Commando Consulting: September 2008 - Writing and Submitting Consulting Proposals With Clients' Businesses In Mind

by Tom "Bald Dog" Varjan, Organisational Provocateur

Summary: Many consulting firms make the mistake of skimping on marketing to save money, and rejoice when they count how much they've saved. But this joy is rather lost-lived when they realise that if they don't market, they have to engage in the ultimate money-wasting activity: Responding to request for proposals and battling it out on price with purchasing and procurement departments and being treated as fungible vendors. So, this month we discuss how consulting firms can improve their processes of writing and submitting client-centred proposals to real buyers and avoid the dreaded bid-judges of purchasing departments. If you like the idea, then read on and enjoy. Audio Version (MP3): 48:35 .

Have you ever read consulting proposals that firms have submitted to competitive bids based on request for proosals (RFPs)?

You most probably have.

What have you noticed?

What I've noticed is that these proposals are full of seller-centred materials, superlatives, useless platitudes, features, processes and good ol' self-aggrandisement.

What many consulting firms fail to realise is that there is a world of difference between a proposal submitted to a competitive bid and a proposal submitted to a committed real buyer.

In my experience, similarly to HR departments that are single-handedly responsible for hiring the most incompetent and hopeless employees, purchasing departments are single-handedly responsible for engaging some of the most incompetent external service providers.

Unlike real buyers who are real decision-makers with real business issues in search of real solutions as worthwhile investments, purchasing departments are scanning the horizon with superficially exciting RFPs in search of some poor suckers who are willing to move heaven and earth to make this company more profitable for some chickenfeed in return.

So, what is the result?

Well, the best of the best don't even bother to respond to RFPs. And many of the ones who do respond, burn their fingers and stop responding in the future.

So, What's The Problem With RFPs And RFP-Based Consulting Proposals?

I think the biggest problem is that they are written for the wrong purpose by the wrong people and from the wrong perspective.

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." ~ Sun Tzu - The Strategic Arts

Wrong purpose: If the initiative were important enough, the C-level executives would coordinate the search effort using not RFPs but their own contacts. There would be a "boardroom-level" involvement and commitment to find the right firm.

Wrong perspective: RFPs are too tactical with no regard for overall organisational strategy.

They are activity-based not achievement-based. Using sniper's language, RFPs give minute details about every step that must be performed to load a rifle, to aim a rifle and to to shoot a rifle, but miserably fail to specify the target.

One of the reasons for this shortcoming is that the folks at purchasing and procurement are not involved in their companies' strategies, have no idea in what direction the company is heading and where. In most companies, these "boardroom" topics hardly ever trickle down to the lower levels of management, like purchasing.

One commonality of competitive bids is that bidders are expected to do extensive pre-proposal work and then submit detailed proposals.

And here is the flaw...

They have to present solutions to something they've never had a chance to diagnose. They have to present a remedy based on, using medical language, the patient's self-diagnosis.

In the medical world this is unethical, and the doctor can lose his licence and may even land in prison.

In the consulting world it's daily practice. Go figure...

Evaluation Of Consulting Proposals Based On Competitive Bids

RFPs are looking for some interesting features in bids, but none of these features is high ROI.

They are seeking low cost. Well, this is clear. Any moron can measure costs with the appropriate measuring stick, but estimating ROI requires judgement and discernment. And that requires special knowledge and experience of the topic where external help is sought.

The other evaluation criterion is schooling.

For instance...

"Each member of the consulting team must have an MBA"

What does that mean? It only means that candidates went through a course where 56% of students openly admit to cheating and lying to obtain their credentials. Just Google "Academic Dishonesty in Graduate Business Programs: The Prevalence, Causes, and Proposed Actions".

In a 2005 study by analysts at Wetfeet, over 800 students, who pursued careers in management consulting, were asked: "Please select up to three factors that make your top ranked company appealing to you." Only two (0.25%) people said that "Ethics" was one of their top 3 factors for choosing a consulting firm. Even the category "Others" was rated more highly than "Ethics."

But the problem is that over the years the MBA has become so much the be all and end all of business acumen that bid evaluators blindly believe that anyone with MBA behind his name is, by default, a business genius.

Do you remember the phrase...

"No one's got fired for buying IBM."

And this was the purchasing agents' mantra even when there were better solutions than IBM.

