MM557- SOURCES OF CONSULTING WORK, PROPOSALS & THE CLIENT SELECTION PROCESS

USCMarshall - Management Consulting proposal development

1. SOURCES OF CONSULTING WORK, PROPOSALS & THE CLIENT SELECTION PROCESS MOR 557 & 462 PROFESSOR MICHAEL MISCHE 1

2. SOURCES OF CONSULTING WORK SOURCES There are a multitude of sources for management consulting work. No firm can rely exclusively or solely on a single or few sources. The most direct & least cost source is usually with existing or recent clients, or clients which the firm has had a long term relationship. A challenge confronting the consultant is knowing what the ” client’s buying cycle” is…that is, knowing when the client will need services & be in a position to pay for services. Another challenge is determining what the unique & usually “unstated” “client buyer values” that are important to the client. Typical Sources Existing Clients Client Awareness of Firm & Vendor List Personal Relationships Professional Relationships Firm Reputation & Specialization Firm Direct Outreach to Prospective Client on a Known Problem General Marketing Programs are “Important” for Visibility & Awareness But Drive Little Direct Business 2

3. TWO TYPES OF SOURCES OF CONSULTING WORK SOLICITED Most common method Can be highly competitive Can be “Sole Sourced” with no competition Can be originated through personal contacts, vendor lists, direct inquiry Involves either an RFP or direct invitation UNSOLICITED Highly aggressive approach Very risky Usually predicated on some type of “event” or publicly- known situation High Failure Rate 3

4. SOLICITED SOURCES & PROPOSALS Solicited If the consultant has been invited by the prospective client to present a proposal, it is called a “solicited” proposal . Solicited proposals are usually associated with requests for proposals (RFP), as a direct result of a preexisting relationship, or as a result of a referral. Solicited proposals are in response to an invitation by the prospective client to prepare and present a proposal. In searching for a consultant, it is not unusual for clients, especially large and sophisticated ones such as Fortune 500 companies and governments, to draft and issue a Request for Proposal (RFP). The RFP is sent a number of consulting firms and describes the client’s situation, needs and objectives, proposal response requirements, desired outcomes, types of consulting services sought, type of consultant needed and the consultant’s qualifying credentials. Sometimes the RFP may include evaluation criteria, fee information, legal requirements, and other essential information. However, generally, the issuing client is under no legal obligation to include such information. Some RFPs, such as those issued by government agencies, may also specify the type of paper that must be used in printing the proposal, the type of font and size, warranties regarding embargoed nations, affirmations to minimum living wages and even commuting and ridesharing. In developing a proposal, the management consultant must be fully aware of all of the requirements, including those that are administratively mandated or required as a matter of law or regulation, and must satisfy those requirements. If the consultant fails to comply with client-mandated or even suggested requirements, the consultant runs the risk of being disqualified for further consideration. 4

5. UNSOLICITED SOURCES & PROPOSALS Unsolicited If the consultant is preparing a proposal as a result of perceived client need, but without client invitation, the proposal is called “unsolicited.” Unsolicited proposals usually come about as a result of consultant research into a potential client, information in a press release, informal meetings, or media coverage of some event or situation confronting the prospective client. Unsolicited proposal can be stimulated by a variety of sources. A chance meeting between the consultant and an executive of the client’s organization, a press release, earnings report, news report, independent research, or personal relationship can all serve as stimuli for an unsolicited proposal. In presenting the unsolicited proposal the consultant is trying to communicate skills and capabilities, or has a presumption of an issue that the potential client is grappling with that the consultant can solve. 5

6. UNDERSTANDING PROPOSALS WHAT IS A PROPOSAL? “ The management consulting proposal is a formal response to client needs that offers professional services and conveys the work to be performed by the consultant, the scope and type of services that the consultant intends to perform, and the timing and professional fees involved.” (Mische) Proposals are integral to the consulting process as they: Communicate capabilities & understanding to the client Demonstrate competency & professionalism Reflect creativity, solution potential, empathy & insight PURPOSE OF PROPOSAL The primary purpose of the proposal is to sell consulting work and the consultant to the prospective client. Proposals are part of a larger selling cycle that involves meeting with the prospective client, creating a rapport with the prospective client, researching, drafting and presenting your proposal, and, if successful, entering into contract negotiations to perform the consulting work. Proposals may represent months and even years of relationship cultivation and client development efforts. Proposals generally create legal responsibilities and liabilities for the management consultant since clients place reliance on consultant representations. 6

