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FMI Quarterly/March 2012/March 1, 2012

Stop Chasing All That Work

DEPARTMENTS: BUSINESS DEVELOPMENT

It’s counterintuitive — our teams are so busy chasing work they are missing the very opportunities they should be winning. Worse yet for the industry, it is wasting millions of unnecessary dollars and countless hours of time. To win work, you have to stop chasing all of it.

BIG STEPS FORWARD

If you want to win more work, you need to engage the whole company. Rethink your employees’ roles so they have the time to build relationships, get rid of unnecessary time wasters for your business development people, and teach your senior people how to become rainmakers.

Creating a customer-focused culture is the right thing to do. It helps you take advantage of the benefits to be gained from functional silos, while staying focused on the fact that without customers to work for, being able to design and build amazing structures is fruitless. Do not give it lip service; actually create the culture. The customer can tell the difference between lip service — and all industry firms are saying they focus on customers — versus delivering the goods on culture.

Teams are shifting to a seller-doer model to help bridge the cultural gap between operations and business development in order to put work acquisition at the forefront. The message needs to get to project managers, field managers, estimators and even internal administrative/support staff. Everyone must focus on meeting the needs of the end customer to stand out from the crowd. You must drive it into your culture by changing the customer interface expectations and compensation of crucial roles.

CLOSE, BUT NOT QUITE THERE

2012q1_department_chasing_ex1Get serious about which customer and project you target. Look at your last five proposal/RFP opportunities. Did you really give the client a business reason to pick you besides price? Develop a rating system, such as the one shown in Exhibit 1. What score would you give each opportunity? Better yet, rate the last 20 or 30 opportunities. Determine the median score. Dig into the facts to see what the score tells you. If you have an average between 2.5 and 3.5, you are spending a lot of money and coming up second too many times. Some jobs warrant your “best effort”. Others demand a unique approach. The key is starting with a candid rating.

Get your team engaged and get a dialogue going. Be ruthlessly honest in your assessment. Better yet, ask the prospects you lost. Did they see something that could have added enough business value to put your team and approach into a winning position? Could you have sold that difference better? For the winning projects, the question might become, “What added enough business value to put our team into a winning position?” Ask them on the projects you won too! The response from customers can be quiet humbling. “It is what we expected” or “we trust you” are not rousing endorsements of your creative talent.

Too often clients receive approaches that are compliant, which only lumps those contenders into a big pile of “pretty much the same”, or “discard” or “pick the low-price choice”. If you get anywhere near that pile, you better find many ways to get your costs down if you want to win the work. Give them a strong business reason to pick you or else you only have two choices: Either cut your price or do not bid the project. If the only thing that distinguishes you from the competition is a low price, either by actually having a strategy that allows you to deliver the project cheaper or by inadvertently leaving something out of the scope, do not complain after the fact that the only real differentiator was price.

If the customer truly is going to buy on price and price alone, great! Make a business decision if it is worth your time to play that game or not. If it is, get in and be competitive. But do it in ways that are not adding unnecessary cost to the chase or committing your best people. If not, thank the customer for saving you a bunch of time and ton of money and go looking for a better opportunity. The challenge is not having too few potential projects to chase; it is having enough of the right projects to chase.

Do not blame potential clients for your wasted time and effort chasing a lost project. You were the one who decided to chase it. They truly have no idea of the staggering costs and time commitments invested in the process. It is in their economic best interest, however, to have you chase the work with the rest of the pack. Take back the control and make better business decisions about what opportunities to invest in and which ones to pass on. Decide which opportunities only warrant a “qualified response” and which need to be a unique chase and a creative solution. Bottom line, you cannot afford to go all out on all project opportunities. Some opportunities simply do not justify that much of your time and interest; but others do. You must have objective ways to tell which opportunity is which.

