Recently, after more than 20 years as a leadership consultant, I have elected to never tender or submit a competitive RFQ (request for quote) again.
OK, I’m a slow learner!
I realise that it will diminish the number of clients I work with, which is not necessarily a bad thing.
Over the last ten years, I’ve seen tenders and RFQs for human services (leadership and management development, change management, general business development etc.) become a ‘cut and paste’ process by delegates, who are too often unable to articulate the specific outcomes desired by their leaders.
The tenders/RFQ are great at stipulating deliverables, and do not describe either quantitative or qualitative results required.
Tenders and RFQ’s can’t and don’t stipulate a desired return on investment in achieving clarified desired results.
The resulting hefty complex tender documentation buries any talent and real capability to deliver outstanding results.
The time taken to ‘hone’ a competitive tender/RFQ and the resulting ‘trimming’ to ensure competitive pricing, to comply with the deliverables, delivers the inevitable mediocrity, whilst stressing the tenderer and the panel who decides the winner.
I understand that the tendering system was designed to prevent biased awarding of work and other base human instincts.
Tendering was also designed to provide a ‘level playing field’ for competitors. Whilst admirable in one sense, the idea ignores the reality that not all competitors are equal.
Unfortunately, some organisations have corrupted the tendering and RFQ process to the extent that they will choose a favourite provider, then ask the market or a few known providers to provide a quote, not to choose from, but just to comply with process. Low values there and no self-respecting provider would want to work for those types, except ‘birds of a feather’.
The alternative is not simply to allow a CEO to choose who will do the work, giving rise to a big reason why tendering became a practice in the first place, but to create a better process that determines value for money and capacity to deliver desired results, not just stipulated deliverables.
In a world where money has become the primary focus, too many of us feel we are racing to the bottom because of that focus.
We need to change the game, to lift our heads from the sand and get real about how we award work and ensure accountability for desired results.
Procurement people, who are a key part of the selection panel, are largely cost and compliance measurers and can unintentionally kill the brilliance of providers, because of their focus.
Here’s my suggestion for a better alternative:
- Get clarity on the desired results e.g. a 20% improvement in morale, culture, performance and productivity, in six months.
- Get clarity on what that means as a return on investment, to give the client a ‘bandwidth’ to use in ultimate selection of provider. This means the client must have an effective means of measuring outcomes.
- Ask the market for a proposal that delivers the results, describing how, and describing desired remuneration.
- Select a short list and have them demonstrate an element of the process they’ll use – their documentation isn’t enough.
- Create a panel of independent experts who understand the desired results, the existing situation and the experience to make unbiased selection.
- Require the prospective provider to have ‘skin in the game’ – rewards must be commensurate with results. This also means clients must mature away from commoditising that which cannot be effectively commoditised – improving human performance.
My suggested process requires clients to have a clear knowledge of specific outcomes they are seeking and how to measure them. That, alone, is valuable for them.
Personally, I’m always inspired by the opportunity to prove in real life, the benefits I can bring to a client in my area of expertise.
I have never found the tender or RFQ to adequately achieve that. It becomes nothing more than a lottery and biased towards cheapness.
What do you think?
PS: I declare that I was inspired to write this after reading and responding to a LinkedIn post by a colleague earlier this year, that I can no longer find on the platform.
