

PlanningExecution

Understand Each Role

Role Executive OperationsBusiness

Development Manager

Capture Manager

Business Developer

PrimaryDuties

• Define• Decide• Lead

• Advise• Support

• Assign• Monitor• Collaborate

• Engage• Inform• Execute

• Customer Relation-ship

Tips for Success

• Know and support process• Communicate vision• Make gates a priority• Respond to facts

• Be proactive• Cultivate market knowledge• Be open• Be honest• Involve others between gates

Shipley’s Business Development ProcessPhase 0: Market Segmentation

• Divide market into segments with similar needs, characteristics

• Develop marketing approach aligned with customers’ expectations

Identify and analyze strategic market areas or customers

Decide to pursue market or customer

Phase 1: Long-Term Positioning

• Establish place in market

• Influence potential customers’ perceptions

• Prospect for leads

Decision to enter market

Decide a specific opportunity is of interest

Phase 2: Opportunity Assessment

• Research opportunity, customer, and competition to determine win potential

• Confirm alignment with capabilities and strategic direction

Decision to assess opportunity

Decide to pursue opportunity

Phase 3: Capture Planning

• Prepare, review, and implement capture plan to influence customer

• Move from unknown to known to preferred position with customer

Decision to pursue

Decide to plan proposal

Phase 4: Proposal Planning

• Refine solution and price to win

• Convert capture strategies into proposal messages

• Begin preliminary content planning

Decision to plan proposal Decide to bid

Phase 5: Proposal Development

• Make clear assignments

• Plan and approve content

• Draft proposal according to plan

• Review final proposal thoroughly

Decision to bid after RFP review

Decide to submit proposal

Phase 6: Post Submittal Activities

• Respond to customer

• Negotiate

• Revise proposal if necessary

Decision to submit proposal

Decide to accept or submit final offer

0 Market Segmentation

Campaign/Marketing

Is market niche congruent with goals in strategic plan?

1 Long-Term Positioning Interest Does opportunity merit expending resources to

research and assess it?

2 Opportunity Assessment Pursuit Should we commit resources to developing capture

plan and influencing customer to prefer our solution?

3 Capture Planning

Preliminary Bid

Have capture activities positioned us favorably enough with customer to justify planning proposal?

4 Proposal Planning

Bid Validation

Is opportunity still worth pursuing and proposal worth preparing, considering final details of RFP?

5 Proposal Development

Proposal Submittal

Should we submit completed proposal? Is programmatic risk justified by probable financial reward?

6 Post-Submittal Activities Final Offer After negotiations, is programmatic risk still justified

by financial reward considering terms of contract?

No. QuestionsGate Phase

Decision Gates for Key Opportunities

Effective Color Team Reviews

RESPONDCONDUCTPREPARE

Plan and schedule Identify members Train reviewers Develop in-briefing

Present in-briefing Review individually Discuss as group Report

Debrief staff Support team Distribute products Archive materials Execute and verify

Make reviews comprehensive, positive, and constructive.

Color Team Reviews

0: Market Segmentation

Gate 0. Campaign/Marketing: Establish market directions, determine desired capabilities, resource mix

1: Long-Term Positioning

Gate 1. Interest: Determine whether opportunity fits well enough with strategic direction, capabilities, and resources to justify further assessment

2: Opportunity Assessment

Gate 2. Pursuit: Decide whether to continue pursuit by attempting to influence customer to prefer your solution through active capture planning

3: Capture Planning

Gate 3. Preliminary Bid: Decide whether capture planning has improved position enough to justify proposal planning

Blue Team: Reviews capture planning, opportunity description, customer relationship, and conceptual solutionBlack Hat: Predicts competitors’ solutions to support strategy development and infuse proposal with a competitive focus

4: Proposal Planning

Gate 4. Bid Validation: Confirm whether win probability is high enough to justify proposal development considering all aspects of final solicitation

5: Proposal Development

Gate 5. Proposal Submittal: Determine whether final proposal adequately presents a solution and price acceptable and advantageous enough to justify submission to the customer

Pink Team: Reviews storyboards and mockups for execution of win strategyRed Team: Reviews proposal to predict scoring and improve effectivenessGreen Team: Reviews pricing, consistency across volumes

Gold Team: Reviews final proposal and price

6: Post-Submittal

Gate 6. Contract Approval: After negotiations, determine whether the programmatic risk is still justified by the financial reward?

White Team: Documents lessons-learned to improve capture and proposal processes

Decision Gates and ActionsPhase Color Teams and Purposes

0: Market Segmentation1: Long-Term Positioning

2: Opportunity Assessment

Purple Team: Review opportunity assessment report for alignment with organizational capabilities and qualifications

•Opportunity Review

3: Capture Planning

Blue Team1: Review initial capture plan, conceptual solution Black Hat1: Early prediction of competitors’ solutions supports capture strategy refinement

•Solution Review•Competitor Review

4: Proposal Planning

Blue Team2: Approve updated capture plan for use in PMP and kickoff packetBlack Hat2: Predict competitors’ solutions as competitive intelligence improves, infuse proposal with competitive focusPink Team1: Pre-RFP review of storyboards and mockups to verify alignment with capture strategyGreen Team1: Review the price-to-win

•Strategy Review

•Competitor Update

•Writing Plan Review

•Price-To-Win Review

5: Proposal Development

Pink Team2: Post-RFP review of storyboards and mockups to verify alignment with RFP Red Team: Review proposal to predict and improve scoringGreen Team2: Review final pricing Gold Team: Review final proposal

•Proposal Readiness Review•Proposal Quality Review•Final Price Review•Final Proposal Review

6: Post-Submittal

White Hats: Review lessons-learned to improve capture and proposal processes

•Lessons-Learned Review

Color Teams and PurposesPhase Functional Name

Functional Names

Factors• Time available

• Size, risk, importance of opportunity

• Number of people involved

• Commitment

Design or Adapt Your Process Intelligently

Constants• Disciplined

business development process

• Standardized decision gates

• Formal color team reviews

Variables• Number of phases

• Number of gates

• Number, type, standards for color teams

• Number, type, size of documents reviewed

How Can You Increase Your Probability of Win?

Summary: Don’t Bet the Farm Don’t get lazy as the incumbent Remember the 3 Cs

• Customer – Know them and build a relationship• Competitor – Take nothing for-granted; do your homework• Company (You) – Make smart decisions

Understand How the Customer Buys: Now versus original acquisition Leverage Decision Gates and Reviews

• Phases – Know where you are in the process• Decision Gates – Use discipline in bid and pursuit decisions• Conduct Effective Reviews• Don’t be afraid to “no bid”

Contact Information:Ed Alexander, CPP APMP FellowVice President, Shipley Associates

888.772.9467 (WINS)

egalexander@shipleywins.com

www.shipleywins.com