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The Two Things (Most Likely) Wrong With Your SWOT Analysis

Whether you love them or hate them, SWOT Analyses have been around for many decades, and they continue to pervade the realm of business development and strategic decision-making, most commonly in competitive assessment.  I could talk at length about why these simple quad charts have garnered so much attention (both positive and negative) over the years, but I won’t.  I continue to see value in SWOT analyses, but only if they are done properly and completely. What I want to talk about is what almost everyone does WRONG with SWOT analyses. In my experience, the two most common mistakes that rob a SWOT analysis of real value are: (1) failure to understand what an “opportunity” is, and (2) failure to take the essential next step after a SWOT analysis has been completed.
  1. Opportunities misunderstood.
swot-analysisThree out of the four components of a SWOT analysis are relatively intuitive, and easy to understand.  Everybody knows what strengths and weaknesses are – but if you need a definition, they are internal (i.e., indigenous) characteristics that either enhance or undercut a company’s competitive position (i.e., increase or decrease their chances of winning).  Similarly, everybody knows a “threat” is something from the outside (i.e., external) that can undermine or hurt a company’s chances of winning.  Okay, good so far, but what is an opportunity? Before I define what an opportunity is, let’s be clear on what it is NOT, because this is where 90% of SWOT analysis efforts get completely derailed.  For the vast majority of “completed” SWOT analyses that I have examined, the “opportunities” quadrant is populated with items related to the company’s business case.  They are factors that would provide a potential long-term benefit to the company IF they should win the competition in question.  You could precede each one with the phrase “If I win, I’ll be really happy because … [fill in the blank].”  For example, a very common item to appear in the opportunity quadrant is something along the lines of “Potential for new revenue stream with this customer.”  These kinds of observations are important and useful, but they speak more to a company’s incentive or motivation to aggressively bid and win the competition, rather than the company’s strategic position. This misuse of “opportunity” is understandable, because the word “opportunity” in the parlance of the federal contracting community (and particularly business development) is primarily used to refer to contracts or programs that the company would like to win (i.e., potential business).    But unfortunately, this definition does not fit well in the context of a SWOT analysis. In the context of a SWOT analysis, an opportunity is an external factor that enhances a company’s chances of winning. A few examples of opportunities might include (a) increased customer demand for a product or feature the company possesses, (b) competitors’ losing ground or exiting the competition altogether, or (c) change in government regulations in favor of a technology unique to the company. When properly understood, this kind of “opportunity” fits nicely into the framework of the four-quadrant SWOT chart, because the top row (strengths and weaknesses) are both internal characteristics of the company, and the bottom row (opportunities and threats) are both external factors.  The left column is positive, and the right column is negative.  Behold the beatific symmetry! These kinds of “opportunities” – external factors that give a company a competitive advantage – are infinitely more insightful, because they empower analysts (and decision makers) to thoughtfully and rigorously assess another company’s most probable strategic actions.  They complete the picture, instead of leaving a gaping hole in the analysis, which could potentially lead to competitive blind spots.  Not to mention, external factors are often the very issues that make the most significant difference between a company winning or losing a competition. This leads us into the second most common mistake of SWOT analyses – failure to respond appropriately – which I will address in the next section.
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Trust the Process: More than Checking a List

Price to Win is always an ongoing process, which undergoes many iterations before an actual proposal is ever delivered.  Richter & Company’s training courses are designed to give you the tools and templates you need to maximize the benefit of your competitive intelligence and price to win efforts.  Actionable intelligence is derived from following the process, while trusting the skills of your analysts to deliver quality results to your capture team. ChecklistBut it’s more than simply checking a list:  the process is designed to lay the foundation of your winning proposal. Plan work based on requirements.  Designate resources.  Can you deliver on the work proposed?  Although it sounds obvious, make sure you’re bidding on work you can and should win. Baseline the opportunity and customer.  Spend some time getting to know your customer, and what they’re actually looking to buy.  Get to know the contracting shop as well as the end user, and understand that you’re going to need to address all customers in proposing your solution. Identify and analyze the overall competitive field.  Identify who else is going to bid, and their relationship with the customer.  What does their solution look like?  The competitive field will change as time goes on:  who has left the competition, and why?  Who has joined the competition, and why?  Identify any teammates and suppliers, and determine how their addition to the team will affect solutions, and pricing. Develop and test RFP-based models.  Forget the gold plating, and the standard set by the competition.  Build a bottoms-up model, based strictly around RFP requirements.  How will your solution add value?  Rank your solution based on the requirements set forth in Sections L & M. Prepare analysis of key competitors.  Once the RFP is imminent, look again at your key competitors.  Identify strengths and weaknesses of their solution.  Mitigate their strengths by offering value to the customer.  Speak to the things they care about, and emphasize your own strong, low-risk solution.  Ghost weaknesses by highlighting your own strengths.  Be aware of how competitors will leverage their solutions and ghost your company. Evaluate and rank key competitors.  Build out solutions for your competitors.  What is their offering likely to include?  How will it be received by the customer?  Be sure to do due diligence in looking at past successes; what stories will they tell?  How will they game their solutions? Identify and analyze pWin enhancers.  Once your analysis is complete, it’s time to finalize your story.  Identify any final solution gaps, and address them:  team as necessary.  Close in on any gaming opportunities.  And decide on your key messages and discriminators that really differentiate your solution from your competitors. For more information regarding Competitive Analysis and Price to Win, contact Richter & Company.  Since 2006, our proven processes have helped clients win over $30B in new business.
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LPTA Awards: Sad to Say, They’re Not Going Away

