The Decline of the Incumbent Empire: Rebid Strategies

APMP BID & PROPOSAL CON 2015 | PAGE 2 The Decline of the Incumbent Empire: Rebid Strategies LISA PAFE, LOHFELD CONSULTING GROUP

APMP BID & PROPOSAL CON 2015 | PAGE 3 Agenda  The Challenge  Perspectives  Capture Phase  Proposal Phase  Bring Home the Win

APMP BID & PROPOSAL CON 2015 | PAGE 4  Incumbents are losing more often  Still, best informed wins, so:  How does the challenger overcome the incumbent’s advantage?  How does the incumbent maintain their advantage? The Challenge

APMP BID & PROPOSAL CON 2015 | PAGE 5 Same customer, same workSame customer, different work Same work, different customerDifferent work, different customer Incumbent’s Perspective Incumbentitis: False sense of security, complacency, and over-confidence that results in failing to take the proposal process seriously and thus losing the rebid

APMP BID & PROPOSAL CON 2015 | PAGE 6 Challenger’s Perspective  Often over-estimate the incumbent advantage  Assume they can never gather the needed business intelligence to compensate  Think the only way to beat the incumbent is low price  Often under-prepare  Rely on rumors about incumbent’s poor performance instead of gathering real business intelligence  Read the ashes instead of setting the fire

APMP BID & PROPOSAL CON 2015 | PAGE 7 Pros of Incumbent:  No transition  Low risk  No mission impact  Keep the same people Customer’s Perspective Cons of Incumbent:  More expensive  Same ideas  Less innovation  Keep the same people Tension between level of risk aversion and other factors such as price, real or perceived need for new ideas, and appetite for change

APMP BID & PROPOSAL CON 2015 | PAGE 8  We may have capture and proposal processes  We may have a rebid strategy, BUT  We lack rebid specific processes  A rebid is different type of animal My Perspective: Rebid Processes are Deficient

APMP BID & PROPOSAL CON 2015 | PAGE 9 Top 3 Rebid Capture Actions for EVERYONE 1.Shaping 2.Value Proposition 3.SWOT Analysis

APMP BID & PROPOSAL CON 2015 | PAGE 10  Activate your listening campaign  90% listening, 10% talking  Network with ALL customer stakeholders  Strategy evolves as result of shaping Shaping

APMP BID & PROPOSAL CON 2015 | PAGE 11  Whether you are incumbent or challenger, you must have one  Evaluators perceive and score strengths when a proposed feature:  Exceeds requirements  Increases likelihood of successful contract/mission accomplishment  Offers a value-add  Is not offered by all bidders Value Proposition

APMP BID & PROPOSAL CON 2015 | PAGE 12 SWOT Analysis We Win (Reasons why we’ll win – maximize our Strengths)  Xx  They Win (Reasons why we’ll lose – Weaknesses for us)  Xx  They Lose (Opportunity to “ghost” the competition)  Xx  We Lose (Threats to us – need to minimize strengths of competition)  Xx 

APMP BID & PROPOSAL CON 2015 | PAGE 13 1.Start on day one 2.Leverage the Project Manager 3.Build risk aversion Capture Phase – Top 3 Actions for Incumbent

APMP BID & PROPOSAL CON 2015 | PAGE 14  Day one of contract award is day one of rebid planning  Ensure past performance is stellar  Start improving on day one (but save a few new initiatives for the proposal!) Start on Day One “The government will likely use the incumbent's past performance evaluations as a major factor in the re-compete process.” -GovWin by Deltek “The government will likely use the incumbent's past performance evaluations as a major factor in the re-compete process.” -GovWin by Deltek

APMP BID & PROPOSAL CON 2015 | PAGE 15  Begin greening early  Implement an innovation plan  Inform your shaping with a listening campaign Start on Day One continued

APMP BID & PROPOSAL CON 2015 | PAGE 16 Leverage Project Manager  The PM is your best listener and shaper  Teach him/her to be an ethical spy  Require the PM to implement a rebid knowledge repository

APMP BID & PROPOSAL CON 2015 | PAGE 17  Make sure relationship is not just with people (who can be captured) but also with your company  Offer value-adds specific to company capabilities  Highlight institutional knowledge (relationships, technology, processes)  Be prepared to mitigate risks if you cannot prime the rebid Build Risk Aversion

