Removing Risks From Your New Business Strategy

This article identifies the risks business developers often face and the strategies used to minimise them. Winning complex new business is achieved by the systematic removal of risks and the effective deployment of strengths. Risks can be sorted into manageable categories each with a recommended set of strategies:

  1. You have a very strong competitor
  2. You are a late comer into the contest
  3. You face barriers within your own organisation
  4. You have a powerful anti-sponsor in the account
  5. You have some credibility/reputation problems
  6. There is a lack of alignment amongst decisions makers
  7. Your are unsure who the decision makers are and how they feel about your proposal

As there is a wealth of information to cover, this edition will deal with the first three categories and next month will focus on the remaining four.

1. You have a very strong competitor

Having a strong competitor is not necessarily the risk. It’s what that competitor has to offer which presents the risk. It may be that they have a superior solution; they may have better credibility, or they may have stronger relationships with the decision makers.

Firstly, question whether you really do have an inferior solution. Be analytical – assess what attitude each decision maker holds towards your solution and look at the detail of their perceptions. If there are some gaps in your knowledge, find out what they think. Examine the whole list and decide if your solution is inferior. If you still feel it is, you have to take action in either two ways:

Improve your solution – This is your best option, however it is not always possible or it can come with unacceptable margin implications.

Change the game – Changing the game is a classic game theory response whenever you face a stronger contender. To change the game, you need to break your solution down into components. Re-examine your decision makers and understand how they rate you on each of the components. Group the components on which you are strong and make this the centre of the buyer’s consideration. Your sales strategy is now to change the game into one you can win. Stop selling what you were selling and start selling this stronger solution.

It should be noted that changing the game is usually only effective at the start of the selling process. If the process is advanced, the decision maker’s view of what they want will be too strong for you to change.

2. You are a late comer into the contest

The good news when an unexpected tender invitation arrives is that you haven’t expended any selling time or money on this opportunity until now. The not-so-good news is that it’s very possible that a competitor is already the front runner for this opportunity. The problem is compounded by the fact that tender responses often consume significant resources and take you away from other pro-active development work.

Your challenge is to decide if you are going to pursue this opportunity and if so, how. Firstly, you need to make a realistic assessment of the comparative importance of this opportunity. Secondly, assess the comparative cost of pursuing the opportunity, including the impact of putting other work aside while you prepare this tender response. Then assign a high, medium or low rating to both assessments.

The opportunity can then be plotted on the following matrix:

Importance | High | Go | Go | Rabbit |
|__________________________________________________________ | Medium | Go | Manage | Stop | | | | Resources | | |__________________________________________________________ | Low | Stop | Stop | Stop | |__________________________________________________________ | Low | Medium | High | |__________________________________________________________ Cost

In this matrix, there are four recommendations to consider:

  1. Stop – Simply, if the importance is low, don’t proceed. Similarly, if the importance is medium and the cost is high, it is recommended not to proceed.
  2. Go – If the importance is high and the cost is low or medium, go for it. Additionally, if the importance is medium and the cost it is low, it’s worth pursuing.
  3. Rabbit – If the importance is high, the cost is high and you are late into the process, you need to pull a rabbit out of the hat! This may mean sharpening your pencil, leveraging a special relationship more vigorously, or finding a silver bullet. If you can’t capitalise on one of these options, your risk of not achieving a return on your tendering investment is high.
  4. Manage resources – You need to keep an eye on the resources you put into this opportunity, whilst maintaining your prospecting activity. You cannot let this become an all-consuming opportunity and must manage the consumption of your selling resource to the potential of the opportunity.

3. You face barriers within your own organisation

Many developers who have attended our workshops tell us that this is often their biggest challenge. We have a few simple but effective strategies:

  • Include the executives you need to persuade in your big picture analysis. Treat them like decision makers inside your client organisation and understand their personal and business motivations.
  • Involve the executives in your selling strategy as early as you can, even if they are not yet fully committed to supporting your proposal. As a sense of the hunt develops in their mind, they start to convince themselves that it is worth winning. Executives not usually involved in business development love to be asked for help.
  • Use your internal coaches to do the persuading for you. Sometimes they will be more effective than you.

4. You have a powerful anti-sponsor in the account

If you believe this to be the case, it is wise to investigate and uncover the following factors:

  • Their lack of support for you
  • Why they don’t support you
  • Their degree of influence in the decision
  • Who they are supporting

Ideally, you want to convince this decision maker that they should support your solution. However, if you are a long way into the sales process, this may not be possible.

If you believe this decision maker can’t be turned around, it may be better to stay away from them as they are likely to be supporting your competition. With true anti-sponsors, trying too hard can give them more data to use against you and/or increase their motivation to support their favoured option.

5. You have some credibility/reputation problems

If you find yourself with credibility or reputation problems, there are three things you can do:

Face the problem directly – don’t try and hide from it – Organisations learn from their mistakes. Be prepared to talk about what you have learnt and how you have put this knowledge into place for the benefit of your clients. Sound confident and welcome the opportunity to respond.

Re-frame the problem into consequences rather than attributes – Ask the decision makers why a particular credibility or reputation issue concerns them. Record their responses and deal with those rather than the negative attribute itself. Talk about those things that you now do to make sure that it is not a problem going forward. A negative successfully turned around can become a strong positive.

Find decision makers who support the corrective action you have taken – There are almost always decision makers who support actions your organisation has taken to overcome shortcomings. Leverage off the positive comments these buyers are prepared to make on your behalf.

6. There is a lack of alignment amongst decisions makers

There is a lack of alignment when the decision makers do not agree on the nature of the problem that you propose to fix. If however, there is consensus on the nature of the problem but there is disagreement on the type of solution required, action is needed to rectify this.

The biggest risk associated with a lack of alignment amongst decision makers is that the deal may never happen. The ‘do nothing’ outcome wins by default. Many opportunities with Government suffer this fate.

As an aside, your big picture strategy must contain a completion date. If there is no client imposed completion date, impose one on yourself. If you do not have a completion date, you never know if you are losing to the ‘do nothing’ outcome.

Ultimate decision maker

Where does the ultimate decision maker sit on this issue? This is the most important consideration. The solution provider who has the ultimate decision maker on side is best placed. This is where your selling effort should be focused.

Engage at the concept level

If time permits, you may need to go back to basics with the decision makers and engage them in discussion about what the problem is and what types of solutions are possible. This will require some courage and deep understanding of your client’s business. Executed well however, and it positions you as the real consultant and ahead of your competition.

Group decision makersIf there are many decision makers, it is likely that they will group into two or three solution camps. A good big picture analysis will show you how they group, which group favours your solution and which group has the power.

7. Your are unsure who the decision makers are and how they feel about your proposal

This risk is a clear indicator that your selling effort and/or big picture is incomplete. There is no substitute for getting face to face with all the decision makers. This is a two step process.

Identify – You need to ensure that your big picture identifies all the decision makers on this deal. Use the decision makers who are your strong supporters to validate that you have all the names. Get them to confirm your understanding of their level of influence and where you stand in terms of their support for your proposal.

Prioritise – Once you know who has the influence and who supports your proposal, make it a priority to work on those with high influence who don’t yet support your proposal. Be wary of approaching the anti-sponsors. You also probably need to stop spending time with low influence decision makers.

Finally, don’t be afraid to ask for assistance from your strong supporters. People are usually pleased to help promote a solution they want to see implemented. They can also give you advice and open doors that might otherwise be closed.