The Work To the Left of Proposal, part 1

PM Commentary by Stacy Goff.
What is the work to the left of Proposal? The answer depends on your role, your project, and your perspective. For example, although many programs involve proposals, many projects do not. In engagements that involve proposals, the majority of success often depends on the work that occurs before the Proposal is ever signed. What is that work, who performs it, and why is it so essential to both Proposal and engagement success? Let us begin by clarifying the actions that occur early in a successful engagements that do not involve contracts. Then we will expand to the more-complex engagements that do involve contracts. This complexity of multiple organizations in contracts is a key distinction between two Advanced Competence-based certifications: certified Project Manager (IPMA Level-C) and certified Senior Project Manager (IPMA Level-B).

Engagements Not Involving Contracts

Many engagements are intended for internal implementation, and do not significantly rely on proposals and contracts. In these projects, actions that take place between inspiration and the beginning of Requirements elicitation are primary factors of success. For example, we’ve shown for years that the first 10% of any project’s effort is responsible for 90% of its success.

That 10% (or less) of effort includes a range of important and well-managed actions, that include:

  • Clear communication of the original inspiration, concept and planned benefits,
  • Engagement of the right Sponsor(s), who have visibility with Executive Management,
  • Assignment of the right Talent, including Project or Program Manager,
  • Identification of the right initial scoping,
  • Evaluation and Responses to Risk/Threats and Opportunities,
  • Establishment of a clear Business Case, and assignment of responsibilities for realizing it.
  • Provision of the right preliminary funding, subject to change at major milestones or stage/gates,
  • Modeling of an appropriate high-level schedule, and
  • Commitment of the right business-area participants, the right amount of time for the next steps, including Requirements elicitation.

These activities are so important to engagement success that for over 25 years I’ve performed a service, Rapid Initial Planning. This service facilitates the quick collection, verification and Executive approval of the needed project results. The diagram below shows a sample project life cycle for an internal project. In the diagram, the actions identified above occur before and during phase 1, Initiate. We consistently find that assuring the right results from that early period offers the greatest opportunity to improve engagement success.

Continuing, the next series of actions is also essential. These include Requirements elicitation, analysis, prioritization and approval, and Lessons Learned from prior projects. From this, the project team can produce the first reliable estimates.

The Buyer In A Contractual Engagement

Let’s talk about a Buyer’s perspective, in an engagement that involves contracts between a Buyer and one or more Sellers. In this situation, the actions identified above, those pre-Requirements, and those that generate Requirements, are even more important. The reason: In more-complex engagements, the Risk/Threats and Opportunities soar with the level of complexity. The Buyer includes the organization, its representative, and its stakeholders. The buying organization initiates a project, just as described above. Following that, competent and performing Buyer Team Members collect, analyze, prioritize and approve the Requirements. They then begin the High-level Design, including key and crucial decisions: In-house or contracted support? Existing infrastructure or new? Acquired or developed components? And so on. By this time, a typical “soft product” project will have spent 25%-40% of its effort. A “hard product” project may have spent 15%-25%.

And at this point, with High-level Design complete, comes a major decision: Which portions require contracts with external parties? Often, the answer to this question was clear from inspiration. But only now, given Requirements Analysis and High-level Design, is the Buyer ready to make decisions about external parties. The Buyer’s organization compiles a Statement of Work and issues a Request For Proposal.

The Buyer actions we discussed so far show below the first three phases of a sample Government (US Defense) engagement life cycle. Those first three phases on the diagram are similar to the first three phases in the diagram above. But they reflect this Government engagement type. Note the gap between the first three phases and the last two. There will be ongoing Buyer work during that gap, but it is during the first three phases that the Sellers are most active.

The Seller Perspective

The first three phases is the point in the contractual engagement life cycle when the Seller gets involved. There may have been some earlier notice, including a Request For Information. But now the Buyer sends a Request For Proposal (RFP) to qualified Sellers, with a narrow window of opportunity for response. Note that the scale of the RFP affects the subsequent actions of the Seller. For example, the Seller might just be a supplier of off-the-shelf components, requiring mere fulfillment and invoicing.

Our example is a more-complex one, where the Seller must create new product or services as part of the proposed engagement. That Seller establishes a Proposal Team to fully understand the RFP and its Statement Of Work. They attend Bidder Meetings, ask questions to clarify requirements and proposal scoring; they estimate costs. If needed, they establish Strategic Partners for portions outside their specialty, decide on a Win Strategy (win on cost, reputation, or innovative solution?) and make a bid. Whew!