APMP BID & PROPOSAL CON 2015 | PAGE 18 1.Make honest assessment of win probability 2.Exploit incumbent vulnerabilities 3.Overcome the customer's risk aversion Capture Phase – Top 3 Actions for Challenger

APMP BID & PROPOSAL CON 2015 | PAGE 19  Start early and be honest!  Can you fill gaps and perform at the winning price?  If you cannot fill gaps prior to RFP release, then no bid Make an Honest Assessment PWS/SOW Requirements Bidder Core Competency Past Performance Customer Knowledge ______________________ Your Costs vs. Winning Price

APMP BID & PROPOSAL CON 2015 | PAGE 20  Find them: web searches, networking, LinkedIn connections (employees, teaming partners, customers)  Ghost them: promises made and not kept… goals not achieved… performance measures not attained… personnel not retained...costs not contained… financial instability Exploit Incumbent Vulnerabilities

APMP BID & PROPOSAL CON 2015 | PAGE 21  Learn hot buttons and turn these into potential risks of status quo  Offer compelling solution with strengths  Lower price may overcome perceived risk in today’s market Overcome Risk Aversion

APMP BID & PROPOSAL CON 2015 | PAGE 22 1.Turn win themes into ghosting themes 2.Conduct effective proposal reviews 3.Price to win Top 3 Rebid Proposal Actions for EVERYONE

APMP BID & PROPOSAL CON 2015 | PAGE 23  Articulate benefits to the customer (with proof) while ghosting what competitors lack  Ghost incumbent and build risks of status quo OR  Ghost challengers and build risks of change Turn Win Themes Into Ghosting Themes

APMP BID & PROPOSAL CON 2015 | PAGE 24  Don’t drink your own bathwater!  Assign reviewers to play devil’s advocate Effective Reviews

APMP BID & PROPOSAL CON 2015 | PAGE 25  Use reverse engineering and competitive intelligence to derive rates and markups for competitors  Recent studies show price erosion of 15-30% Price to Win Maximum acceptable bid (MaxAB) Price to win (Pwin) is somewhere in between Minimum acceptable bid (MinAB) Market driven competitive range is between MinAB and MaxAB

APMP BID & PROPOSAL CON 2015 | PAGE 26 1.Have the best proposal 2.Look to the future Proposal Phase – Top 2 Actions for Incumbent

APMP BID & PROPOSAL CON 2015 | PAGE 27  Expectations are higher for incumbent's proposal  Continuously improve on your winning proposal Better value proposition New proof points Lessons learned Improvements Cost savings Lowest risk Have the Best Proposal

APMP BID & PROPOSAL CON 2015 | PAGE 28  Most incumbent proposals read like a history lesson  Explain what you WILL do not just WHAT you did  Avoid repeating that you are the incumbent  Do not ignore problems and mistakes Look to the Future

APMP BID & PROPOSAL CON 2015 | PAGE 29 1.Exploit “incumbentitis” 2.Make the business case for change Proposal Phase – Top 2 Actions for Challenger

APMP BID & PROPOSAL CON 2015 | PAGE 30  Incumbents build risk aversion by focusing on the past  Focus your proposal on the future Demonstrate risks of status quo Ghost past failures Provide proof of future success  Take a fresh look at the price Exploit Incumbentitis

APMP BID & PROPOSAL CON 2015 | PAGE 31  Demonstrate low risk at better price Why is different better? What is the ROI? Which features are strengths? Are proposed innovations in keeping with level of risk aversion?  Gather and provide proofs for every element of the solution Make the Business Case for Change

APMP BID & PROPOSAL CON 2015 | PAGE 32  News flash: Incumbent and challenger have almost an equal chance of winning  No matter the outcome, capture lessons learned for your next battle Bring home the win!

APMP BID & PROPOSAL CON 2015 | PAGE 33 Questions  Share your lessons learned: How did you unseat an incumbent? How did you retain your incumbency?

APMP BID & PROPOSAL CON 2015 | PAGE 34 Lisa Pafe, CPP APMP & PMI PMP Principal Consultant Lohfeld Consulting Group, Inc. (703) Contact Us APMP PO Box Washington, DC Phone: +1 - (202)