Ask the customers where you missed on the proposal. They frequently do not see anything in the approach that gave them much of an excuse to buy except price. You have to give them a business reason to pick you, unless you are the lowest price in the pack. They have to go back and justify their selection decision — internally, to their board, funding source, etc. To be compelling, the business reason needs to be more than simply that you have the expertise and people to do the project. Most of the other good contractors do too. You have to give them something of value to them and their organization.

2012q1_department_chasing_ex2Without a compelling reason to do otherwise, customers have proven a preference for picking a low price from the largest qualified contractors chasing the work. The winning project approach (see Exhibit 2) requires three simultaneous elements:

  • Meet project expectations
  • Deliver a competitive price*
  • Give them a unique reason to pick you

*Competitive price, by definition, is one where you will make money on the project but have an approach to the project that either gets you low or very close to it.

If you have two of the three, you will be close, but not selected. That is where, on a private project, four contractors all hear that they were second on the job. Being second is somehow an easier message to deliver and hear. But being second is simply being the first loser. It is close to first place, but you still lost the project. There is little honor in being second.

If you have all three elements, you give them a business reason to pick you. Be ready to back up your claims on delivered business value and you win.

It all starts with a clear understanding of the business purpose of the project and working back from there. You need to be pre-positioned before the proposal hits their door. Taking the safe approach on the project gets you quickly tossed into the discard pile. Swing for the fences and create an approach that grabs their attention, and the value of your approach is noticed.

CLOSE MORE OPPORTUNITIES

Winning more opportunities means first identifying the business value you will be bringing to the project. If you cannot identify or create one, you have a business decision to make: Either eliminate all the cost you can, or do not pursue the project. Push toward the latter strategy when you can. It simply saves time and money that desperately are needed for the right customers and projects. You cannot always pass on an opportunity; there may be strategic reasons why it makes sense. Truly, when is the last time you passed on an opportunity where the work fit your experience, you had the people and needed the work?

Teams that know the true cost to chase and win work tend to chase fewer opportunities, yet win more work.

Steps to winning the right work:

  • Get upstream and pre-positioned. Identify those customers and opportunities that you want before they go out for proposal or RFP. Meet the key players and get pre-positioned to win.
  • Get serious about your go/no go. Knowing which opportunities to chase is the simplest thing a go/no go does. It needs to be able to quantify how much to invest in the opportunity and be scalable for different project sizes and types.
  • Get real on your estimating costs and approach. You want to be competitive and make money on the project. You need to know your real-time estimating costs and structure your estimating team to win work.
  • Get a solid set of discovery questions. The more you understand the project from the customer’s perspective, the better chance you have in creating a unique approach that will deliver real business value. Get serious and develop a set of discovery questions that more of your people can use to find out the customer’s perspective and needs.
  • Get engaged in win strategy sessions. Engage your team in creating the strategy to win. At a minimum, answer these questions:
      1. Why should customers pick you over other good competitors?
      2. What are you offering that no one else can or will?
      3. What dollar impact will it have on the customer and its organization?
  • Get more impact in proposals and presentations. If you cannot communicate your message with pizzazz and confidence, you will have invested time and money for nothing. Deliver the message from the customer’s point of view. Answer the “so what?” behind your message (i.e., the benefits) of what you are doing for the customer. Stop talking like a contractor, engineer or architect and think like the customer.

STOP WASTING PRECIOUS TIME AND MONEY

Winning your fair share of work is a bit counterintuitive. You have to spend more time on the right opportunities and get time and cost out of the wrong ones, or better yet pass on them all together. If you cannot create a business reason for the customer to pick you, do not pursue it. Winning work, only to find out 18 months from now you lost money on, is a zany strategy that will painfully kill your company. Long before you ruin the company, you will have destroyed your best competitive advantage, your team. Stop wasting precious time and money chasing the wrong opportunities.


Cynthia Paul is a managing director at FMI Corporation. She may be reached at 303.398.7206 or via email at cpaul@fminet.com.

 

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