So, the new mantra is...

"No one's got fired for hiring consultants with MBAs."

Purchasing agents, just like their HR colleagues, being laypeople at the topics they're hiring people for, are looking for easy comparisons and blind conformism to the - usually incorrect due to self-diagnosis - RFP.

Any deviation from the RFP causes instant disqualification. That's why freshly-minted MBAs have a better chance to qualify for RFPs than a 20-year successful consulting veteran with blue chip clients but only a college diploma.

Wrong people: Competitive bids are evaluated by bureaucrats not businesspeople. Some of these bureaucrats may have MBAs or other impressive-looking business credentials, but most of them have never run businesses. (Hey, that's why they are bureaucrats). So, how can they evaluate a business proposition?

One of the backup food inspectors, who sometimes comes to inspect the meat at my joint venture farms where I slaughter, is a vegetarian. It's interesting to see how disgusted she is doing her job. And it's not her fault. It's the moron's fault who's hired her.

She would rather die than taste the food she "inspects". Ridiculous.

Some Requests for Proposal Examples

Here are some sections I've collected from RFPs. These RFPs are typically documents of 100 pages or longer.

What you can see is that they're full of tactical bits and bobs without strategic overview.

The largest part of the RFP is logistics.

A ridiculously small section is dedicated to describing the current situation which the solution is meant to improve. And even that is just guidance because the solution has already been decided for, and buyers are looking for muscle power to do the work.

You have to give a detailed description of the people who are doing the work. Resumes, etc.

You have to describe in minute details how you plan to manage the project including each person's working hours.

Detailed breakdown of your your fees.

References.

Terms and conditions.

What is not mentioned in RFPs includes...

Bits and bobs that could make the engagement even a little bit transparent (peer-to-peer).

The objectives clients want to achieve through the initiative the RFP calls for.

The objective (measuring sticks) and subjective (discernment and judgement) milestones to map the project's progress.

Qualitative and quantitative value which the client derives from successful implementation.

So, basically the RFP process is similar to hiring a sniper, specifying to him how many hours a day he has to work and chase the target, what type of rifle to use, how to use his rifle, what types of sniping degrees to have and what sniping associations to belong to, BUT not telling him who the target is. The idea is...

"Oh man, just keep shooting and sooner or later you'll hit the target!"

But this is retarded.

So, what we can conclude from RFP-based consulting proposals is that they are full of seller-centred stuff, which purchasing departments use to qualify bidders. But purchasing departments usually qualify bidders based on the wrong information.

So, Shall We Avoid Request For Proposals And Look For A Better Way?

I say yes. They are just too costly to respond to and the return is too dismal.

Just one thought...

Which firms engage in bidding? Usually the firms that suck at marketing and can't generate demand for their services. And this includes firms that have "brand recognition" up to their eyebrows. The question is who recognises that brand? High level buyers and decision-makers or low-level flunkies and opinion-makers. I reckon, it's the latter.

Yes, RFPs seem to be tempting and may even look exciting on the surface, but dig a bit deeper, and see their real natures.

It's like Craigslist. You have to go through a thousand career ads to find one that is worth responding to. Most of the advertisers are so bottom-achingly dumb that they don't even give out the names of their companies, hence totally wrecking their credibility. And many of them are plain scumbags.

Since I've been teaching career management as a volunteer for a few years now, I keep my eyes on what's going on out there. Sometimes I even respond to some positions, but the results are pretty dismal.

And based on my years of teaching this career stuff, I've concluded that what purchasing- and HR departments have in common is that they make sure that the most talented and qualified experts to advance their companies' success can never penetrate their companies' walls.

The main reason for that is that the vital few (the 20% that makes 80% of the difference) don't even apply for jobs and opportunities in the same way as the trivial many (the 80% that makes 20% of the difference) does.

And since purchasing departments don't tolerate deviation from their prescribed RFP processes, these innovative folks don't have a snowball's chance in hell to be hired.

The other point is that the best of the best don't waste their time and effort on seeking out opportunities through purchasing- and HR departments. They go to the very top. They're seeking peer-to-peer relationships with real buyers who can make hiring decisions and are able to pay for quality.

So, How To Handle Client Based Consulting Proposals?

