MASTERCLASS: LAURA RICCI ON IMPLEMENTING GO/NO GO PROCESSES

Transcription

1 Vault One: One: The The Planning Planning Vault Vault MASTERCLASS: LAURA RICCI ON IMPLEMENTING GO/NO GO PROCESSES

2 I questioned Laura Ricci, the author of The Magic of Winning Proposals (my favorite proposal- related book) and a mentor of mine, on the value of Go/No Go forms and what proposal managers can do to help implement formal Go/No Go procedures at their firms. Here's what she had to say... DO YOU KNOW ANY DESIGN OR PROJECT MANAGEMENT/CM/PMO FIRMS THAT STRICTLY USE A GO/NO GO FORM EVERY TIME? Yes. Every large engineering firm does: Lockheed Martin, Boeing, URS (the one I designed), KBR, GRI, Parsons, etc. Here's why. Proposals are expensive. For major firms, $100k to $1.2M are standard operating procedure. So, in order to get the resources (hours of the proposal team and the subject matter experts) you have to get approval from someone. Large firms can't let everyone run after everything they think is a good idea, or they'd be bankrupt. By using a Go/NoGo worksheet, the process can be escalated as high as needed without having repetitive meetings. In most of these firms, the approval comes from various levels depending on what you are doing, and sometimes more than one unit gets to weigh in. Ergo, a worksheet can be sent around to all the key players. Without it, whoever wants to run after the opportunity spends too much time recruiting resources. Once we had a solid Go/NoGo in place, we would begin work on the proposal while the worksheet made the rounds. But we didn't lift a finger without a decent Go/NoGo. Most of these firms also embed the Go/NoGo into the personnel files of the players so they can ID promising talent, and reward rainmakers. It only takes 5-6 Go/NoGos and the final results of the proposals produced, to know who you should allocate more resources to, and whose thinking about business development is flawed. Small firms do this by the seat of their pants. The magic size is probably 200 full time employees. If you don't have it in place by then, the firm will be sold to a competitor, in my opinion, because they probably also don't have other systems in place that keep control of resources so they aren't spent on losers and other worthless endeavors.

3 Once overhead is out of whack, the firm is headed for failure. Spending overhead writing losing proposals gets overhead out of whack pretty fast. WHAT'S YOUR TAKE ON WHY PEOPLE MIGHT HAVE TROUBLE WITH THE FORM APPROACH? They might have trouble with the form approach because there is no need for it. Small firms don't need it. The team does a gut check and that's either good enough, or they go bankrupt in a few years. Medium size firms might not have a centralized proposal team and it is more obvious if someone is bad at picking opportunities, so the principals can rein them in soon enough. In a large firm, systems are so important. I can use the lack thereof to predict who will be sold and who will be buying up competitors. HOW DISASTROUS WOULD IT BE FOR FIRMS TO ADOPT A SIMPLER APPROACH? It depends on what the principals of the firm are planning to do. If you plan to pass down a smallish firm to a family member who is embedded in the firm, there's no need. If you plan to sell for the value of the real estate owned and equipment, there's no need. But if you intend to grow the firm, you have to understand that a lack of systems predicts failure of professional service firms at about 300 full- time employees (i.e. bankruptcy/sold to competitors). A good friend of mine consults with small firms, and he considers systems so critical that he starts building them within a few years of founding the firm. His track record is so fabulous that I can't really argue with his approach. He would definitely urge a Go/NoGo worksheet way earlier than I see in the industry today, but his clients are destined to succeed. Now that I am thinking about it, an engineer who was in one of the large firms I worked for, went out on his own. He used the entire "Magic of Winning Proposals" process, forms and all. He is now at 50 full- time employees, and thanks me every time he sees me for the proposal training I gave him. Did he need to do this? I don't think so, but he grew his firm pretty fast from nothing, and he is convinced the systems helped. He says it kept him from moving on opportunities before he stepped back and took a moment to be more strategic.

4 If the principals intend to buy other firms and merge them into their own, you can't do that without systems in place and part of the culture. Otherwise the first buyout becomes dangerous as everyone continues doing whatever they did before, whether or not it works, because they don't really know for sure what works. Politics instead of profits rule in those messes. And then they get organized, go bankrupt or get bought. As they say, "What gets measured, gets managed." When I'm hired, the principals are looking for one thing: Win Work. The first thing I do in a turnaround is install the Go/No Go constraint. The folks in the middle scream and complain, but the principals are amazed when they see what shows up on the Go/No Go. It is illuminating to see what they were wasting money chasing until using a Go/No Go system. Unfortunately, proposal teams may or may not have management buy- in. The Go/No Go isn't worthwhile if the only people doing it are the proposal professionals. We develop our intuition after a few years and know the difference between worthless and pretty good opportunities. The Go/No Go form has two purposes: document why/how the opportunity is a good one, and teach people what they need to do to develop an opportunity into something likely to win. The fastest way to raise the hit rate 20 percentage points is to stop writing losers. That is, identify the losers before you write them, and don't waste a minute mourning them. WHY ARE SLOW OR LATE GO/NO GO DECISIONS PROBLEMATIC? First problem: Go/No Go should be finished by the time the RFP comes out. When folks are reading the RFP to decide whether or not to respond, the winners are already at work on the proposal. If you look over the questions, most of them can/should be answered before the RFP is out. Second problem: My career was built on turnarounds. The firms on which I built my reputation were hurting enough that they were willing to overhaul their approach to get back on track. Many firms are not willing to do the heavy lifting until things get seriously threatening. The work I did is not for everyone.

