Linda Wolstencroft

Advising and Coaching for Aerospace & Defence

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Pay it forward – Investing for exceptional results

Posted on June 14, 2017 by Linda

Pay it Forward, Investing for exceptional results

How much to invest in the development of products and services prior to the ability to even sell them is a common debate within businesses.

Further, how much to invest in business development for a program that may be months – or years – into the future is also up for debate.

Yet once again, experience has shown from a recent major win that investment in these areas does indeed pay off. Businesses that do not invest in developing their products and services in anticipation of a major project do not fare well; the same goes for businesses that do not invest in business development well before the project matures.

Both are necessary in this magic formula; companies need to both invest in the product/service, and in business development.

Sometimes there is a power struggle between the two disciplines as each may believe theirs is more important than the other. The product/service people might say that without the development of an excellent product/service, there can be no sale. On the other hand, the business development people might believe that without a strong business development approach and superb proposal, there will no win and thus, no sale.

The lack of cooperation that results is unhealthy and unproductive, and should
be strongly mitigated. In one example, a product lead believed that the product was more important than the proposal and there was unwillingness on his part to cooperate with business development and proposal priorities. Thanks to clever leadership, an intervention mitigated this major risk by providing backup strength that replaced the value that should have been provided by the product lead. The company went on to win a major contract.

These are some major lessons that prove themselves time and time again.

In a recent competition, a major inter- national company offered a nearly-off-the- shelf product for a low price. While having a low-cost product to offer to customers glob- ally is most definitely a viable business strat- egy, it does not work in all cases. Without an effective product development plan that meshes with the customer requirement, the probability of being successful is reduced. This occurred here as the company’s product did not fit the customer requirement and they lost the program.

Investment in the proposal is likewise essential for a major win. It is disappointing when a company puts forth a great product or service, but a sub-standard proposal. A poor proposal can prevent customers from considering a product or service. From
the standpoint of military customers who are working to improve our international security, it is disheartening to think that the best product or service may be potentially taken off the table due to a non-compliant proposal.

Even today, companies with a potentially winning product and service are being disqualified in competitions due to poor proposals. It is clear that in these cases it was because the investment toward the proposal was not where it should have been. Or, if the investment in the proposal was already large, that the proposal team was poorly selected.

Common errors made by proposal teams are a result of not accurately reading the request for proposal. Other errors may be that the team is not up to date with changes in policy in government procurement, such as new evaluation practices and new polices such as for Industrial and Technological Benefits and Value Proposition. As things change in government procurement, the proposal team must remain up to speed with these changes. Investment is wasted on experts who are not current.

If this is the case, not only are proposal budgets poorly expended, but time is also lost on the typically grueling proposal schedule. To fix this, people that do understand the requirement must be brought on to perform the costly and time-consuming rework.

Another essential component that
has proven to help win a project is the deliberate and comprehensive involvement of Presidents and CEOs. Leaders who don’t include the major project as part of their day-to-day work but instead take a hands-off approach (leaving everything to the team) risk producing a substandard or unqualified bid.

What’s the bottom line? Long-term thinking is essential in the defence business. Long-term investment is needed. Running
a defence company with an emphasis on short-term financial results is the enemy of investment in products, services, business development and winning. Time and again the health of otherwise-viable defence businesses have been sacrificed due to short-term financial thinking without appreciation of the timeframes and effort required. And it goes without saying that all must be executed within the framework of a well-thought-out and robust business strategy.

Early and smart investment, within an effective business strategy. Has once again proven to be the winning solution.

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Leaks, Ships and Trust

Posted on June 14, 2017 by Linda

This past April, an RCMP probe led to the removal of Vice-Admiral Mark Norman for leaking cabinet secrets to an executive in a company about a multi-million-dollar shipbuilding program.

The full story of this may never be publically known – and it may not matter. The fact that it happened is a sign in and of itself. The sharing of information between government and industry carried out by individuals leads to a deeper question than merely what led to that particular incident. The real question is about fundamental beliefs and fundamental objectives.

Are we in this business – whether in military or civilian uniform – to truly serve the greater good? Do we believe that we are supporting international security by our work in the defence business? Are other objectives at play, such as excess personal gain?

There are two fundamental objectives for us to participate in the defence industry. The first is to make a living (for some, the objective is to make a really good living). The second is to feel part of something bigger. That which is bigger than us who work in the defence business – international security – is extremely important in our lives. This work is not like making breakfast cereal, selling houses, or developing apps to facilitate personal contact. And while those are all noble professions, they won’t matter much if we are not safe.

Defence is not only a business, it is a power that supports international security. I believe many readers would share this same belief. In this industry, we don’t have to wear a uniform to serve our country.