7. PROPOSAL FORMATS VARY Formats for proposals can take many forms, including simple letter styles, PowerPoint formats, narrative form, and some may take the form of multi-media. Proposals are created in various styles and formats. Proposals are part of a consultant’s branding and image and therefore, integral parts of a firm’s marketing program, client relations, and public identity. In the absence of specific client requirements, the consultant will issue a proposal that it believes will be most responsive to the client and in a format that is reflective of its image, brand and identity. The type of proposal drafted and presented by the consultant will almost always depend on three prevailing factors the: Preferences and practices of the consulting firm writing the proposal and its interpretation of the client requirements, needs and “buyer values.” The situation and unique client needs, type of work to be performed, and timing of the potential client. Client specified formats and needs. The key point to always remember in proposal formatting is to use the style and format that is required by the client and or use the one that is most communicative AND responsive to the client. 7

8. CLIENT BUYER VALUES & MISCHE’S 7-C’S OF PROPOSALS Client Buyer Values A well-crafted proposal will “resonate” with the client, excite the client, and showcase the consultant’s comprehension of the client’s needs, the depth and breadth of experience, extent of its industry knowledge, command of the subject matter, demonstrate empathy and appreciation for the issues and challenges confronting the client. Buyer values are those criteria and conditions that are most unique and important to the potential client. For example, is the prospective client seeking the prestige of an elite firm, the personal attention of a smaller firm, deep subject matter expertise of a thought leader, or a large firm to off-load legal liabilities and risk. Knowing the buyer values necessitates knowing who the readers will be of the proposal, that is the audience . Mische’s Seven C’s of Proposals Comprehension Credentials Capacities Credibility Clarity Creativity Causality 8

9. PROPOSAL DEVELOPMENT PROCESS Part 1.2 “Proposing” MOR 557 & 462 PROFESSOR MICHAEL MISCHE 9

10. 3 PHASES OF PROPOSAL DEVELOPMENT… A Description of Part 1.2 of The Mische Consulting Model: Proposing Proposal Development- Part 1.2 “Proposing” Proposal efforts can range from a simple letter to a highly detailed and intricate proposal. Proposals can represent a substantial financial commitment on the part of the firm to construct. Costs: Direct hourly cost of service Opportunity costs Cultivation costs (meeting w potential client, trips to vendor conferences) Production costs Presentation costs (direct time, travel, lodging, etc.) Some firms employ proposal writing specialists, but in almost all cases, proposals require the input and attention of partners, managers and senior consultants. Costs for proposal efforts are rarely reimbursed or consultants compensated for their time. Three Parts of Development Part 1.2 of the Mische Consulting Mode, “Proposing” organizes the proposal development process into three distinct parts performed by the prospective client and consultant. Part Description Client RFP Preparation & Issuance Consultant Response & Proposal Prep. Client Evaluation & Selection Each part has a series of phases and processes. Clients may cancel the process at any time & are under no legal obligation to select a consultant, irrespective of the costs and effort of the consultant. 10

11. PROPOSAL DEVELOPMENT PROCESS COMPONENTS Part 1: CLIENT RFP PREPARATION & ISSUANCE (CRP) Part 2: CONSULTANT RESPONSE & PROPOSAL PREPARATION Opportunity Assessment (OA) Response Strategy (RS) Service Delivery Model (SDM) Proposal Narrative Development (PND) Part 3: CLIENT EVALUATION & SELECTION (CES) Round 1- Elimination Round 2- Finalize 11

12. PART 1: CLIENT RFP PREPARATION CLIENT PROBLEME / NED DEFINED DECISION TO USE CONSULTANT FUNDING / BUDGET AVAILABLE CLIENT EVALUATES & SELECTS CONSULTANTS FOR RFP/INVITES CLIENT DRAFTS RFP OR INVITE CLIENT ISSUES RFP OR INVITATION CP-1 CP-3 CP-2 CP-4 CP-5 CP-6 12