The successful bid-winning Seller does not just begin in the Buyer’s phase 3, Systems Development and Demonstration. Instead, they rely on their own Life Cycle (such as the one shown in the Engagements Not Involving Contracts perspective above). Or they may rely on that of their Strategic Partners. Using their selected life cycle, the Seller begins with their own analysis of the Statement of Work from the Buyer to the level of detail they need. This includes more details of their own early project initiation, situation analysis, requirements discovery, high-level and detailed design. They do this to derive the detail they need to reduce their delivery risk, and design the most cost-effective solution.

Some Sellers Turn Into Buyers

Then they may, as a result of their early-engagement analysis, identify the need to issue a Request For Proposal from a second-tier Seller. They develop, test, validate and deliver the result to the Buyer. And, they complete their life cycle, (summarized above in purple) all within the time gap between the Buyer’s mid-phase 3 and early phase 4.

Note that sometimes the Seller finds that Strategic Partners cannot complete all the components needed to deliver the contract. They in turn become a Buyer, with another embedded Seller delivery cycle. We have seen such nested Buyer/Seller relationships six layers deep in some Defense engagements. The Risk Management of these delicate initiatives is a pretty exciting competence to manage! When not managed well, Sellers fail to fully deliver, and the Buyer stakeholders suffer with inadequate products or solutions. When this happens, Seller Performance Ratings (a key weighted factor in most proposals) plummet.

Project/Program Challenges Overcome

Thus far we have discussed this from the narrow view demonstrated by many Buyer and Seller Project Managers. Allow us to open this view a bit, by adding another role. This role, properly implemented, can help to:

  • Reduce engagement risk,
  • Improve the Buyer Requirements,
  • Increase the communication before, during and after the bid,
  • Improve the Buyer satisfaction with the project results, and
  • Improve Seller Performance.

Wow! Sounds kinda like a miracle drug! What is this hugely beneficial role?

Introducing Business Development

It is named Business Development (BD). While many flavors of BD exist, the variant with which we are most familiar is the outcome of a multi-year effort by individuals and organizations. These individuals include key talent such as Howard Nutt and others from Shipley Associates. They are a highly-recommended and well-known Proposal Management and Business Development consulting and training organization. Also involved is Ginger Levin, a PM and Capability Maturity Model expert. Plus members of an existing not-for-profit association,  APMP, Association of Proposal Management Professionals.

Business Development Institute International is the resulting new not-for-profit organization. It offers a Business Development Capability Maturity Model® or BD-CMM®, Business Development Assessors and an Assessment process. It presents classes that help guide BD implementation and assessment, and coaching and consulting services that help improve effectiveness. The way this discipline works is to engage Buyers and Sellers in ongoing relationships of trust and information exchange. The Business Development Manager serves much like a consultancy’s Engagement Relationship Manager. They oversee a whole series of engagements. See the Shipley website for more information* about the resulting BD-Capability Maturity Model. So how does Business Development affect the life cycles we discussed above? See the diagram below.

About The Graphic

The graphic above shows BD involvement before and after the Seller Project Life Cycle, it also continues during the Seller Project Life Cycle. BD is primarily a supporting role during that time. In fact, this enables another winning strategy: One of the greatest achievements with our Seller clients started in the 1980s. We kept the Seller team cross-staffed with all of the key disciplines before, during and after the Proposal and Delivery process. Applying Integrated Project Teams, we eliminated the relay-race hand-offs that caused Project teams to distrust anything Proposal teams sold.

The cost of this much more successful relationship? Less than most Seller companies spend on their losing bids. The net benefit of this relationship? Significantly higher Bid/Win rates, fewer wasted bidding efforts, and higher revenues for the Seller. For the Buyer, better results, cheaper. Today’s BD-CMM and consulting improves on our model with a roadmap for including the Buyer on that team, and institutionalizing the process.

Half-time Summary

The Work to the Left of Proposal (a quote we credit to Howard Nutt), for all projects that involve contracts, has as much impact on engagement success as any other factor. Those other factors include the Competence of the Project Manager, and the Talent of the delivery team. My position is that every PM who works on Contract-related projects should understand and engage the role of Business Development. And, we must focus the value of the BD discipline on engagement success.

But wait, there’s more. In part 2 we will identify yet another discipline that has equally-important impact. And, we will describe their practitioners’ importance to our project initiatives.

* Business Development Institute originally managed BD-CMM. Shipley rescued it after Howard Nutt died.
Capability Maturity Model and CMM are registered trademarks in the U.S. by Carnegie Mellon University.

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