The Risk Of Depending On RFP’s to Grow Your OrganizationJune 22, 2020 | By Wayne O'Neill
This year’s health crisis and economic disruption brought many owner-related challenges to the surface in construction and design for healthcare, higher education, government, and more industries.
- What if your primary service providers and partners could no longer provide needed services?
- What if your providers suddenly experienced significant project delays due to resource constraints?
- What if your providers prioritized other work ahead of your organization because of a lack of relationship?
In other words, what if years of depending on the RFP to select customer bids exposed your business or organization to risk and stunted growth?
During this recovery and transition period, it’s time to think about a new owner mentality of focusing on authentic connection and identifying comprehensive solutions to achieve growth objectives and to better insulate your company from future disruptions.
Ultimately, this will help position your company for sustainable growth through a smarter approach to advancing project scope.
The Risk of Depending on the RFP to Select Bids
The old way of doing business through the “RFP process” is creating a bidding war. It’s a numbers game putting all short-listed firms into a race to compete on price.
The RFP process also typically includes minimal interaction with bidding firms, opaque timelines, politically-driven decision-making, and vague logic in the final decision.
There is an illusion of control for owners. On the surface, it seems like a good thing to gain negotiating power and to have less money come out of your pocket. But, this transactional thinking and intentionally fuzzy process actually places owners in a troubling spot.
If we can pull back the curtain on the illusion, what owners are really doing is setting themselves up for unsustainable growth. How so?
- Exposure to risk without a true working relationship or authentic connection with the service provider.
- No attempt to solve the larger problem behind the problem in your organization.
- Stuck in a one-size-fits-all solution that limits your ability to meet the needs of a changing industry, business climate, customer expectations, or unprecedented disruption such as COVID-19.
What’s the solution for owners? Embracing a collaborative and relationship-focused mindset as part of a new approach to engage firms that can provide solutions based on value and impact, not price.
The Value of the Relationship to Achieve Growth
To be very clear, when we talk about relationship-building, we’re not encouraging more tee times with bidding firms. We’re talking about fostering a culture of transparency, collaboration, and open dialogue with bidding firms.
This is a monumental shift for many owners who are accustomed to making decisions based on who made the best impression on the golf course or in similar settings. It’s no longer about both sides giving each other the effusive attention they crave.
For owners that truly want to grow, it’s about achieving buy-in throughout the organization that authentic connection is the key to long-term growth. It’s about the long game, not the traditional short game that misses the point.
As buy-in is achieved, your questions will start to change in a very productive manner. Instead of asking who will win the race to the bottom on price, your conversations will start to change:
- How can we find solutions that help us stay competitive, increase profitability, and engage changing stakeholders?
- Do the bidding firms really understand our company and the industry?
- Can the bidding firms solve the hidden or larger problems in our company?
Engage Service Providers With Comprehensive Solutions
I often talk to owners that are concerned about peeling back the curtain too far during the bidding process. It’s the idea of not wanting to expose too much about what’s happening in the organization that highlights the need for a larger solution to solve a larger problem.
I get it. It’s a cutthroat business. Which is why the relationship is critical. When you build authentic connections with bidding firms, you can start eliminating potential service providers from your short list that simply want to bid on price and stay within the confines of the RFP.
What you want to do is pursue smart service providers that are interested in building authentic connection and working collaboratively to solve the larger problem.
This requires a mindset shift from the owner perspective of looking for solutions and impact from bidding firms, not just looking for convenient, politically-driven selections.
Leaders that are involved in the RFP response process should encourage open dialogue with potential service providers. Transparency is difficult. But, it’s worthwhile to start opening doors to collaborative thinking that can help solve the larger problem within the organization.
Then, when it’s time to select a bid for the project, your team will be equipped to identify comprehensive solutions. The characteristics include:
- Based on value and impact;
- Aligned with the business and political issues in your organization;
- Can advance project scope in a collaborative manner.
When you start working with firms that are interested in helping solve the larger problem, your company will be better positioned for long-term growth. You’ll become more adaptable, flexible, and capable. You’ll also have access to support from business partners that help your company intelligently respond to new challenges, such as COVID-19.
Find Support Embracing New Thinking to the RFP Process
Did your organization receive a wake-up call during this year’s health crisis? It may be time to embrace a new way of thinking about engaging potential service providers.
– Don’t lock yourself into a limited solution based on price with no authentic connection to support your company in a difficult time.
– Do focus on collaborative thinking, transparency, and relationship-building that leads to comprehensive solutions to solve the larger challenge your organization is facing.
Ready to change how your organization approaches the RFP process? Our proven methodology, The Connection Process, helps owners leverage connections to create faster, more sustainable revenue. With it, organizations grow in a more collaborative and intelligent way.
Let’s have a conversation about how to utilize our methodology in your organization to foster productive relationships that can advance project scope. The recovery period of this year’s disruption is the ideal time to start thinking through this transition. Contact us today to discuss.