Taking Metrics to the Next Level – Historical Trivia or Dynamic Strategies for Success? 2014 Mid-Atlantic Conference & Expo Sheraton Premiere Tysons Corner Howard Nutt, CF APMP Fellow Director APMP Center for Business Development Excellence

Quick Poll #1 (Participant Ratings) On a scale of 1-5…  How important is it to measure performance in achieving stated goals?  How useful are your company’s BD metrics?  To what extent do your company’s BD metrics influence what you actually do? Mid-Atlantic Conference & Expo

Agenda  Introduction  BD Metrics Knowledge Base  Tactics for Improving Performance  Strategies for Next-Generation Capability  Conclusion – Where to Go from Here Mid-Atlantic Conference & Expo3 Notes: References to BD-CMM = Capability Maturity Model® for Business Development CMM is registered in the US Patent and Trademark Office by Carnegie Mellon University Notes: References to BD-CMM = Capability Maturity Model® for Business Development CMM is registered in the US Patent and Trademark Office by Carnegie Mellon University

Metrics Used by APMP Members Sales Pipeline Statistics Win Rate Lessons Learned Utilization of Knowledge Database External Customer Satisfaction Capture Ratio Internal Customer Satisfaction Cost Effectiveness Cycle Time Bid & Proposal Budget “Top 10” BD Metrics Used by APMP Members Extent of Use, Percent Mid-Atlantic Conference & Expo4

Problems with Current Metrics Use  Over-reliance on “win rate” as primary metric –Compounded by poor definition of what to include –Often focused only on current year with little trend analysis  Lack of direct connection to results –Typically limited to “point-in-time data” with no follow-through –Usually measuring symptoms, not causation  Inability to influence organizational behaviors based on metrics data –Little ownership or accountability felt by BD process stakeholders –General sense that executives don’t understand implications Mid-Atlantic Conference & Expo5

Role of Metrics in “New Normal” BD metrics should give information to:  Guide and manage overall BD operations –Develop and improve competitive position –Analyze or make investment decisions  Guide, manage, & improve BD processes –Identify areas for improvement efforts –Create or increase accountability  Track and manage BD projects –Manage the use of resources –Analyze and make decisions about trade-offs Mid-Atlantic Conference & Expo6

Agenda  Introduction  BD Metrics Knowledge Base  Tactics for Improving Performance  Strategies for Next-Generation Capability  Conclusion – Where to Go from Here Mid-Atlantic Conference & Expo7

Top Five Metrics Reported Five metrics consistently appear in “Top 10” –Status of top opportunities –Competitive win rate –Revenue compared to target –Total revenue in funnel –Expenses compared to budget Note: Analysis compared top-10 lists of metrics used in (a) large, complex corporate settings, (b) mid- to large-size companies, and (c) small businesses T5T5T5T5 T5T5T5T5 T5T5T5T5 T5T5T5T5 T5T5T5T Mid-Atlantic Conference & Expo8

General State-of-the-Art High-performing BD operations more likely characterized by:  More disciplined approach to periodic review of metrics  Greater reliance on leading and in-process metrics  Higher levels of upfront spending  Increased use of metrics to measure the performance of individuals within the organization during BD activities  Increased use of formal processes to encourage innovation as part of BD approaches  Greater occurrence of metrics being embedded and documented –Prior existence of processes and procedures a prerequisite  Greater accessibility of metrics data within the organization  Reportedly increased value of metrics  Improved cooperation between workgroups in the organization Mid-Atlantic Conference & Expo9

Value of Metrics Legend: Not Valuable at All Not Very Valuable Neutral Valuable Very Valuable As BD capability increases, BD organizations ascribe progressively more value to metrics Mid-Atlantic Conference & Expo10

Resources Applied to Metrics Legend: % 51-75% 26-50% 11-25% 0-10% High-performing BD organizations are more likely to dedicate resources to metrics collection and analysis Mid-Atlantic Conference & Expo11

Metrics Perspectives Maturity Metrics Perspective Uses Confirmed Relationships Between Variables to... High (Level 4-5) Leading Predict future behaviors, events, or other types of long-term outcomes Mature (Level 3) In-Process Track and diagnose current behaviors, events, or other types of short-term outcomes Low (Level 1-2) Trailing Explain past behaviors, events, or other types of historical outcomes BD maturity influences how metrics are used Mid-Atlantic Conference & Expo12

Quick Poll #2 (Participant Ratings) On a scale of 1-5…  To what extent does your organization use “trailing” metrics to analyze historical performance?  To what extent does your organization apply “in-process” metrics to control current performance?  To what extent does your organization leverage “leading” metrics to predict outcomes? Mid-Atlantic Conference & Expo

