What you choose to bid will not just make your company bigger, it will change it. We’re not just talking about what your company’s capabilities are or what it offers to your customers. We’re talking about things like culture, management structure, and even personality.
The way it happens is that you bid projects on that require a different kind of management approach or a different kind of staff. The project creates both a precedenct and a foundation for projects that are like it only more so.
It can happen quickly when you bid a large project that’s a little bit different than what you normally do, but it’s large and the potential value convinces you to take a shot at it. And then you win the darn thing. Because it’s large, it ends up being the tail that wags the dog. To fulfill it, you have to do things differently — a lot. When things settle in and become routine, you find that your company has changed.
Here’s an example. I know a company that is highly focused, with a management structure based on what they do, which is specifically defined. They thought of bidding on a project that would require its own project manager. It would also require a variety of staff in different disciplines. The project included what they are good at, but it also included a lot more. It was a very high dollar opportunity.
If they won this opportunity, several things would have happened almost immediately. First, their organization would split in two — the existing hierarchy and a new one to run the new project. Would they promote the manager who historically acted as the head of operations to lead both? A lot of companies would, but the current manager didn’t have any experience with the other parts of the project, and running the existing line of business took a full-time effort. The current manager, while senior, didn’t have the right background (or availability) to oversee the new project.
It helps to look beyond the project itself. Once they got into project work, where each contract has a dedicated project manager and you hire whatever kind of staff you need to complete the project, they’d end up doing more of it. Once you’ve established the procedures and the capability, it’s hard to turn down business you’re capable of doing. They’d end up with multiple project managers outside their core business. They’d need to report to someone who understands managing project managers. The company would have multiple divisions, and the core of their previous business would become just a slice instead of the whole pie.
The staff in the company all had similar backgrounds, related to its core line of business. But the new project work would require all kinds of staff. Functions that were highly focused, like recruiting (particular kinds of staff), would become generalized (recruiting any kind needed). People and procedures throughout the company would have to adjust their scope. Their concept of what their jobs were all about would change. Resources would have to be allocated differently. Turf wars would inevitably erupt in what was once a settled and comfortable place.
Once you’ve got the ability to do project work, there isn’t much beyond the vision and discipline of your leaders to limit the kind of projects that you take on. If you are a health care administrative services company and take on administrative projects, then you soon realize that you can do other kinds of administration. You also start to take on hybrid projects (administration plus other stuff the customer needs), because the real world is full of them. You gain capabilities you hire or develop specialized expertise to meet your customers' needs. The next thing you know, a few years have gone by and now you’re an information technology (IT) company (or other type of services provider). You end up that way because you had (or could hire) a project manager to lead it, were able to recruit the staff, and that’s where chasing the dollars took you.
There’s only so much work available in your core business. But there’s all kinds of project work out there. If it grows fast enough, then it takes over. If it brings in the most revenue, it will want most of the budget. The procedures you end up with and the things you do end up more often related to the new line of business than to your core. You now have multiple layers of middle management where you used to have one “go to” person. The management of the core business is greatly outnumbered by advocates for moving in other directions.
And it all happened because you bid one opportunity that involved project work.
The same thing happens going the other direction, but it’s usually a train wreck. When you have a horizontal project business and you try to take on a narrow vertical, it’s difficult to be successful. The same is true for government contractors who try to take on commercial work, or services companies that try to launch products. Your business development, budgeting, procedures, and culture make the developing the new line of business like swimming upstream. The new business needs to market differently. It needs to allocate resources differently. It needs to deviate from the way things are usually done. Where you thought you’d find economies of scale, instead you find more resistance than if it was a start-up on its own.
Change is good, when it’s anticipated. This article is about unexpected change that results from bid decisions. Your bid decisions should focus not only on whether you can win, do the work, and be successful at it. They should also focus on how the new work will position you in the future. Normally people see positioning that opens up many broad opportunities in the future as a good thing. And maybe it is. It all depends on what kind of change you are prepared to embrace, and what kind of change you want to avoid.
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Finally, here are links to some other articles we've written on the topic of choosing which opportunities to bid: