Mistake #4 - Weak relationships with the customer and
Twenty years ago, when I had just taken up my first position as a director
of a contracting business, I was given a very good piece of advice from an experienced
colleague. He said: "It's not what you know and it's not who you know that counts
in business, it's what you know about who you know that really makes the difference!"
He explained that you are better off having a smaller number of deeper more meaningful
business relationships than a large number of shallow acquaintances that you see
rarely and know hardly anything about. He advised that you should try to develop
true business friendships based on mutual understanding, trust and a commitment
to help each other succeed. I can testify that this has worked not just in business
but in my private life too.
Human nature dictates that most of us have a preference for spending time with
people who we like and trust. In the private sector, customers often decide with
whom they want to place a contract before the tender is issued and usually find
a way to achieve this even if their favorite supplier isn't the lowest price to
start with. In the public sector, such bias is not allowed and evaluators have
to be as demonstrably objective and fair as possible. Nevertheless, in my opinion,
I believe that there is still some influence even if only at a subconscious level.
So my message is to target customers where you have a great relationship as
this gives you a huge competitive advantage particularly in the private sector.
If you don't have a close relationship yet with an important potential customer
then start getting to know them straight away and certainly well before the PQQ,
ITT or RFP is released, as it will then be too late. There are other good reasons
for early interaction with customers that I will explain later.
Mistake #5 - Failing to build trust and rapport
From what I have seen, less than 5% of companies submitting PQQs just
don't bother to build rapport with the customer's evaluators and less than 40% of
bidders don't pay much attention to this either. This presents an opportunity
for others. Most customers in the public sector are faced with a dilemma. They
are highly sensitive to any claims that they have been biased or have treated
anyone unfairly and as a result it is often difficult to speak to them once a
PQQ, ITT or FRP has been issued. On the other hand they also want to make sure
that all applicants and bidders fully understand their requirements.
The compromise they usually adopt is to stipulate that all bidder questions
will be recorded in writing preferably by email. And all answers will be circulated
to every bidder unless it is agreed that the subject matter is commercially sensitive
to the bidder raising the question. This arms length approach underlines the importance
of getting to know the customer before PQQ, ITT or RFP release.
It isn't impossible to build trust and rapport with a customer through written
communication and one should still try but it isn't the same as face-to-face communication.
Fortunately there are still two or three opportunities to meet the customer and
their representatives that should not be ignored. These include pre-tender open
days, mid-tender interviews and site visits. Not taking up these invitations is
foolish as it sends wrong message and is a missed opportunity to gather intelligence
and build relationships.
I know that time is limited and it is difficult to prioritize tasks but even
if you don't think that you need to visit site to assess the work content then
think again. It's not just about checking the scope of work even though that is
really important. It is also about sending a message to the customer that you
are interested and enthusiastic about their project or framework. This is what
most customers are looking for.
You also miss the opportunity to build rapport and gain a better understanding
of the customer that could give you an edge over your competitors. You may also
find out who your competitors are as customers like to minimize disruption and
take all bidders around site at the same time.
If you don't already have an excellent relationship with the customer then
how do you go about building one? Well, the foundation of all good relationships
is trust. It is that precious and fragile ingredient that takes a long time to
build but can be shattered in seconds and needs to be nurtured carefully. Trust
is also the main building block for partnering and collaborative working. If you
are targeting a framework contract then if you cannot demonstrate that you can
work collaboratively and develop a mutually beneficial long-term relationship
then you have little chance of success.
Partnering has been around for many years but most companies and people are
poor at it! I believe this is true for most customers, design teams, contractors
and suppliers. The problems arise from a fundamental lack of understanding, commitment,
behaviors, skills, processes and tools to make it work. Proper partnering is not
cushy or complacent, it is demanding and challenging, but in my humble opinion
it usually delivers more value and reduces risk for all parties concerned.
Is partnering and collaborative working dead? For some it is, but fortunately
for others it is still alive and kicking. These people require bidders to submit
a quality submission. This is a signal that they are very interested in how the
bidders propose to add value and manage risk and partnering plays an important
role in this.
What I have noticed is that the companies who score highest on their quality
submissions also have a good grasp of partnering and have processes in place to
help them. They can also provide examples that demonstrate their commitment to
make it work. I use a simple but comprehensive and effective system for helping
my own clients introduce partnering to their projects, frameworks and business.
It produces results consistently and also creates great content to use in PQQs,
ITTs and RFPs.
Customers who select their contractors, consultants and suppliers based purely
on price are not looking to adopt a partnering approach. Those customers are looking
to select on best value or the most economically advantageous bid (which incidentally
is the preferred approach of Government and public sector customers).
In Part 2, David Harrison will cover
Mistake #6 - Not asking the right questions before
the PQQ, ITT or RFP is issued
Mistake #7 - Unstructured business development,
"capture" and bid processes
Mistake #8 - Insufficient planning and
PQQ and Bid Teams
Mistake #9 - PQQ and bid teams under resourced
Mistake #10 - Little commitment shown by key
Mistake #11 - Not understanding customer's
needs, standards, expectations, constraints and concerns
Mistake #12 - Misinterpreting the
procurement process, instructions, questions, scoring and selection criteria