Proposals are not enough. We have to re-think the whole proposal process from request for proposal to the submission of proposal. And we have to rethink it from the angle that potential clients seek us out, and we decide to accept or reject them based on whether or not they fit into our PCP (Perfect Client Profile). The PCP consists of three parts:

1. Perfect buyer: Is the relationship with the buyer to your liking?


2. Perfect company: Does the company have the potential to improve and prosper as a result of your help and support?


3. Perfect engagement: Is it the kind of engagement which your people would enjoy working on?

Unless you get "Yes, yes and yes" to your questions, the best bet is to reject the prospect before it's too late. There is no point in accepting less than perfect prospects. And the good thing is that the kind of prospects your firm attracts depends on your marketing, and positioning within your marketing strategy.

So, let's look at some points how to improve the proposal process...

Document Exchange Before Telephone Conversations Or Face-To-Face Meetings Take Place

Some prospects are adamant to meet you right away upon the first contact. Don't give in to the temptation. You probably have a set of pre-meeting documents prospects have to fill in to give you a detailed background on their businesses, so you can better prepare for meetings.

Also, in my experience the prospects who want to meet you too quickly are the ones that are likely to demand that you give them the price but refuse to talk about their issues. It means, you can't have a value-based conversation.

Creating Client Value Before Submitting Consulting Proposals

I believe the writing and the submission of a proposal should be the culmination of a process from which prospective clients have already received significant value. But there is one big point to consider. Value should be delivered only to prospects who are likely to become clients.

In a way this is like dating. All right, under a certain age we date for a quick shag in the haystack. But over a certain age we date to find a life partner. And the dating process ends when we ask our spouses to marry us. But by the time we ask this question (equivalent of a proposal), the answer is about 99.9% yes.

Consulting proposals should be the same. We have to do enough "dating" to create the atmosphere in which we can ask for the prospect's business and reasonably expect a "yes"...

So, what creates value before writing and submitting consulting proposals?

We have to pretend that we've been already hired and offer prospects the same kind of experience they would receive after hiring us. Since this process takes time and effort, we have to filter the prospects for whom we offer this "courting" treatment. Since there can be only so many people we're dating, there can be only so many prospects we can put on our dance cards for courting. We can waste lots of time, money and effort if we get bogged down with tyre-kickers. So, good screening is very important.

No Sales Pitch But Honest Unbiased Diagnosis

To create trust, we have to come across to prospects as business physicians not as commission-hungry salespeople.

Now some people may say, that "you have to sell to earn a living."

Yes. Doctors have to sell too. And they do.

But the way doctors sell is by diagnosing patients and asking them...

"And what do you intend to do about it?"

Good doctors don't try to convince patients to undergo the kind of treatment that makes a pile of money for doctors but may be detrimental to patients. Well, of course, there are scumbag doctors who are nothing more than glorified pill peddlers (The Pill Pushers: Georgia Straight, 4-11 September 2008, page 39-40), but here and now let's talk about good doctors.

So, what sells doctors' services? Not the pitch but the diagnosis.

What they practise is selling by doing, not selling by promising (a better future), selling by manipulating (emotional hot button pounding) or asserting (their credentials). Patients can actually sample of what's waiting for them if they enter a treatment regimen with this specific doctor.

And I believe this is what consultants should do too. Demonstrate their capabilities and the value they can offer to their clients, instead of asserting their features and credentials.

Client- And Result-Centred Proposals

Far too many proposals are seller-centred. They talk about consultants' credentials, number of MBAs per person, what they've done in the past and what tasks they are going to do in the proposed project.

What is missing from most proposals is what clients can expect to get from the successful implementation of the proposed initiative.

And sadly, as a result of this miscommunication (According to a study by McKinsey)...

75% of solutions don't return a profit to sellers.

50% of solutions don't deliver the expected value to clients.

So, consultants can brag about their credentials and methodologies, but even when they get hired, the results are pretty dismal.

UK-based consultant, Mick Cope has put it this way in an interview for Management Consulting News. Mick emphasises the importance of client relationships and the need to spend time exploring client needs and diagnosing the current situation, knowing that whatever consultants help clients to achieve, it is built on the current situation...