13. PART 2: CONSULTANT RESPONSE & PROPOSAL PREPARATION RECEIVE RFP RECEIVE DIRECT INVITATION ASSEMBLE PROPOSAL TEAM DESIGN & STRUCTURE PROPOSAL ASSESS OPPORTUNITY QUALITY OF CLIENT QUALITY OF PROJECT PROFITABILITY OF PROJECT PROBABILITY OF WIN & LEVEL OF COMPETITION LEVEL OF INVESTMENT & TIMING ASSUMPTION OF RISK SME/SMK IME/IMK AUTHORS LEGAL CRITICAL QUESTIONS & DATA NEEDS FORMAT DESIGN LEVEL OF DETAIL MEDIA RESPOND TO PROSPECTIVE CLIENT NO YES ISSUE NOTICE TO PROSPECTIVE CLIENT CLIENT ISSUES RFP OR INVITATION ASK! WHAT RESOURCES ARE REQUIRED? WHAT TYPE OF PROPOSAL IS NEEDED? WHAT TYPE OF PROPOSAL BEST POSITIONS US TO WIN? ASK! HOW COMPLEX? WHAT’S THE RISK? WHO’S THE CLIENT? CAN WE WIN IT? HOW MUCH TO RESPOND? ASK! IS THE WORK WITHIN THE CAPABILITIES & COMPETENCIES OF THE FIRM? DOES THE FIRM HAVE THE RESOURCES TO PERFORM THE WORK? OA-1 OA-1 OA-2 OA-3 RS-1 RS-2 Consultant Assessment: Attends Prospective Client’s Vendor Conference & Info Sessions. Performs Research Assesses Prospects, Risks & Costs 13

14. DEFINE / REDEFINE CLIENT PROBLEM DETERMINE REQUIREMENTS, OBJECTIVES & TIME DEMANDS DEVELOP GENERAL APPROACH & WORK PLAN FINALIZE DESIGN STRATEGY & STRUCTURE CONCEPTUALIZE POSSIBLE RESULTS & DELIVERABLE CONCEPTS DETERMINE PROJECT STAFFING ESTIMATE FEES & EXPENSES IDENTIFY CLIENT BUYER VALUES & DEVELOP ASSUMPTIONS DETERMINE SCOPE OF SERVICES & SERVICE DELIVERY MODEL DEVELOP TIMELINES, MILESTONES & DELIVERABLES ASK! WHAT SERVICES ARE REQUIRED TO ADDRESS THE CLIENT’S NEEDS? WHAT IS INCLUDED IN THE SCOPE AND WHAT SHOULD BE EXPLICITLY EXCLUDED? WHAT ARE THE ASSUMPTIONS AS TO DATA AVAILABILITY & ACCURACY, ACCESS TO CLIENT PERSONNEL, USE OF CLIENT PERSONNEL,, USE OF MODELS & FRAMEWORKS, ETC.? PROVE! CAUSALITY BETWEEN THE WORK PLAN & CLIENT REQUIREMENTS ASK! DO FEES ALIGN WITH COMPLEXITY? DO FEES ALIGN WITH CLIENT EXPECTATIONS? DO FEES REFLECT “VALUE”? CAN WE MAKE A PROFIT? ASK! ARE TIMELINES REALISTIC? ARE MILESTONES RELEVANT? DO TIMELINES & MILESTONES SUPPORT THE WORK PLAN? RS-3 SDM-1 SDM-2 SDM-3 SDM-4 SDM-6 SDM-7 SDM-8 SDM-9 SDM-5 STABILIZE SERVICE DELIVERY MODEL & TECHNICAL SDM-10 PART 2: CONSULTANT RESPONSE & PROPOSAL PREPARATION 14

