Probability of Win (Pwin) remains one of the most misunderstood concepts in business development today. The concept itself could not be easier to understand. Probability of win simply states the likelihood that we will receive an award for the opportunity we plan to capture. Pwin can be expressed by relative probability (high, medium, low) or by a percent (e.g. 50%). How you express Pwin is not important. The assumptions behind your Pwin determine accuracy. The one constant in Pwin: we consistently overestimate our probability of success, usually significantly.
No matter how we want to present Pwin, we need to look at some of the factors that affect Pwin. These factors usually appear in some common Pwin calculators, popular throughout the industry. Shipley has a Pwin calculator as well. There exist some fairly common Pwin attributes that can easily generate a baseline Pwin looking at some essential characteristics of all bids. For example, win factors include:
- Incumbency
- Experience
- Past performance
- Contract size
- Competitor rating
- Customer relationship
- Technical solution
- Management solution
- Cost
Then, of course, we can customize even more by adding levels of detail and expected evaluation criteria. Using these criteria and an objective assessment of where we stand from the customer’s perspective can yield a rational analysis of where we really stand at any point during the competition. The problems come into play because we always want the Pwin to be as high as possible for the internal sale of the effort and we rarely examine standings from the customer perspective. So, we immediately skew the truth with an overly optimistic view of our own capability and credibility. The mystery focuses on our inability to baseline an accurate picture of ourselves from the customer’s perspective. The magic occurs when we achieve a level of objectivity, enabling us to develop strategies that will improve our win position over time.
So how do we fail to use the customer’s perspective? First, we fail to have insightful conversations with customers regarding what they think about us, our competitors, and the solutions we might offer. Without this level of interaction, we can’t possibly construct a reasonably accurate picture of Pwin from the customer’s perspective. So we guess. And we guess wrong, most of the time. Rule # 1: don’t guess. Know. Unless we know, we can’t possibly proceed from a position of strength. Pwin must be accurate, not delusional.
But magic can occur. If we are objective and recognize that we have to purge our biases from the Pwin calculation, we can position ourselves to create and execute the right strategies that will improve our standing with the customer over time. Pwin is not an absolute value. Pwin waxes and wanes as we proceed through the competition and convince the customer we are capable and credible to fulfill their needs. The magic reveals our weaknesses based on accurate representations of where we stand. For example, our initial assessment of Pwin in the area of Technical Solution might be 60%. However, after conversation with the customer, we may find that they really don’t like our approach and we revise that down to 25%. Radical difference. But truthful. Then we know what solution they would prefer based on their rejection of our ideas. We redesign and reposition. We talk again. This time they like our thoughts and we adjust Technical Solution Pwin to 40%. That’s about as high as it ever gets. Anything else borders on the absurd. So we have corrected with knowledge and taken a conservative view that allows us to think through how to improve our position vs fooling ourselves. We get on the road to success.
Pwin doesn’t need to be hard. A few simple thoughts can keep us out of trouble. Recompete Pwin never exceeds 70%. Reason, we do a good job of fooling ourselves on a recompete position. So start there, assuming you can only go down if you fail to have the right strategy. New business Pwin rarely exceeds 40%. Why? Customers have choices. If we approach Pwin conservatively, we force ourselves to think about what we can do to make that 40% solid while others fade away to 25% or less through their own folly. To get the best Pwin on an effort, avoid the mystery and create the magic through objectivity, knowledge, and strategy.