Agenda  Introduction  BD Metrics Knowledge Base  Tactics for Improving Performance  Strategies for Next-Generation Capability  Conclusion – Where to Go from Here Mid-Atlantic Conference & Expo14

Emphasis on Affecting Outcomes Top Five MetricsDefinition / Goal Key Issue for Influencing Results Competitive Win Rate Track results of competitive pursuits, often both win rate and capture ratio Apply historical lessons learned and root-cause analysis to improve future performance Status of Top Opportunities Assess the “health” of strategic pursuits for readiness and P WIN Take action in response to health assessment to improve P WIN Revenue Compared to Target Track results of completed pursuits against revenue goals Identify additional revenue opportunities to fill gaps Total Revenue in Sales Funnel Assess value of programs being pursued, typically weighted by P WIN Maintain qualification criteria that fit the organization’s business Expenses Compared to Budget Maintain visibility on BD project costs based on budget milestones Keep weak projects from depleting funds needed for strategic pursuits Mid-Atlantic Conference & Expo15

Win-Rate Re-Oriented to Results Mid-Atlantic Conference & Expo16 Win Rate and Capture Ratio Strategic Growth Programs Large, Core- Business Programs Incremental Growth Programs Task Order Vehicles Set targets based on “roll-up” from detailed analyses Allocate resources based on P WIN or prioritization Define strategy, using full range of process resources Set “stretch” targets based on historical results (>50%) Allocate resources based on return-on-investment Define strategy, using reasonable process resources Set targets based on historical results (>75%) Augment program resources only on exception basis Support strategy development, if deemed appropriate Set revenue targets based on competitive analysis Establish marketing plan, with resource allocation Assign pursuit management team, as appropriate

Agenda  Introduction  BD Metrics Knowledge Base  Tactics for Improving Performance  Strategies for Next-Generation Capability  Conclusion – Where to Go from Here Mid-Atlantic Conference & Expo17

Capability Basis for Results Mgmt Win Rate Capture Ratio Win Rate Capture Ratio Win Rate Capture Ratio BD-CMM Level-1/2BD-CMM Level-3BD-CMM Level-4/5 Legend: Win Rate = Number of Projects Won  Number of Projects Bid Capture Ratio = Value of Projects Won  Value of Projects Bid Legend: Win Rate = Number of Projects Won  Number of Projects Bid Capture Ratio = Value of Projects Won  Value of Projects Bid BASE 30-35% Decrement Typical 30-35% Increase BASE % Increases Reported Mid-Atlantic Conference & Expo18

CMM® for Business Development Mid-Atlantic Conference & Expo19

Metrics based on BD-CMM BD-CMM emphasis:  Metrics applied to each Process Area (PA)  Measurements on status and effectiveness of activities performed Use metrics to:  Measure status of activities and predict results  Assess process efficiency and effectiveness  Gauge the contribution of BD organization to the business and/or enterprise Mid-Atlantic Conference & Expo20

BD-CMM Metrics “Dashboard” Mid-Atlantic Conference & Expo21 Customer Metrics Leadership Metrics People Metrics Support Metrics Low Maturity Baseline High Maturity Process Management Metrics Responsiveness Collaboration Relationship CUSTOMER Awareness Discrimination Intelligence COMPETITIVENESS Oversight Direction Integration OPERATIONS Recognitions Incentives PERSONNEL GROWTH Skills Competencies Teamwork STAFFING CAREERS Projects Process Performance PROCESS Standards Improvements Data Feedback QUALITY Environment Infrastructure Integration INFRASTRUCTURE Re-use Knowledge Exploitation RESOURCES Win Rate Capture Ratio System Performance and Forensics  Results by opportunity category  Results by business area or group  Results by market and/or customer  Correlations by process lessons learned  Other analyses, as appropriate MEASURE ANALYZE IMPROVE

Concept of Metrics “Program” Mid-Atlantic Conference & Expo22

Agenda  Introduction  BD Metrics Knowledge Base  Tactics for Improving Performance  Strategies for Next-Generation Capability  Conclusion – Where to Go from Here Mid-Atlantic Conference & Expo23

Activating Results-Oriented Metrics 1.Define goals to be achieved or supported through your metrics program 2.Consider the relative maturity of the organization and its ability to implement and maintain metrics 3.Structure metrics to link directly to results 4.Establish an appropriate infrastructure for collecting, analyzing, and reporting data 5.Allocate resources and define accountability 6.Maintain and improve the metrics program through on-going lessons learned Mid-Atlantic Conference & Expo24

Questions and Brainstorming Mid-Atlantic Conference & Expo25

Thank You Howard Nutt, CF.APMP Fellow Director Center for Business Development Excellence Mid-Atlantic Conference & Expo26