What does this have to do with Defence Marketing?

The issue is trust.

Every day, we have choices on who to work with, who to talk to, and who to do business with. Trust is the basis of these interactions. If we are not vigilant, we can be fooled.

One fundamental area to assess in business partners is the true motive that leads to personal gain. There are those that will take equitable reward based on the value that they have provided, then there are those that have self-serving interests and take more than they are due. For example,
a CEO who profitably runs a defence business and leads the company to produce products and services that are highly useful to our defence missions should be equitably rewarded. On the other hand, an executive who makes the decision to be unsupportive of urgent defence requirements because to be supportive would mean that his or her bonus would be affected should not be rewarded.

The message is that there are values above and beyond personal gain that we can aspire to.

In order to test trust in business relationships, one can assess actions such as:

Responsiveness – This is measured not only by how quickly a response to a request is received, but how thorough and thoughtful the response is. The speed and quality of the response provides an indication of trustworthiness.

Emails vs. Verbal Discussion – In this era of email dependency, it is easy to lose precious time or miss solutions in the misunderstandings that result from poor
writing or misinterpretation of emails. A verbal discussion, as long as it is clear, inclusive, and honest, will achieve better results and serve to build trust.

Avoiding the question – Long-winded conversations around the edges of a question that take away the focus from the issue at hand can be a trust breaker. The same goes for ignoring a question.

Changing the question – This is a tactic in which the question is changed so the focus is diverted from the original question. For example, if a question is asked about price or cost, and the responder knows that the true answer will not be popular, other questions are raised that divert from the initial question.

Creating a tangential issue – This tactic is similar to changing the question but is typically the raising of an issue that is difficult to solve. This might be seen in the case where a solution can only be delivered by those who happen to be absent, such as a higher level decision-maker or experts that are not at the table.

Going on the offensive when challenged – Instead of being honest when challenged, the respondent brings up an issue knowingly difficult for the challenger to easily resolve. Remaining focused on this difficult issue serves to divert attention from the original question.

Information leaks – The objective of this action is typically to control a situation outside of the normal process. Be wary of leaks, even if they appear to force a positive outcome; this is a sign of dishonesty.

These are trust-busting actions, and sometimes it’s not easy to see them.

Our security is at stake. Let’s play fair.

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First Things First: Defence is a tool for International Security

Posted on August 10, 2016 by Linda

Congratulations go to our government for initiating the Defence Policy Review (DPR). This is not an easy task; the issues are complex.

But, the very fact that the review is being conducted is heartening. The results from this review will build on the good work conducted previously by government, stakeholders, associations and other interested parties. Plus, the review process is structured such that innovative ideas can be brought forward.

What is clear too is that there is already a firm basis to start from; Canada’s defence capability is alive and well participating in improving international security and promoting Canadian values. The story is told by the publications that have been prepared and distributed on the DPR web page. The 2016-17 Report on Plans and Priorities states that, “The overarching goal of Defence is to ensure that the Canadian Armed Forces (CAF) are equipped and prepared to protect Canadian sovereignty, defend North America, and contribute to international peace and security, including through a renewed commitment to United Nations (UN) led conflict prevention and peace support. In support of this goal, Defence will conduct an open and transparent review of the security environment, existing capabilities, and policies, forming the basis for a new strategic defence policy document for Canada.”

This clear strategic statement defines the overall envelope of the matter and provides a sound basis for the review.

The DPR discusses three fundamental areas:
1. The main challenges to Canada’s security
2. The role of the Canadian Armed Forces (CAF) in addressing current threats and challenges
3. The resources and capabilities needed to carry out the CAF mandate

Clearly, the first question needs to be answered before the second, and the third can only be answered once the first and second are defined. Because without identifying what the main challenges to Canada’s security are, one cannot study what the role of the CAF should be in addressing them. And without knowing what the role of the CAF is, one cannot determine the resources and capability to carry out the CAF mandate.

But, as it stands, rather than asking only the first question and then conducting a review based on the result of that question, the three questions are being tabled in order to bring in many different ideas. The result from answering the first question will be that we know what our security threats are, and their priority. Obviously we should also risk-mitigate these in case we are wrong. We should be prudent and direct our limited resources to where they are needed. We are predicting the future but this is absolutely necessary. We need to follow a “top down” approach in order to answer questions 2 and 3.

In the DPR, views of the Canadian public are being sought, in addition to opinions from defence experts, government experts and Canada’s closest allies. While it is nice to give everyone a voice, and while it may be politically useful in the future for the government to claim that every Canadian was given the opportunity to engage, the quality of the information that comes from John/Jane Q. Public should be assessed. What we do know from Views of the Canadian Armed Forces: 2014 Tracking Study is that “the limited familiarity that Canadians have with the CAF is reflected in the fact that only a minority of respondents were able to freely recall something about the military—roughly one third (34%) recalled reading, seeing or hearing anything about the CAF.”

