COMMENTARY

RIP traditional business development

• By Bill Scheessele
• Aug 26, 2011

More than one senior business development leader describes the out-of-control circumstances being experienced in government contracting as akin to the Wild West. If they’re correct, traditional capture is buried on Boot Hill.

Your previous capture system, built on a structured and predictable procurement process, is mismatched in this untamed setting. Instead of reacting with fast-draw responses to the situation, it is prudent to develop a BD strategy and plan to confront the chaos, grow revenue and win in this undisciplined environment.

Step 1: Cut

After assessing your current organization, prune deadwood and remove underperformers. Cut excuses for not meeting objectives by holding personnel accountable for results. This will empower the BD team, as long as you invest in the appropriate measures to assist them in this mission. Provide training in updated processes to face this altered procurement scenario. Without training, your team is bringing a knife to a gunfight.

Cut out unprofitable areas of services and products or shift the market focus. Just because your offerings were favored a few years ago doesn’t mean they fit your customer’s needs today. 

And take a hard look at your customer base. Cut bad business; it can be even worse than no business at all because it consumes resources with minimal return. Rein in customers that no longer fit your model and those that can’t match your margin requirements. Focus only on markets and clients with potential for growth. If mergers and acquisitions are a component of your strategy, consider investing saved resources to buy into favored markets via acquisition.

Step 2: Cap

Limit your outlay in personnel and financial assets. Set your budget to drive your required revenue results, and refrain from reacting to the herd. Use a proactive opportunity identification and qualification process based on intelligence gathering to validate prospects early in your process. This methodology helps protect personnel and budget resources and weeds out opportunities. As was advised in the Wild West, pick your gunfights wisely. 

In a lean business development and delivery organization, which is required to succeed today, the time and talent of your personnel are as valuable as your funding. In the face of restrictive government budgets with a preference for low prices, a low overhead rate is the wild card in the poker game. If this option is available, use it. Balance by bidding your best people while also controlling your cost structure.

Step 3: Balance

Whether you focus on the short term or long term, pick a strategy that fits your organization. Do you want your team generating revenue in a year, or do you want them focused on long-term business a few years out? That decision requires balance because you don’t want all of your eggs in the long-term basket. On the other side, too much short-term focus leads to the hamster-mill scenario. That can mean you are reactive to generating revenue this year, make your numbers in the short term, and then repeat year after year. You’ve joined the herd in commoditizing industry. 

Effort vs. reward ties into short-term vs. long-term focus. Make sure your compensation and incentive plans are in balance. You want to reward your best performers with the highest bounty. Balance that by moving nonperformers who deliver zero reward out of that role. Ensure that your commission structure is also balanced against long-term and short-term objectives.

Result: Grow revenue now

Achieve strategic revenue objectives. Look outward on the revenue horizon for your strategic growth target. Decide how you want to grow from where you are, adding revenue incrementally. Beware of growing too fast without the required infrastructure, and grow your organization within itself to match revenue objectives. Choose to grow with a specific model, within strategic selected areas and market segments. Invest in your talent. Provide education and professional development to help them fight through these difficult times. It’s a wise short-term and long-term investment. 

Leadership needs a visionary growth model that’s planned and proactive — and unlike the showdown in the classic film "High Noon," in which you’re Marshall Kane, make sure you're not outmanned so that you can live to face another gunfight.

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