Selecting the right partner to help solve key strategic problems is one of the more challenging tasks organisations must navigate. Companies try to find and select a partner based on (sales) information gathered through a Q&A style RFP (request for proposal) process where they try to assess whether the consultant is the right fit for the organisation. However, often this process has commenced whilst there is existing ambiguity about the actual problem that needs to be solved. The RFP process has been around for decades and both clients and vendors have had to develop teams and processes to deal with them. But do they deliver the expected value, both for the client and the vendor? We don’t think so.
Selecting a vendor by RFP would seem to make a lot of sense. The RFP helps you to objectively evaluate each potential consultancy on its merits compared to competitive capabilities. You ensure each potential supplier answers the same questions. You get a clear view of the capabilities, approach, leadership, team, and pricing.
However, quite often, the reasons for choosing one consultancy over another are anything but objective. Values that contribute to your selection decision, such as innovation and client-vendor chemistry, are hard to quantify. We think using a rigid, pre-determined checklist as the basis for selecting a consulting services provider is a sub-optimal way to finding the best partner.
On both sides, significant effort is wasted writing the perfect RFP or preparing the perfect response.
- For clients: An average of 31hrs is spent writing the RFP
- For consultancies: An average of 26hrs is spent writing the response
- RFP response turnaround time is over ten days for more than 40% of RFPs
- Larger consultancies will respond to over 150-200 RFPs per year (winning on average less than 30-40% of these)
On top of the obvious time and energy that is wasted by preparing an RFP and going through the process, there are three key reasons why both clients and consultancies should push to avoid the RFP.
A. For clients
- You restrict the potential impact: You only get answers to your questions with an RFP-style, question-based approach. There is limited opportunity for the consultants to understand the context, the complexity, and the exact outcomes your organisation want to achieve. In addition, there is limited space to innovate and create ways to solve the problem. In some cases, the client team preparing the RFP is also not an expert in the matter they are seeking advice on, so the questions in the RFP are not even the right ones to ask.
- What you see is (not) what you get: Due to the complexity of the process and the competitive nature, consultancies have proposal teams made up of predominately salespeople and senior leadership working on the response. This means the team you see is not the team you get. In most cases, the team delivering the project is under-represented in the RFP response and even in pitch presentations. As such, the trust you are hoping to build is not with the actual team that will do the work.
- You ignore the intangibles: Long-term partnerships are the best client-supplier relationships with consultancies.. Like any partnership, it’s not just about deliverables, quality, or pricing. It’s also about intangibles. There needs to be chemistry between you and your consultant or strategic advisor. The working relationship is often more personal and emotional in nature compared to working with other suppliers.
B. For consultants
- Limited opportunity to differentiate: Responding to a set scope in an RFP means there is limited opportunity to reframe the problem statement, limited opportunity to show you have a different or innovative approach to problem solving, and usually means you will be compared mainly on a (like for like) price point.
- Low win chances: Most RFPs exist so the decision-maker can say they tendered it. There is an incumbent or a preferred partner the company wants to win in most cases. As a result, buyers tend to feed secret information, hints and suggestions and the decision is made in someone else’s favour before you even submit your proposal.
- Tendered business doesn’t stick: Even if you win the work, the same rules that forced the company to tender the RFP in the first place will kick in again for the next project and force them to host another lengthy RFP process next time, no matter how good a job your company does. By doing RFP work, you’re running on a hamster wheel instead of building long term outcome/ value-focussed relationships.
While the RFP process might benefit from well-defined activities that can objectively be reviewed and compared, we believe for strategic problem solving and growth opportunity ideation, a more collaborative process delivers a more optimal outcome, both for the client and the consultant.
The optimal approach, in our opinion, is for a shorter, more focussed, and collaborative approach, whereby through one or two workshops, both parties have an opportunity to get to know each other.
- Consultants can ask questions and really get to know the business and the key strategic challenges to solve.
- Clients spend quality time with the actual consultants which allows them to assess their capabilities, their experience and identify if there is cultural fit and personal chemistry.
Unlike a conventional pitch process, the workshop approach mirrors how clients and consultants would work in real life. And, of course, it provides for tremendous savings and minimises disruption to the client’s business.
So, next time, skip the RFP process.
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