Isn’t It Time to Change the RFP Process…for Everyone’s Sake?

NEW-IMAGEI had one of those “YES!” moments reading a blog by Susan Abbott at IdeaStudio. I don’t know her or her company, but what she wrote about the RFP process – calling it a “barrier to innovation and productivity”—is so true that I wanted to share her ideas and a few of my own about Paradigm Learning’s experience with RFPs.

Let me start by saying that we love our clients and understand the often cumbersome procurement processes they deal with when contracting with providers like Paradigm Learning. For everyone’s sake, I think it’s time we get under the hood and poke around inside the typical RFP process. Here are a few of my favorite extracts from Susan Abbott’s blog post, A Modest Proposal About Procurement: Let’s Turn the RFP Process on Its Head:

 “While fairness (and consistency) are admirable when it is reducing corruption and patronage, it also suppresses merit…It favors the formulaic.”

From what I’ve seen, the procurement process often forces our clients to go overboard on “fairness” to the detriment of their own ability to understand a potential supplier’s thinking process, people, creativity, approach and overall merit. Suppliers get reduced to words on paper. We’re forced to answer in prescribed ways, inside a box, and without the client collaboration that builds trust and stronger solutions.

“The investment of time is all on the side of the supplier … the decision makers sometimes decline to meet or talk to suppliers being asked to bid. This is a major suppression of collaboration and idea exchange, which again results in a suppression of innovation.”

Responding to an RFP without the benefit of talking to the decision makers makes us have to guess what the words mean—a “read between the lines” exercise.  It’s unlikely we’ll guess right about everything, so our response won’t be as targeted to the client’s needs…which, in turn, can add frustration, time and expense to the entire evaluation process.

“There is often no clear definition of the challenge, but often specifications of solutions….”

I can’t tell you how often we find ourselves scratching our heads over RFPs that proclaim that suppliers will be judged on their creativity, but then specify a precise solution, sometimes down to the number of training hours, how to fill those hours, and so on. It makes us wonder if clients have already “designed” the training session. If so, does it suggest they have a supplier in mind? And, do they really want creative partners (our goal) or just an extra pair of hands?

“It is through collaboration, especially in the discovery phase, that considerable value is added. If there is any hope of collaboration, it should start at the beginning when the work is being designed.”

I remember one of our clients from a large beverage distribution company telling us that we had won the business—and that we would need to redesign our design. “You almost nailed it,” she said, “but now let’s get to work together.”  We loved it! We appreciate that it’s through discovery and collaboration that we can provide true value.

“The lack of budget disclosure … leads to suppliers designing the wrong thing.”

I understand why some organizations don’t want to specify a budget. It’s the “If we give them a budget they will spend it all!” mindset. But in the long run, it doesn’t help to hold back. Clients know what a solution is worth, and they evaluate the RFP response through that lens. Why not have all RFPs specify a budget range for the solution so that the client can make side-by-side comparisons of merit, creativity, innovation and alignment?

Three Commonsense Remedies

Here’s my paraphrase of Abbott’s suggestions for making the RFP process work better for both companies and suppliers in our knowledge-based economy:

  1. Start with the investment so that bidders don’t have to take wild, unproductive guesses, and companies will get germane solutions they can evaluate.
  2. Disclose information upfront (ethical suppliers will sign a non-disclosure agreement) so that suppliers will work from “real” working assumptions.
  3. Focus on capabilities and fit, not just pricing.

Reading this last point, I was struck by her analogy:  “A focus on price can only be based on an underlying assumption that every haircut is the same.”

I don’t have that much hair left, but I know a good haircut when I get one—and I know a good one costs more than a bad one!

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