"In the UK at the moment there is a serious shortage of tradesmen, plumbers and good builders, for example. You get two types here, the cowboys and the real tradesmen, the experts. Now, let's say I have a plumbing problem, and I tell the plumber, I want you to do this to fix it. The cowboy says, okay fine, he does it and takes my money and runs. The tradesman, because he is proud of his craft, will say, I value what you, as a client, believe, but I have to look into this plumbing system and understand it, otherwise whatever I fix is going to fail later."

I always suggest to clients that when they start working with a new client, first they should have a small project, which is an extensive diagnosis of the client's current situation, and the end of the project in a group discussion, facilitated by the consultant, about the current situation and potential courses of action.

At this point many consulting firms run presentations, but presentations are prescriptive and not collaborative. Hence they are commodity.

In my experience, perceived value goes up in direct proportion with the client's involvement in the whole project. This is why I'm an advocate for implementing team provided by the client's company not by the consulting firm.

I believe a proposal should be a document which prospective clients read with excitement and enthusiasm, so they can feel the burden of the current condition and the tingle of the improved condition in their bodies. That is, it should be more than intellectual head-nodding.

It's like a marriage proposal. I've never tried it yet, but I believe when people propose and ask their spouses to marry them, they expect a bit more than an apathetic...

"All right. Whatever makes you happy."

Repeating Previous Conversation

Since proposals are based on previous discussions, it only makes sense to use the same words and phrases when writing them. It's an error to bring in new thoughts and phraseology at this point. It may strike your prospects as not fully understanding what prospects really want to achieve.

The reason for this approach is that a proposal is merely a written summary of an already made agreement. If we bring in new words, phrase and concepts, we can create confusion in buyers' minds and lose a 99% done deal.

The other mistake many consultants make is that they start pitching their other services in their proposals. The danger is that buyers may decide to ditch the service they're about to buy, and ask you to tell them more about the other services. And now you have to start from scratch to sell a different service.

Maintaining Clarity In Your Communication

Since I've learnt most of my business acumen in the trenches by practising and screwing up, I've never had the opportunity to learn the obfuscated business-mumbo jumbo most business schools teach under the aegis of business communication. So, my communication is fairly straightforward.

I keep it simple because it's a big enough challenge for people to claw their ways through my accent, so I keep my language free of jargon and highfalutin bullshit, also called consulting speak.

Of course, sometimes even clarity doesn't work because your buyer has challenges in understanding English. A while ago I submitted a proposal to the president of a local high-tech company. The president was an award-winning entrepreneur with all sorts of education and achievements, but couldn't comprehend my summary written in plain English like...

Monthly meetings between the two of us to discuss strategy and longer-term growth issues.

Acting as an unbiased sounding board on various aspects of business development, so we can accomplish our objectives with higher velocity and probability.

Collaboration with your search engine optimiser team to create and optimise sales copy for various segments of your services and continually generated new content.

If appropriate, responding to other key managers' issues regarding content development on an "as needed" basis.

Working with key managers to set up and facilitate accountability reviews to make certain that everyone is on track and on the same page, so we can optimise the pace of progress.

If appropriate, assisting you to complete the business plan, and based on that we can craft marketing plans for each service in order of importance.

Situational responsiveness to needs which arise and you deem to require my help and support, which are not covered elsewhere.

Assistance in the preparation and execution of various tactics of the marketing plan.

The guy emailed me back to let me know that he couldn't decipher my gobbledygook and that I obviously didn't understand his needs. All the phrases were the repetition of the phrases we had used during our meeting.

Well, if a guy with English as a third language gave him a hard time, and then I reckon he should revise some of his high school English. I'm not saying that I'm an English professor, but Cambridge (UK not US) was a great preparation, and 20 years of practice (Since 29 June 1988, starting with zero English) should help to express myself clearly although with a hell of an accent.

I guess he didn't even want to understand me. I suppose these are the opportunities that are better to be lost than kept. Maybe he wasn't a true buyer just a real buyer's flunky and he was ordered to test the waters. Well, then I slipped on my qualification process.

Either way, I suggest we keep our communication straightforward and free of unnecessary "big words".

Focusing On How The Client Gets Better Off

A proposal should be like the timetable at an airport's departure lounge. By reading it you know instantly that you're likely to be better off after making the investment of buying a plane ticket. That is, you achieve your objective of getting somewhere on time and hopefully in one piece.

And, while a plane journey is carefully planned, many tactical steps of the journey must be improvised on the fly.

