Why your proposal department is really your research and development department

Proposals are where you often conceptualize new approaches before you put them into operational use. This is true for customer-facing projects, company-wide best practices, use of information technology, and more.

Every proposal essentially is a research and development effort. Everything has to be figured out. 

This applies equally to the proposal itself and the work being proposed:

• You have to figure out what it will take to win and how to build a proposal around that. And since both the circumstances change as well as the wording of the RFP, you have to figure this out again for every new bid. 
• What you are proposing to do or deliver also has to be figured out and estimated. You have to do this with a major incentive to have an approach that is superior to anything your competitors might offer. 

In particular, you have to figure out:

• What it will take to win
• What the customer cares about
• What to offer
• What your approaches will be
• What tools will be used
• What resources will be required
• How to prove it all
• How to present it all
• How to overcome all the problems that will come up along the way

When the best practices aren’t good enough

Keep in mind that best practices might be the gold standard, but they aren’t enough to be competitive when everyone proposes the best practices. Every proposal should be an effort to raise the bar on the best practices. This means every proposal should be an effort to figure out new and better ways of serving the customer. 

Achieving this consistently and competitively means not only doing research and development, but making research and development the focus of your efforts. It means organizing your efforts and developing your process around research and development instead of repeatable steps. This is a key difference between companies that set out to submit proposals and companies that set out to win proposals. 

If the mission of your proposal group is to produce proposals, your win rate will not be as good as it would be if maximizing win rate was its mission. Efficient production lowers costs. Discovery of how to maximize your win rate through research and development can increase your revenue orders of magnitude beyond any possible cost savings.

Proposals are at the center of the entire company

Proposal management coordinates the efforts of the operations, contracts, pricing, and HR departments. It’s difficult to find a department in the company that isn’t touched by proposals. If you get all of your revenue from proposals, then everyone in the company is a stakeholder. 

The reason this matters is because the proposal department is the department that is constantly trying to raise the bar and reinvent so it can stay one step ahead of the competitors. The proposal department is not just a research and development department, it is the research and development function for the entire company. Winning proposals drives improvement in all the other departments and functions.

This is a good thing.

If you’re going to have a research and development department in your company, it makes sense that it be tied to:

• Revenue generation
• Understanding and pleasing your customers
• Lowering your costs

The proposal function is right in the middle of each of these. Instead of treating proposals like a stovepipe, consider intentionally flowing the research and development that the proposal function coordinates into the other parts of the company.

How do you convert your proposal function into a research and development function?

For your proposal function to become an R&D function:

• Pursuit strategy needs to start from an awareness that you have to beat the best practices every time you bid. 
• The proposal group must become inventors, problem solvers, and change advocates.
• People can’t be afraid of losing. R&D does not have a guaranteed or predictable outcome. 
• You must beat yourself and not just your competitors. Every time. This means tracking your own performance, typically your win rate, and improving it obsessively.

It requires an executive mandate. You can’t have the proposal department driving change and improvement into all the other departments in the company without executive sponsorship. People naturally resist change. Creating a culture that embraces continuous change and improvement will not happen without executive participation and enthusiasm. Without it, what tends to happen is that during proposals, proposal advocates push for differentiation by exceeding the best practices while operations seeks to keep things the same because they are responsible for performance and prefer to stay in their comfort zone. The truth is there is no need for this to be a conflict, but sometimes people, personalities, and expectations clash without mediation.

But do you want a research and development function? 

You only need to treat your proposal department like a research and development function if you want to remain competitive, keep the customers you have, and grow your company. If you don’t treat your proposal function like a research and development function:

• Your competitors will beat you with more innovative proposals
• You will lose revenue as a result
• Your customers will start looking elsewhere for improvements

Some companies treat their proposals as a necessary evil or an expense to be minimized. Companies like these are easy to beat. Research and development within a company requires investment. The good news is that winning proposal produces a measurable return on that investment. And increasing your win rate can easily be the best investment your company ever makes. So don’t just treat your proposal group as a research and development function, measure its success and the direction of its research by tracking your win rate very carefully.