AwardOver the course of the past several years, “best value” has reigned supreme in the federal contracting world.  But with the economic downturn, we’ve seen an increase in Lowest Price-Technically Acceptable (LPTA) contracts.  Despite the general aversion for LPTA awards, they’re here to stay. Last summer, Washington Technology did a survey among contractors regarding LPTA contracts.  68% of the survey’s respondents said the LPTA has negatively or mostly negatively impacted their businesses; pointing to suffering profits, lowered salaries, and an influx of junior staffers as results of increasing LPTA awards. And 66% of respondents said the LPTA has negatively or mostly negatively impacted the customer.  Comments included the government’s surprise in receiving junior staff when experience was needed, and an inability to win task orders under BPAs due to lack of experienced personnel at proposed prices. Work has been done on both sides of contracting business to assure that the government’s needs are met, while educating government customers about the risk of an LPTA award.  But with ongoing political power plays and uncertain budgets, the LPTA award isn’t going away any time soon.  Nearly half of contractors surveyed think the number of LPTA awards will increase in the next few years.  At Richter & Company, we agree. With many agencies having troubles in their contracting shop, and plenty of commoditized items on the purchasing docket, the LPTA is a convenient way to purchase.  Unfortunately, the convenience outweighs the risk.  The LPTA award isn’t going away any time soon.
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Making the Call: Competitive Analysis

At Richter & Company, we make the call.  Primary research– actually talking to people within industry– provides quantitative data we need to make sound analysis. On most projects, there are 150 to 300 contacts that we reach out to.  In our consulting role, we have flexibility in reaching out to companies as a third party.  Because we’re not vested in an opportunity, we have the ability to ask about the opportunity, problems with the procurement, the competition, and likely solutions. Primary research faces the largest risk of disinformation- any business development manager can offer unreliable information, but it also offers some of the most valuable data points.   Statistical “outliers” can be set aside for further review or examination, but the aggregate of information presented in calls paints a pretty accurate picture of the competitive landscape of a program. Sound and accurate analysis is built on both qualitative and quantitative data.  The more thorough the research efforts, the more we can provide you with actionable intelligence for your capture efforts.  For more information regarding Richter & Company’s services, contact us.
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The Framework of Competitive Analysis

Competitive analysis can be a daunting task.  At Richter & Company, we believe strong, reliable processes build the foundation and framework for sound, defensible analysis.  Competitive analysis can be broken down into three parts: Business Intelligence forms the foundation of competitive intelligence.  It focuses on quantitative numbers, like financial metrics and number of units produced.  Business intelligence consists of solid, irrefutable data points that define a company. Competitor Intelligence lays out the framework for analysis.  It is made up of quantitative data (business intelligence) and qualitative data.  While quantitative data defines, qualitative data describes.  Capabilities (general and specific), relevant news and identified past performance help characterize a company as qualitative data points.  We can define ‘competitor intelligence’ as information specific to a single competitor. Competitive Intelligence enhances competitor intelligence through inclusion of environmental factors (political, economic, social, etc.).  Experienced analysts help determine how these external factors will affect the competitor intelligence gathered.  Companies can then be assessed against one another in some kind of objective evaluation, mimicking the source selection board decision-making process. Richter & Company has been using this framework for competitive analysis to help clients win more than $30B in new business since 2006.  To find out we can help you win, contact us today.
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SWOT to Strategy

Many companies include the SWOT chart as part of a competitive intelligence presentation.  They spend a lot of time preparing the strengths and weaknesses, opportunities and threats, and creating a beautiful image.  And… that’s it. SWOT charts were designed to be springboards for creating strategies.  What products or services will the company leverage?  How will they differentiate their offering?  What story will they tell?  What are their weaknesses?  Are they aware of them?  How will they mitigate those weaknesses?  How are they perceived by the outside market?  What kinds of opportunities and threats exist outside of the company’s control? Strengths identified in other companies should give you incentive to bolster your own solutions.  If your solution is not as capable, or desirable, should you be bidding?  Opportunities allow you to assess how your own company will be viewed, and where you can maximize play in a potential marketplace. Weaknesses and threats can be turned into ghosting opportunities.  How can you capitalize on potential (or perceived) risk?  How can you differentiate your own offering to highlight an area of weakness in another solution? SWOTs can be extremely valuable tools, if they’re used correctly.  Contact Richter & Company today to find out more about positioning and strategies that help you win.
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New Year’s Resolutions for the Contracting Community

