Bid/no bid decisions: 6 approaches to making them and 10 things the process must get right

Very few companies have effective bid/no bid decision making. They muddle through. When they do implement a bid/no bid process, it is usually flawed. The desires of participants carry more weight than any other criteria. Most find it extremely difficult to not take a chance at winning something. Some even have bid/no bid decision meetings, but they don't actually change anything. Below are several ways that companies approach the bid/no bid process. 

1. Leave it up to business development. A lot of organizations assume that they wouldn’t pursue an opportunity if it “didn’t look good.” The problem with this is that they tend to not put in place the systems that ensure their opportunities are golden. A bid/no bid process pushes information along to the next decision point, where you can see whether sufficient progress has been made toward being ready to win it. It also forces you to explicitly consider more reasons to not pursue the effort. It makes you more selective and increases your win rate. But even if you can never bring yourself to reject a bid, having a bid/no bid process will make your pursuits more effective, simply by providing goals and deadlines. A variation on this is to incentivize business development on wins and then leave it up to them what they pursue.
2. Pre-RFP bid/no bid decision. A lot of companies hold a bid/no bid decision meeting shortly before the RFP comes out. The problem with this approach is that it is reactive — it assesses what has been done with no ability to influence what will be done. In addition, it often doesn’t result in an actual decision since the verdict often degrades into “let’s wait and see what it says in the RFP.”
3. RFP Release bid/no bid decision. When a company starts to formalize its proposal process, if it lacks a bid/no bid decision process, the proposal process will often impose one when the RFP is released. The idea for this review is to avoid spending effort on pursuits that can’t be won. The reality is that by this point the company is invested in the pursuit and reluctant to drop it. Like the pre-RFP bid/no bid decision, this one also comes too late to effect any positive change.
4. Step reviews and gate systems. These approaches are basically synonymous. A gate system identifies milestones with requirements that the pursuit must fulfill in order to pass each “gate.” A step review is a series of reviews held at each step in the pursuit. Both are usually about the bid lead demonstrating to the company that it’s a qualified lead. Gate systems tend to be financially oriented, focusing on resource allocation. Setting the milestones can be tricky.
5. Point scoring. Awards points when a pursuit matches certain criteria that are customized to the company’s offerings. For example, the number of staff, lead time, points of contact, frequency of contact, value, etc. could all be criteria that get assigned a certain number of points. You can create a bid/no bid matrix or scoring sheet to make it easy. Point systems are great if you need to implement objective automatic bid/no bid decisions, such as for quick turnaround task orders. However, they don’t work as well in environments where offerings can’t be qualified using predictable criteria.
6. Readiness Reviews. Uses a series of reviews with specific questions to answer, goals to achieve, and action items for each review. This is the approach we recommend as part of the MustWin Process. The scoring system help make decisions more objective. It also lends itself to tracking metrics in a matrix that can help you make your bid decisions. Because the questions, goals, and action items are known in advance they help ensure that nothing gets overlooked. They provide a way to track whether the pursuit is trending toward being ready to win at RFP release or away from being ready to win.

You should have a bid/no bid decision when a lead is identified. You should have a bid/no bid decision when you want to put resources into pursuing it. You should have a bid/no bid decision when you want to check the progress that you’ve made. You should have a bid/no bid decision at key milestones. You should have a bid/no bid decision when you finally get to see the RFP. You don’t need a bid/no bid decision, you need a bid/no bid process.

The trick to having a good bid/no bid process is that it must:

• Start early enough to facilitate positive feedback and change
• Have a sufficient number of reviews to track trends
• Incentivize dropping leads as much, if not more, as it does identifying and pursuing them
• Be helpful to those who have to implement it, and not extra effort
• Set expectations between business developers and reviewers in advance
• Encourage developing an information advantage and not just satisfy financial criteria
• Result in the information needed to win the proposal
• Be objective enough to overcome the human desire not to drop something labeled an “opportunity”
• Have a feedback loop or metrics tracking component that improves future decisions
• Require the metrics generated by the reviews to be used in executive reporting

When you examine the approaches to bid/no bid analysis with these in mind it becomes apparent why many companies’ bid/no bid decision making is so flawed. Part of the problem is that it requires the active participation of those identifying and pursuing the leads. Convincing them to drop some of the leads they discovered is a challenge. If you set up your bid/no bid decision as adversarial, or use a consultant or service to challenge whether you should bid, you'll face internal resistance. Implementing a bid/no bid decision process is most effective when the incentives for dropping leads equal or exceeds those for pursuing them. This can be done by setting “no bid” targets, limiting the amount of funds for pursuit, making reviews as objective as possible, and incentivizing reviewers based on “no bids.” It may be better to engage a bid/no bid consultant or service as a coach to help qualify your leads than as a hurdle to be overcome.

In any event, a bid/no bid decision process can’t be mandated from the proposal back-end. It has to be desired by those involved in business development. The best way to achieve this is to create a system that is helpful to them.

The way we do this is by making it easy for them to complete the Readiness Reviews and ensuring that they know exactly what they need to do to pass those reviews. The idea is to make it so that as they collect intelligence about the customer, opportunity, and competitive environment, they only have to record or store it once and that’s what is used for the review. We avoid asking them to sum everything up in some kind of report that they have to prepare. We also designed the scoring system so that the review produces the metrics without any extra effort and the metrics can be used to show them whether they are hitting their targets.

It also helps if the metrics from your bid/no bid analysis are required to complete executive reports. This is a little trick we developed to help a billion dollar company implement Readiness Reviews. They were decentralized, with locations worldwide, and had hundreds of people who would be involved. Gaining process acceptance was their number one concern. By changing the formats used for executive reporting, the executives pushed the requirements down to their organizations and their staff started asking for training. This put the staff doing the implementation in the position of offering help instead of demanding cooperation.