The timetable tells you the destination, when the plane leaves from which gate and when it's expected to arrive. It doesn't tell you about tactical steps like how many times the pilot will change gear or switch the windscreen wiper on and off.

You can express the expected improvement both in quantitative (ROI) and qualitative terms. This way you add both intellectual and emotional charge to the proposal. You also express how the client's company is better off (expected ROI) and how the buyer herself is better off (recognised and respected as an innovator in the organisation). As human beings, we all are seeking some glory too. After all, we're far from being perfect. In the words of the brilliant Dutch gothic metal band, Epica...

"Don't you deny that we're all human beings
We all have our flaws that can make ourselves obscene.
~ Chasing The Dragon by Epica (The Divine Conspiracy - 2007)

So, we all make mistakes, but in good peer-level relationships that are based on mutual trust and respect clients forgive us because they know they slip up too, and we'll forgive them too. Every good and meaningful engagement is full of little slip-ups.

Look at the scribble below and you'll see the point here. I got this a while ago from a project management workshop with Ed Kless, a fellow Verasage member. He explained to us that just because we're getting the work done, clients may quit too soon or force us to roll out an initiative before it's ready.

The problem is when workload goes up, people get overwhelmed and their confidence levels come down (First crossing). Many clients want to quit the project or roll out the initiative (Q) in the middle of this emotional upheaval and way before you can reinstate the workload-confidence equilibrium (second crossing). So, we have to be careful here.

Using medical language, engagement management must focus on both getting the work done (doing the surgery) and emotionally keeping the client on track and to make sure she doesn't lose hope (good bedside manner). I reckon for many consultants the emotional bit is the hard part. It's good to know that I'm not the only one here who needs to improve.

What Comes After The Engagement

During your engagements you probably ferret out some new areas for improvement. So, it's good practice to close an engagement with a section in your After Action Review (AAR) about possible next steps.

This is not hard selling. You simply put in your observations about what else you see your clients could improve if they decided to do so. Seeing the whole picture may give you a better idea of how to improve your proposal process and make it dovetail into the project itself.

During doing the work, we inadvertently diagnose situations we come across during our work, so at the end of the After Action Review we can write a small section on our diagnosis of related issues.

"As per our agreement, we've developed new and more effective financial indicators. But knowing that financial indicators are lagging (effect-based) indicators, I would suggest that you look into developing leading (cause-based) indicators that actually define your company's financial performance. Using sports language, we've built a brilliant score board. Now we have to make sure that our athletes actually improve and we get better scores."

Financial indicators are vital in any company. But they track effects. The next step could be working on an improving the causes.

What this approach demonstrates is that you are dedicated to help your clients to improve their businesses, not merely performing activities your clients tell you to do. This is a huge difference in positioning.

Summary On Writing And Submitting Consulting Proposals

We've gone way beyond proposals as mere documents, but I think it was important to go though the whole process all the way to the completion of the project. After all, the consulting proposal process is much more than the proposal as a document. Yes, we want to submit a kick-arse document, but what happens before and after submission are equally important, so we have to pay attention to them.

I've read in a McKinsey research report that over 60% of consulting proposals don't even trigger a response. Most of these proposals are responses to requests for proposals (RFP). I guess, this is partly because some of the buyers are not real buyers but searchers of free information, and have no intention to respond in the first place. The majority of the remaining 40% are rejected, and only a tiny percentage is accepted.

So, what can consultants do?

They can better select who to submit proposals to, and submit proposals only after a real discussion (in person or on the phone) with real economic buyers who can actually authorise projects.

And I also believe that it's perfectly all right to request some money even before submitting proposals. It shows the buyers' commitment.

So, look at your overall proposal process. The whole request for proposal process, how you write your consulting proposals and how you submit them to the right people.

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Recommended Reading

Taking Advice: How Leaders Get Good Counsel and Use It Wisely

By Dan Ciampa

Consultants spend a hell of a lot of time learning about how to give advice, but very rarely take time to step into their clients' shoes and learn how human beings take advice from other human beings, what they consider upon receiving advice, and how they decide whether or not and how to use the received advice.

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• Why many good leaders are poor at taking advice


• The four types of advice leaders are seeking


• The four types of advisors leader engage


• The attitudes and the behavioural patterns of good advisors

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