15. REVIEW, REVISE & FINALIZE PROPOSAL APPROVE PROPOSAL ISSUE PROPOSAL AWAIT RESPONSE DRAFT PROPOSAL CONFIRM ASSUMPTIONS & CLIENT BUYER VALUES READY FOR NARRATIVE DEVELOPMENT SDM-11 PND-1 PND-2 PND-3 9ND-4 PND-5 PND-6 KEY POINTS! DRAFTING THE NARRATIVE PORTION OF THE PROPOSAL: DESCRIBE SCOPE OF SERVICES & WORK TO BE PERFORMED DESCRIBE WORK APPROACH & SERVICE DELIVERY MODEL & METHODS DEMONSTRATE CAUSALITY OF PURPOSE & APPROACH TO CLIENT NEED ESTABLISH ALIGNMENT OF WORK PERFORMED TO CLIENT GOALS & REQUIREMENTS KEY POINTS! IS THE PROPOSAL RESPONSIVE? IS THE PROPOSAL COMPLIANT W FIRM STDS? IS THE PROPOSAL OF THE HIGHEST QUALITY? IS THE PROPOSAL COMPELLING & COMPETITIVE? OUTCOMES! ACCEPTED REJECTED ACCEPTED W MODIFICATIONS ADVANCED FOR FURTHER CONSIDERATION CLIENT BUYER VALUES! CBV are integrated & subtlety emphasized in the narrative of the proposal…make the proposal speak to & resonate with the client! PART 2: CONSULTANT RESPONSE & PROPOSAL PREPARATION 15

16. ROUND 1- CLIENT EVALUATION & INITIAL SELECTION (Usually top 3-5 firms in a competitive situation) CONSULTANT SUBMITS PROPOSAL CLIENT PROPOSAL EVALUATIONS Round 1 CLIENT CONSULTANT SELECTION Round 1 CONSULTANT PRESENTATIONS Part 1 CLIENT Q&A W/ CONSULTANT PND-5 & PND-6 INITIAL SELECTION OF CONSULTANTS PART 3: CONSULTANT EVALUATION & SELECTION CES-1 CES-2 CES-3 CES-4 16

17. COLLABORATIVE PROJECT PLANNING & CONTRACTING ROUND 2- FINAL EVALUATIONS & CLIENT Q&A WITH CONSULTANT CLIENT EVALUATIONS Round 2 CLIENT FINAL CONSULTANT SELECTION FINAL PROJECT SCOPING INITIATE PROJECT & MOVE TO PART 2 OF MISCHE CONSULTING MODEL SELECTED CONSULTANTS MODIFY & REFINE PROPOSALS & PRESENTATIONS CONTRACTING CONSULTANT PRESENTATIONS Round 2 PART 3: CONSULTANT EVALUATION & SELECTION CES-7 CES-8 CES-9 CES-10 CES-5 CES-6 17

18. GENERAL WORK PLAN FOR PROPOSALS & CONSULTANT EVALUATION & SELECTION 18

19. GENERAL WORK PLAN FOR PROPOSALS & CONSULTANT EVALUATION & SELECTION 19

20. GENERAL WORK PLAN FOR PROPOSALS & CONSULTANT EVALUATION & SELECTION 20

21. CLIENT SELECTION CRITERIA & MISCHE’S 7-C’S OF PROPOSALS SELECTION CRITERIA SELECTION CRITERIA 21

22. CLIENT SELECTION CRITERIA & MISCHE’S 7-C’S OF PROPOSALS SELECTION CRITERIA SELECTION CRITERIA 22

23. CAUTIONARY & PROHIBITED WORDS PROHIBITED WORDS… Be Careful of Using These Words in a Proposal, Report or Verbally…RELIANCE! Clients Collaborative or Collaborate Relationship Proven Value-added World-class Best, Most, Greatest Expertise Maximize Minimize Solution PREFERRED WORDS & TERMS… Think Abut Using These Words to Mitigate Litigation Risk & Misrepresentations Companies, Organizations, Individuals, Governments, Agencies Working together, Interacting, Interactive Professional working relationship Well-established, Known Value, Contributory Well- known, Highly regarded Leading, Distinctive, Established Deep experience, Subject Matter Knowledge Increase, Accretive, Augment Reduce, Mitigate Approach, Service Approach, Service Delivery Model, Deliverables 23