Writing Better about Risk: Tip #2

Many RFPs require narratives on the bidder’s understanding of risk and approach to risk management.  Often, what bidders provide wouldn’t be out of place in a textbook: plain-vanilla risk management processes that lay out standard identification, assessment, and mitigation steps.  Boring!  Worse, they show no sign of being tailored for this scope of work: Indeed, they show no sign of ever having done this scope of work. 

Now, granted, clients can do better than to ask about “approach.”  But even if they do give you this fuzzy question, it’s not that hard to do a better response.  Start by thinking about things from the client’s point of view. 

Size

Size may not be everything, but it can be a big thing.  So how big is this opportunity?  No, not in the sense of your anticipated revenues!

How big is it compared to the client’s entire operation? Quite reasonably, they’ll fuss more about relatively big honking activities than teeny-tiny ones.  Adjust your approach/response accordingly; for example:

  • Add dedicated staff where it makes sense to maintain control of outcomes.
  • Implement better performance monitoring systems and techniques so you get early warning of any problems.
  • Give clients direct access to performance-monitoring technology.
  • Communicate more frequently with the client about how things are going.

How big is it compared to the typical contractor organization?  Is the client likely concerned about potentially bankrupting a contractor, forcing them into default, or overwhelming their capacity to do good work, just because the contract is relatively large?  Explain why that won’t happen to you:

  • Show that you’ve successfully handled similarly scaled contracts before.
  • Explain how your proposed organization for the work, and your corporate organization, can accommodate the effort.
  • Highlight your financial depth.
  • Offer parental guarantees, if applicable.

Size and Scope

Is the opportunity so big and/or so complex (think pretty much any design-build activity and equipment or system development/acquisition) that several companies will have to work together?  If you have partners or major subcontractors, address the client’s legitimate concerns:

  • How will the companies manage their interfaces, both contractually and practically, day-to-day?
  • Who will be responsible if things go south?  How will they even know that things have gone bad?
  • What’s the back-up plan if one company fails?

Thinking about risk from the client’s point of view allows you to submit a better risk-management response, in whatever form it takes, and also to show risk awareness throughout your entire proposal.  The company marketers don’t always like it – they often see it as negative – but nothing says “Been there, done that, and done good!” more clearly than a good risk answer.

 

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