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Are Black Hat Reviews Worth Doing?

It’s got such a cool name, how could you not have a Black Hat Review? Actually, most proposals don’t have a Black Hat Review. It’s something that companies pull out when they’re pursuing really important bids and they want everyone to know they're doing everything possible to win.

Black Hat Reviews are poorly defined. There is no industry standard. Everyone does them differently. In general they are a review that seeks to emulate your competitors. The goal is to think like they do and predict what and how they will bid so you can counter their strategies. Sometimes this is done through role play, simulation, or a facilitator. They tend to be very expensive, with lots of very senior staff involved for many hours. They also have a very high failure rate.

We’ve written about them before, but someone asked us recently if they're worth doing, so we thought we’d look into that question in more detail.

First you should ask yourself whether it’s applicable to the type of bid you are pursuing. If the RFP specifies what to bid, as opposed to asking for a solution to a problem, then you probably don’t need a special review to anticipate what your competitors are going to offer.

Then you’ve got the “garbage in, garbage out” problem. If you don’t know enough about the competition to simulate their approaches, you’re not going to learn anything new just because the review has a really cool name and is really expensive.

Asking whether you should have a Black Hat Review is putting the cart before the horse. The real question is, what are you trying to achieve? A review should have a measurable purpose. Most Black Hat Reviews have an ambiguous purpose like “to develop strategies.” It's entirely possible that there are better ways to fulfill your needs than by having a Black Hat Review. But before you can answer that, you have to better define what you want to get out of the review.

Even that is putting the cart before the horse. Because really you should start by asking what will it take to win. All tasks and assignments should contribute to meeting that goal. First you should define what it will take to win, including what you need to know in order to win. Then ask how you are going to answer those questions and fulfill those goals. If having a Black Hat Review can cross some of them off the list, then it might be worth having. But you really can’t assess whether it meets your needs until you have first defined what they are.

So if you have:

  • A solutions oriented RFP
  • Enough intel to name your competitors and simulate their approaches
  • Specific goals that the Black Hat Review will fulfill
It might be worth it. Remember, Black Hat Reviews are expensive.

I like to play with numbers. So here's a straw man SWAG loaded with assumptions:

Holding a Black Hat Review often requires around a dozen people for about 8 hours. Round that to 100 hours' worth of effort (not including any pre-meeting planning).

Since the participants will be mostly senior staff and possibly consultants, let’s say those 100 hours cost $20,000.

If pre-RFP pursuit should take half the budget, and within that 50% goes to preparing for RFP release, 20% goes to the business development manager to keep him travelling and in front of customers and teaming partners, 20% goes to the capture manager, and 5% goes to pre-RFP proposal preparation, you still have 5% (of a 50% slice). Let's allocate that 2.5% of the overall budget for the Black Hat Review.

If you do the math ($20,000 = 2.5% of the budget) then you get a total pursuit budget of $800,000. Or you could say that it takes an overall proposal budget of $800,000 to afford to have a Black Hat Review. If you are spending 2% of the projected award value on winning the pursuit, then if you do the math again ($800,000 = 2% of award value) you find it implies an opportunity worth $40 million. Note: your mileage will vary, if only because of the different ways that companies track and account for time and pursuit budgets.

From this, you could conclude that in addition to the above, a Black Hat Review needs an opportunity worth at least $40 million to justify it. Now ask yourself which would you prefer: having the results from a Black Hat Review, or having 150 hours (call it a month) of additional proposal writing effort?

 



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By Carl Dickson, Founder of CapturePlanning.com



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