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July 1, 2010

Bid Smartly . . . or Walk Away

By Bill Scheessele

With some industries reeling in today's economy, future revenue growth is still uncertain in certain markets. The bright exception is the "new energy" arena of renewables and sustainables. But that's a tough market, with lots of competitors for the business and lots of opportunities to misfire and miss the boat. A key to success is bidding smartly on contract opportunities. Otherwise, don't bid at all.

It's no surprise that the explosion in these energy opportunities comes with an expected increase in competition. If your organization's objective is one of revenue growth in this market, then you should focus on the concept of what our firm characterizes as "Opportunity Identification & Qualification based upon Intelligence gathering" (OI&Q)i.

For the record, we advocate and sell this approach to energy clients. We have skin in the game.

Our Opportunity Evaluation Technique

Our technique, (OI&Q)i, is not just a line item in an organization's business development process. Whether you are an established energy firm or a newly launched entrepreneurial venture, as it becomes more challenging to gain and maintain market share or grow revenue with mounting competitive pressures, this concept may be the most critical, pre-pursuit decision point. That's because, when you're faced with a prospective opportunity, you need to eliminate emotional judgments to respond to bid on a request for proposals or walk away from it. The (OI&Q)i process presents a deliberate set of quantitative and qualitative questions for the business development team to use when assessing an opportunity.

• First, has your team invested the time to fully understand the opportunity and gathered critical intelligence on this project from the key decision-making people involved? Have they previously met with the customer, and by asking hard questions built a trust relationship? Does your team understand all aspects of the objectives for the project from the customer's perspective by gathering first-person intelligence from them? Has your team invested time before any bid announcement to discuss current and future issues, and discovered some of the real challenges facing the customer?
• Second, does this opportunity match up well with your organization's core capabilities and experience? Do you possess the necessary credentials to do the job, and do it right? If it's not an exact match, does this opportunity represent a strategic decision to consider building a new business unit in an adjacent segment? Or does it make sense for your firm to seek an acquisition partner with the necessary capability?
• Third, does your business development team possess sufficient resources and bandwidth to "pursue it right," assuming there's a real likelihood of winning the business? A client recently shared a point of view on this, noting the use of qualitative criteria in addition to quantitative intelligence in the decision-making process was of utmost importance. This scrutiny allowed the team to decide on the probability of winning the business in a manner that was objective and free of emotional bias.

It all comes down to the strategy of bidding smartly, that is, asking the hard questions up front and disqualifying opportunities early on as part of the business development strategy.