2015 means new opportunities.  Not just in terms of upcoming contracts, but within your organization as well.  Here are some suggestions on how to make the most of opportunity knocking: Use the No Bid.  There are far too many companies that feel like once they’ve invested B&P dollars, they must bid an opportunity.  Encourage your team to use discretion in walking away from a contract.  Gate reviews serve as great times to assess your company’s decision to pursue an opportunity.  If you don’t have a convincing story for winning, don’t waste your time. Invest In Your People.  A successful business is comprised of successful individuals.  Take the time to define your company’s mission, capture strategies and tools for success to each of the members of your team.  Give your employees the tools they need to communicate effectively with each other, and provide outlets for feedback for management.  Enter them in training courses, and allow them to continue growing as business professionals. Invite Consultants to the Table.  Need someone to come in to enforce the resolutions for 2015?  Outside consultants can work free from your company’s biases and management’s (possible) backlash.  Too many teams drink their own kool-aid:  thinking their wrap rates can’t possibly be lowered or that their incumbent status ensures contract victory.  Consultants can help confirm assumptions, bolster your team’s strategies, and help you win more business. About Richter & Company Richter & Company is an industry leading competitive intelligence consulting firm whose services have helped clients win more than $30B in new revenue since 2006.  Please visit www.richterandco.wpengine.com for more information.
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Finishing Strong: 3 Habits of Winning Teams

Winning federal business dollars is cutthroat business.   Especially in today’s hypercompetitive marketplace where LPTA contracts now represent a third of contract awards, and large ID/IQ vehicles reign for maximum value to the government. Winning teams work hard to win.  And many differentiate themselves from the competition in how they handle a contract post-award.  Here are three habits of highly effective teams:

1.        FOIA Bids.  The Freedom of Information Act is a wonderful thing, but few companies actually take advantage of available information.  FOIA your own company and bids, and make sure they’re redacted properly.  Check out your competition on contracts; find out what they’ve redacted.  And what they haven’t.  FOIA requests are generally long lead items, but they can provide wonderful information.  More data points equates to better analyses which equates to better strategies which equates to winning more business.

2.       Do a “Lessons Learned” Session.  Win or lose, it’s critical that you leverage information to preposition for other bids.  Attend the outbrief; find out what the Government has to say about the award.  Pull your team together, and discuss key takeaways.  Document internal processes that worked, and those that didn’t.  The more cohesive your team is, the more effectively you’ll work, and the more business you’ll win.

3.       Begin preparing for the recompete.  What is proposed is not always what is delivered.  Winning teams know that their performance matters.  From Day 1 of the contract start, they’re aware that they’re building the story for their next proposal.  They work to deliver what they proposed, have strong communication with their customers and are able to use each contract as a positive reference.

Are there other post-award habits of winning teams you would add to this list? About Richter & Company Richter & Company is an industry leading competitive intelligence consulting firm whose services have helped clients win more than $30B in new revenue since 2006.  Please visit www.richterandco.wpengine.com for more information.
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Richter & Company to Offer New Course

Richter & Company has a new independent course offering:  Investigative Techniques for Competitive Analysis.  The one-day course will be piloted July 15th. Investigative Techniques for Competitive Analysis focuses on providing insight on how to effectively and efficiently collect unpublished competitor and customer information, giving you the competitive advantage in any pursuit.  The class is designed to help attendees further develop their skills in collecting valuable competitive intelligence using methods which are both effective and ethical. Richter & Company’s courses are offered as one-day, public environment workshops involving instruction and hands-on group exercises.  The classes are also offered as Private Onsite Training sessions tailored to the specific needs of your organization.  For more information about attending a course, visit www.richterandco.wpengine.com/services/training. About Richter & Company Richter & Company is an industry-leading competitive intelligence consulting firm whose services have helped clients win more than $30B in new revenue since 2006.  Please visit www.richterandco.wpengine.com for more information.
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Avoiding Proposal Mistakes

In an effort to spread the love this Valentine’s Day, we bring you five mistakes of proposals.  In the federal contracting world, of course. Ignoring the person your proposal is for.  Talk about what your customer needs and wants.  Be in tune with their requirements, both explicit and implicit.  Spend some time getting to know what exactly they’re looking for with the solicitation.  And then speak to that, not what your corporate objectives entail. Not getting permission beforehand.  If you don’t have early management, buy-in, you’re going to have a hard time getting the time and dollars you need to win business.  Communicate about everything:  schedules, resources, B&P dollars.  Get management, capture teams and consultants like Richter & Company involved early in the opportunity lifecycle. Talking about yourself.  Watch the number of times you mention yourself compared to your customer.  Don’t talk about yourself, your capabilities, and your solution the whole time.  Speak to the benefits of your solution from the customer’s standpoint, rather than the features your company offers. Being late.  If you can’t be on time with your proposal submission, don’t even bother. Making promises you can’t (or don’t intend to) deliver.  Whatever your proposal entails, be sure that you can deliver.  Terminations and off-ramps are crippling to your business, and in a hyper-competitive marketplace, you can be sure someone else will step in to deliver what you couldn’t.  If you propose it, do it.