So, as the area of process improvement and technology adoption is one of our small firm's strong points, we submitted a bid, along with 12 others, to remedy the situation. When we were not selected as a finalist, we set up a debriefing with the client. This is an important step in our business development process -- we learn from the losses and use the information to help us continue to improve. In this particular case, the debrief session provided us with information that set us on a different path. As a result of the debriefing, we made an important company decision -- we altered the profile of the clients we pursue.
What was it about this particular debriefing that resulted in a direction-changing decision? What we found out to our dismay was that, although we weren’t selected, we actually had the best proposal of the 13 bidders. Our experience and references were outstanding, our methodologies and approach were preferred, but we had two shortcomings. First, our price, although well below their budgeted amount, was not the lowest. Our proposal, however, was strong enough to overcome that, but for one other major fault -- the selection team insisted on hiring a consultant with experience in their very specific and narrow industry segment. Although we have experience in the area, our experience is not focused in this particular market segment, and is more broad-based. The selection team had weighted the selection criteria so that experience in the industry segment overrode practical experience and the actual expertise, knowledge and methodologies needed to meet the requirements. It is interesting to note that the system installation and training had been performed by a team that had “industry experience”. However, that had not ensured a successful implementation. Despite heavy experience in the industry segment, that team apparently overlooked the critical change management needs in the environment.
Unfortunately, this is not the first time I have run into this particular mindset of evaluation and selection teams. As part of my consulting practice in outsourcing, I have worked with many clients to help them build valid decision-making and selection criteria for outsourced services providers -- to help them understand that if a service provider delivers infrastructure services, for example, it is more important to understand their success rates, their customer satisfaction rating, and subtle things like work ethic, process orientation and client relationship management. The quality of the service, the reliability of the services, the references they provide, their technology platforms and the proposal that they make is far more important than experience in their particular industry. Technologies and technology based services are often agnostic in that way. If you are a gas company, it is interesting to know that that your disaster recovery provider has provided services for other gas companies – but that fact should not trump their ability to provide disaster recovery services.
In a way, this client in our example built selection criteria that resulted in a safe choice – one that probably won’t be controversial at the management level. When evaluation teams feel uncomfortable making selection for services they do not understand, they often default to what seems familiar… the price, direct experience in their particular industry or specialty and as a result, in my opinion, overlook the talent and perspective brought by other service providers. Of course, there are exceptions – if the services being sought are unique to an industry segment, then experience in this area should be highly rated in the election criteria. If seeking a provider to do an SAP implementation, it would be wise to choose a provider with deep experience in that particular technology.
What’s the point of all this?
Well, I am not just writing to gain sympathy for our lost cause. We actually determined as a company, however, as a result of this debriefing and the information we received, not to pursue customers who cannot demonstrate to us their agreement with our belief that the process and services we provide are common to all organizations and technologies, and the skills needed to perform the services are not unique to an industry segment.
When companies build selection criteria based on factors that are not pertinent to the work being done, then they set a precedence which the service provider community remembers. Will our company bid for work again with this particular company? No. We’ve learned that this company has a tendency to make decisions based on factors that are not in line with the deliverables sought. Will other providers make the same decision? Possibly. Who is the real loser? Providers, including our firm, who observe this situation are likely to move on to more fertile ground. It seems that the client is the one who may be missing out. If one follows this approach to its logical end, then over time, the same providers will deliver the same work to the same customers. Competitiveness and real innovation is lost to comfort.