WHY PUBLIC CONSULTATION?
This begs the question of why the consultation is public. It doesn’t make sense to glean information from individual Canadians who may not have knowledge of the issues of the CAF and international security. Surveys and reviews that don’t qualify the respondents are rarely accurate.

But all in all, from a public engagement perspective, to satisfy the voting population, conducting a Defence Review has merit. After all, what about the (publicly perceived) poor deal on the submarines, the scuttled ship procurements, the debate in the media over what ships to buy, the next generation fighter capability? There is enough evidence to say that we could do better. And there is indeed opportunity to do so.

There are a total of ten questions being pro- posed for the DPR consultations, and each one of them is complex. They are the type of question that study, analysis and experts will answer. For example, the first question is, “Are there any threats to Canada’s security that are not being addressed adequately?” This is certainly a question for the experts – not the public.

At this writing in early June, there are many inputs to the defence review and more coming. Canada’s industry associations, academics and interested experts are coming forward with positions; there is a dearth of good advice from people who are experienced and well-versed in these subjects.

A next step after the DPR will be using the opportunity of defence procurement to foster innovation and for economic benefits to Canada. Perhaps these will be follow-on subjects, or perhaps the initiatives already in place will be used, such as the Defence Procurement Strategy and the several government programs in place that help companies and academia advance innovation.

Let’s keep the momentum going, and let’s keep asking the right questions.

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Export Now: It’s Time

Posted on June 1, 2016 by Linda

The Canadian dollar is at a low that we haven’t been in years. As a result, over the past several years, products and services with a high labour content have suffered with high cost internationally, particularly with US buyers.

Not so anymore: NOW is the time to ramp up export growth initiatives.

The largest market for Canadian defence companies is the gazillion-dollar US defence market (it was actually $600 billion for 2015, but you get my point). The budget in this market is SO LARGE that opportunities for most companies are also usually very substantial.

Whether a certain product or service is eligible for export depends on the trade controls in place, regulations, and other factors, including political and perception factors.

The 1956 Defence Production Sharing Agreement between Canada and the US allows Canadian firms to compete for US military contracts substantially under the same terms and conditions afforded to US companies. The Canadian Commercial Corporation (CCC) is a useful source for information on this agreement and other trade agreements that affect trade between the two countries.

Specifically, CCC is the prime contractor for all US defense contracts entered into between Canadian companies and the US Department of Defense (DoD) and there are many examples of success. This special treatment is afforded only to Canadian companies. And with our dollar being low, we now have a built-in advantage.

On the flip side, recent sentiments about closing borders, putting up walls, and buying American, does indeed exist and has colored the perception of the likelihood of export success for many of us. It has also colored the perception of our US buyers, unfortunately; but if one looks at the legalities, one will find that Canadian companies can compete on an equal footing with US companies for many products and services.

In the mid 1990s, when the exchange rate was around 70% or lower, my company developed business with the US DoD for MRO services. Breaking the barrier of being approved to compete was not simple. It took a lot of effort to educate and convince the bureaucracy to hold the competition instead of sole-sourcing it to the US OEM. There were many individuals in the large infrastructure to convince that this was allowable and even attractive. But it was done and the resulting business outcome was in the $100s of millions; this was well worth the effort.

Canada has a lower level of labour productivity than the US and this has been worsening in recent years. So as with all business growth decisions, it’s important to remember to account for this when competing against US-based companies.

<strong>GOVERNMENT CAN ASSIST WITH EXPORTING</strong>
Our Canadian government departments and agencies stand ready to help companies export. Innovation, Science and Economic Development Canada (formerly Industry Canada) has a useful guide called “Canadian access to the United States defence market,” which provides relevant information and resources for business developers. The guide recognizes that rather than trying to enter this market on a minimal budget, companies should invest seriously. One rule that I tell my clients is to look at the infrastructure a company has in place for obtaining new business from its traditional customer base and use this example to understand what is needed to obtain business from a new customer or market. It’s not enough to put a couple of people on the case and expect easy and early success. The new market entry deserves focus and determination.

In addition to assisting with US DoD exporting, CCC can also help with business development work internationally. There are defence trade agreements in place between Canada and several countries in South America, for example, and these can provide an advantage. And because the US dollar is the standard currency in play, our Canadian dollar advantage serves us well.

