The first part of this four-part series on key issues related to your business development pipeline focused on validating opportunities in your pipeline. In this post, we turn our attention to capture related activities, specifically the role of internal gates.
Most organizations use some form of quantitative assessment to measure the likelihood of pursuing and winning a particular opportunity. The baseline for this assessment is related in almost all cases to your company’s ability to successfully secure the opportunity and the impact of a win or loss on corporate revenue projections. This quantitative assessment is often referred to as probability of win (pWin). pWin has become a common nomenclature across business to assess how likely it is a company will win an opportunity pursuit.
Unfortunately, many BD professionals rely solely on qualitative “guess work” to determine their pWin (e.g. “the customer hates the incumbent” or “incumbent’s workforce is dissatisfied”). We recommend a more calculated approach to determining pWin. (This post deals only in broad brushes. For more on a precise pWin calculation methodology, stay tuned for the fourth part of this series.) A critical first step is to set a confidence ceiling. The competitive landscape and complexity of modern capture activities requires a measure of caution is success estimations. Unless you are tracking a made-to-order sole source opportunity, pWin confidence should be capped at 85% confidence. Of course, you must also set a pursuit floor in order to ensure efficient resource allocation. If an opportunity begins to fall below 40% confidence, it is time to assess the business case and reconsider the amount of resources you are placing against that opportunity.
With that framework in place, we begin our internal gates review. Gating your opportunities is a resource management exercise. Using predetermined milestones and scheduled reviews, you push your capture teams to answer critical questions and deliver on key milestones. A typical processes will have 4-5 gates (different companies call them by different names, but you can use this as a framework).
Prospecting (1-3 Years Prior to Expected RFP Release)
Key Milestones: Strategic Planning, Buying Influence Intelligence, Business Fit, Capture Team Assignment
Deliverables: White Papers (when appropriate), Probable Competitors List, Capture Budget
Keys to Passing this Gate: Does the opportunity fit within your company’s strategic goals? Just because your company has done that particular activity in the past does not mean you should add the opportunity to your pipeline. A previous award may have been a one-off pursuit based on a skillset that has since been lost. You may have also decided drop a specific line of business or determined that specific opportunities are no longer worth the resources. Make sure you communicate with your capture teams so they know where the company is going and can identify and track the right opportunities.
Pursuit (1 Year to 6 Months Prior to Expected RFP Release)
Key Milestones: Black Hat Review, Price to Win Analysis
Deliverables: Preliminary Solution Identified, Detailed Capture Plan, Competitive Analysis
Keys to Passing this Gate: Given the competitive landscape, is the opportunity financially viable for your company? Depending on the scalability of your business, you may not have the flexibility to compete in a heavily cost-weighted acquisition. At this gate you need to determine the structural, contractual, and financial mechanisms that will allow you to work at acceptable margins. It is your responsibility to evaluate the competitive landscape and determine if your company has either the technical or cost strength (or both) to withstand the realities of today’s acquisition landscape.
Target (6 Months Prior to Expected RFP Release)
Key Milestones: Draft RFP
Deliverables: Draft Proposal Resources Plan, Build-Out of Questions (from Draft RFP), Executive Summary Draft, Capability Gap Analysis (Based on Draft RFP)
Keys to Passing this Gate: Based on the Draft RFP, does the opportunity still fit your company’s operating model? If 90% of your work is services-based and the opportunity requires pre-positioned product deployment, it makes little sense for you to prime the response. At this point a Prime/Sub determination should be made to assess the opportunity based on whether your best value is as a prime or subcontractor. Weigh your decisions on where you are headed as an organization. If your plan is to build and grow an in-house development process you may want to sub first to get the experience or outsource product development as an integrator.
Bid (RFP Release to Proposal Submission)
Key Milestones: Kick-Off Meeting, Final Solution Review, Staffing Plan, Proposal Reviews
Deliverables: Proposal Management Plan, Final Teaming Agreements, Color Team Drafts, Final Submission
Keys to Passing this Gate: One the RFP is released a gate should be performed to assess if there are any game changers that would lead you to assess the opportunity as a No-Bid. Despite the best capture efforts there can be unforeseen factors (such as required certifications, experience requirements, etc.) that can show up in the final RFP. This can be a hard decision, especially if you have been developing your capture for 1-3 years. In most cases you spend a majority of your capture budget once the RFP is released and you are utilizing internal and external resources to develop your proposal.
Post-Bid (RFP Submission to contract Award)
Key Milestones: Answers to Government Questions, Orals, Proposal Revisions, Contract Award
Deliverables: Lessons Learned Report, Response to Final Questions, Orals (when applicable), Final Proposal Revisions, Negotiated Contract, Debrief Report, Protest
Keys to Passing this Gate: When the proposal is submitted your job is not done. You may need to begin preparations for oral presentations, respond to questions about your proposal, or develop a best and final offer. Keep in mind that this can be just as tedious as the bid phase. While these are typically performed in smaller, more focused, teams you should never pull back necessary resources to respond to this phase of the process. In this phase you have been down-selected and the customer is interested in your offer. The bear is in the doorway, it’s time to get it in the cabin and close the door.
A key to remember through the gating process is that it is an evolution of bid intelligence. As time passes your pWin will fluctuate up and down as you identify more and more information. They key is to maximize your pWin ahead of the final RFP being released. This will provide your organization the lowest possible business risk in pursuing an opportunity.
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Kyle Green (email@example.com) leads the federal business development practice for Mythics, Inc., an award-winning Oracle implementation and customization firm.