Why bidding everything leads to failure

Some companies are opportunistic and bid every lead they find. They think business development consists of looking for leads in databases and bidding everything they can. These companies aren’t selective, waste resources, have little or no process, and try to cram everything they can into their proposals at the last minute. They sometimes get just enough business to reinforce their bad habits.

Most opportunistic companies are in wide niches where they don’t have to worry about whether enough business exists for them to prosper. A lot of them are services companies that will take on any type of work and then hire the staff to do it, or IT companies that are really services companies. They just go after all they can find and call it business development. Their only bid/no bid consideration is whether they can do the work (or more accurately, hire the people to do the work).

People think the cure is to improve their bid/no bid decision making, follow an effective process, and get some discipline. But that’s just treating symptoms. The real problem is a lack of strategic planning.

Creating a strategic plan means knowing something about segmenting your marketplace, targeting, positioning, and how you want the company to develop. It means understanding the business math that converts leads to resources to overhead coverage and profitability. Acting on a strategic plan means using it as a filter in your bid/no bid decisions. It turns business development from chasing leads into achieving strategic goals.

People love to trash strategic plans, because in many companies it’s a document that executives prepare and workers ignore. If all a strategic planning effort produces is a document that sits on a shelf, it deserves to be trashed. A strategic plan needs to be an assessment tool. It should tell you where to focus your efforts, what to bid, and what not to bid. A strategic plan should tell you how much of what you need to bid to achieve your goals, and where you’re going to find that business.

Companies that don't do strategic planning never develop the skills required to understand the business math, goal setting, or what business development really is. This is the real problem. Strategic planning isn’t about feeling good because you have one, it’s about knowing how to make strategic choices and bringing them into your everyday operations. Because opportunistic companies don’t understand strategic planning, they don’t set the right goals or understand the true nature of business development.

This is the real reason why opportunistic contractors are doomed to failure. It’s not because they waste resources pursuing too many leads with ineffective capture efforts. And maybe the cure isn't to lecture them about bid/no bids or relationship marketing, but rather to teach them how to create a strategic plan and follow it. When they understand what a pipeline is and the math behind it, that’s when they’ll stop focusing on their top end number and chasing every contract they find until they surpass it.

The problem is they don’t know how to write that kind of strategic plan. That’s what they need to learn. Ultimately strategic planning isn’t about document production, it’s about learning how to make decisions. If you can’t write a strategic plan, then you don’t know how to make business decisions. Maybe you don’t even need to have a strategic plan, you just need to have the capability.