The Canadian Trade Commissioner Service (TCS) is also a useful resource. It operates in several countries and a recent survey showed that exporters who used the TCS were more successful than those who did not. The TCS recently launched its CanExport program that will distribute $50M to Canadian SMEs over the course of five years. It has already selected 29 Canadian SMEs to receive more than $800k in funding for pursuit of new opportunities in Latin America, Asia, Europe, the Middle East, Africa, and the United States.

Export Development Canada (EDC) provides a wealth of information and support for exporters in all industries. The Business Development Bank of Canada (BDC) is another source that helps entrepreneurs with financing and business advice.

The tools and the expertise exist. Do you have what it takes to grow your business through exporting?

NOW is the right time to start, to continue, or even to plan. Diversifying into export markets is always a good option for long term stability and risk mitigation, and this could be your time to turn your exporting aspirations into reality.

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Red Team Blues: Making the best of it

Posted on April 27, 2016 by Linda

Red Team reviews of proposals are often fraught with stress because of the impending submission deadline. There are principles to observe that can make this process easier and yield better results.

Over the course of several Red Team reviews, I have seen some done very well and some done not so well. In most cases, the review excelled in some areas while failed in others. The best Red Team reviews are those that are designed to minimize shortfalls.

One of the best Red Team reviews I have experienced was well-run in many respects. The proposal leaders did a good job of identifying the expertise required for the review and brought in people who had such expertise. As well, the leaders understood that the Red Team review would be a perfect setting to improve the understanding and increase the buy-in of key project stakeholders who were not involved in the writing but would be involved in the approval of the proposal and the execution of the contract. The Red Team produced a high volume of valuable comments that covered the full range of subjects and issues covered by the proposal. Together, the various comments worked synergistically together to improve the probability of win for the proposal.

On another recent Red Team review, just about everything was done wrong. One executive was too far removed from the process to provide any real value, except from the perspective of a strong customer relationship. A second executive (whose employment turned out to be short-lived) stated that he did not want to have a detailed understanding, but merely wanted it done right. Yet a third executive, who had no background in proposals, adamantly refused to take advice from the experts on the team.

Needless to say, this proposal failed to meet the mark in many ways.

ALLOWING THE EPIPHANY TO HAPPEN

Realizations are the set of “eureka” moments that come to the reviewers. These are the bases for epiphanies. Some realizations may just come in the form of small refinements. Others may be more significant in that they push the solution to the next level. And finally, some realizations could make-or-break compliance issues that had been unintentionally overlooked. Whatever the case may be, it is essential to create the time and space to allow for these epiphanies to happen. And if a typical reviewer produces at least five of these, this amounts to tremendous value.

Expertise of the team must cover the full spectrum of the proposal. This includes operations experts, technical experts, logistics experts, project management experts, financial experts, economic benefits (ITB) experts, and marketing / sales / business development experts. The full set is required. And the expertise brought needs to be current, not years old.

Details, details, details. The Red Team has to pay close attention to details. Every word needs to be reviewed and interpreted. Proposal authors working on a time schedule or as an “extra” duty may not pay close enough attention to detail. It is up to the Red Team to identify these shortfalls. One Red Team I was part of had a few reviewers on a particular section. Each had a different background and expertise. Each caught deficiencies in their own area with only one or two of the reviewers reading in such detail that they caught a major non-compliance issue.

The total proposal should be reviewed. Typically, the focus is on the text of the technical and management proposals. But with the economic benefits (Industrial and Technological Benefits (ITB) proposal now being rated in Canada, this has become of extreme importance. Old school (Industrial and Regional Benefits (IRB) writers and reviewers are no longer valuable; the new requirement is to produce a document that can shine in the eyes of the evaluators. Another often-missed area is the costing review. As I have said before, the cost accuracy, assessment of risk, and the challenge of the costs, is really important. So many times a proposal team goes into a final pricing review with only estimates. Then, when questioned by the executives the risk is found to be too high, and by then it is too late.

Early performance of the Red Team review compels the authors to work faster and allows time to effect changes brought forth by the Red Team.

Acceptance of expert advice by leadership is critical – the personality flaws of “need to be right” or to appear as “the smartest person in the room” have no place here. If leadership does not have the experience and expertise, they should listen to those that do.

Messages and win strategy – this is perhaps the most important. How will your proposal stand out from the rest? What will compel the customer to pick you? How will you score the highest in accordance with the evaluation criteria?

In summary, the Red Team principles are:

  • Realizations
  • Expertise
  • Details
  • Totality
  • Early
  • Acceptance
  • Messages

 

By the time you’re at Red Team you have invested significantly in a capture campaign and a proposal development effort. So, go the extra mile to do this right.

 

Canadian Defence Review: Volume 22, Issue 1​

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Linda Wolstencroft