5 That said, my approach works, and works fast. I immediately raised hit rates by 20 percentage points by introducing and using Go/NoGo worksheets so we could stop writing losers. With that bit of air, we could start to raise the level of competence in their business development and marketing. Then I'd raise the hit rate to the industry standard (for large architecture and engineering firms, that is about 72 percent), reduce costs and raise the strategic approach so they could stay ahead of the curve. The end goal is to have and use the Go/No Go process to make life easier and win work. HOW CAN PROPOSAL MANAGERS BE CREATIVE WHEN TRYING TO SOLVE THIS CHALLENGE? Proposal teams should be the most creative group in the place. If you want to improve results, you need to be bold and willing to try new things. Repeat the things that work, and refine the most valuable ones so they become embedded in your culture. Here's one idea I used to bring proposal process into a smaller group (and we tried lots of stuff, some of which failed, and others which were lesser or greater successes): My first proposal team served a single office of 80+/- engineers. We had a Go/No Go worksheet, and the way we supported it was with our scheduling board. We broke the schedule for a proposal into blocks of time that would be required for the proposal at hand (i.e. storyboards, resumes, project experience, work plan, etc.). When a proposal came in, the blocks were put up on the board, working around other proposals scheduled for that same period. When a date was filled, we had no more capacity. Activities other than proposals also went on the board. The board was on display where anyone could see it. To teach security (and make it mystical, because marketing is "magic" to engineers), no names were on the board, only codes designating the activity, so passersby could only tell that we were running out of capacity. It became a ritual for a subject matter expert leading a proposal to come to the board where the proposal coordinator broke their proposal into appropriate sized blocks for the RFP at hand, and found empty slots that would correspond to the availability of the proposal manager as well as the proposal team. To get on the board, you had to have a Go/No Go worksheet completed. Folks working on an opportunity would finish up their Go/No Go worksheet so they could bring it in as early as possible to get on the schedule board. When someone came in with a late request, they had 4 options:

6 1. Ask someone else to cancel their proposal so yours could go on the board in their place 2. Plead to the Vice President to force your proposal onto the schedule (and I would arrive with the Go/No Gos for the other competing proposals so we could compare the opportunities and decide whose proposal should be cancelled) 3. "No Go" your own proposal and market so you were ready earlier for the next opportunity 4. Do it by yourself (part of our internal marketing was demonstrating that we raised the hit rate by 30 percentage points over the homemade proposals the engineers produced on their own, so no one wanted to do all that work and lose). The engineers howled. They screamed that the firm was being mean to them by restricting resources. But a few months earlier, they had no proposal team whatsoever, so they were welcome to do what they'd done before, work up their own proposals. Of course, the difference was stark, and no one wanted to do it the old way. Within a year, the new folks knew the system, and had never done a proposal by themselves and didn't want to spend their weekends trying. And the original staff seemed to forget that they'd ever done it any other way. Within 2 years, there was no corporate memory of engineers writing and publishing their own proposals. It was a story only told at retirement lunches. Note: The schedule board did its job and was ready for retirement about a year after we installed it. Then I had to deal with the howls and whining that the engineers wanted to keep the board up and continue the ritual of posting their proposal to a board in the open. Every process should be checked and measured. When it no longer makes a difference, it needs to be removed so you don't become stifled by your own bureaucracy. HOW DO YOU DEMONSTRATE THE VALUE OF A WHEN YOUR FIRM HAS NO EXPERIENCE WITH THEM? Here's an example. This was in California, and we were required to pay overtime to proposal staff, something that wasn't in the budget. So my Vice President was motivated to help me manage the schedule. I had very little or no support to install processes. I didn't have statistics yet to prove any of this was worthwhile. Every bit of the process I installed was considered revolutionary, no matter what references I had, because "We are different," "We aren't like them," "We require xxx unlike them."

7 I kept good records, so we could measure the impact we were having (and stop doing what didn't work). Producing pretty proposals wasn't enough to earn raises for the proposal team, we had to show we were changing the bottom line. The next firm was in similar shape, but they also were having massive layoffs, so the need was urgent. They'd been unable to win work appropriate to their size and were competing against tiny firms. The overhead burden was impossible to justify, and that was a major part of their problem. When I arrived, this 3,600- person firm with 26 offices had never had a contract larger than $3M, and the average contract size was below $100,000. By the time I left 5 years later, the proposal team did not participate in any proposals under $500,000 and we'd won contracts up to $120 million, and were tracking opportunities to compete for contracts of $500M. My trainee is now a Vice President at URS, the firm that bought them out. That team is just about the only unit that survived the merger intact and was expanded to run all Must- Win contracts for URS. One of my trainees is also a Vice President at CH2M HILL, applying the same magic I describe in "The Magic of Winning Proposals." However, I know plenty of firms that can't commit to a process, and that leaves plenty of opportunity for proposal managers and coordinators to help.