Left Brain, Right Brain

Using Lean Six Sigma to improve proposal management

Effective proposal management includes a blend of skill and intuition, analytics and insight. It uses proven processes to manage outcomes and provide margin to deal with the unexpected. Often thought of as more creative and imaginative than statistics-based or analytical, in truth, proposal management involves all types of intelligence—including what’s traditionally considered left-brain and right-brain thinking.

That said, many of us might have a difficult time finding a place for Lean Six Sigma in our typical proposal worlds. A set of techniques and tools originally used to remove flaws in repeatable manufacturing processes at Motorola, Six Sigma was introduced to business operations by GE with the premise that if you can eliminate even small defects, you will reap large savings as those tiny improvements are repeated millions of times in, for example, cell phone production. This concept was later coupled with lean manufacturing methods on the assembly lines of Boeing, IBM, and Whirlpool, among others, and Lean Six Sigma was born.

Six Sigma was introduced to business operations by GE with the premise that if you can eliminate even small defects, you will reap large savings.

It’s a long way from building 747s to bidding on task orders, and applying Lean Six Sigma to proposals may seem like a stretch—or even an expensive way to reach an obvious conclusion. But given the repetitive nature of task order proposals, it turns out to be an ideal way to evaluate activities, synchronize functions, remove conflicts, and conserve valuable human energy and bid dollars. The objective is the same as Boeing’s or Motorola’s—even small gains generated repeatedly can produce big results. Especially now, as government contractors need to do more with less, Lean Six Sigma’s emphasis on process improvement may offer substantial and repeatable benefits.

Bechtel Corporation, the company I work for, has made a significant investment in Six Sigma and Lean Six Sigma, going back to 2001. Using process improvement projects (PIPs) to improve every aspect of our work, we have generated savings and cost avoidances totaling more than $3.15 billion for ourselves and our customers through 2012. Bechtel also has a robust and well-respected proposal process for government work that has proven successful with many federal agencies.

Several years ago, the government proposal center I manage saw a big upswing in the number of task order proposals we were producing. When proposal costs on one contract seemed out of line, the repeated nature of that contract’s very similar task orders afforded an ideal opportunity to examine our process through a Lean Six Sigma lens. We had no idea what we’d find or if this analysis would even work. There was no literature on studies similar to the one we proposed, and among the 4,910 PIPs saved in Bechtel’s PIP repository, ours is still the only one undertaken with the objective of examining and redesigning an entire proposal development process.

Corporate management was fully supportive of our effort, and I was fortunate to have a Lean Six Sigma Black Belt on my proposal staff to facilitate.

The outcomes exceeded our expectations. In the end, we had completely mapped our proposal process and rewritten proposal team roles. Left-brain statistics included:

  • 60 percent reduction in overall hours/cost (Figure 1)
  • 77 percent reduction in estimating hours/cost (Figure 2)

For the right brainers, it produced similarly strong improvements:

  • Greater synergy within the proposal team because we understood each contributor’s role and could help each other succeed
  • Decreased internal team competition, increasing trust and leading to more creative collaboration and problem solving
  • Greater availability of subject matter experts and functional personnel to be applied to billable project work or other valuable corporate tasks
  • Proof that proposal centers can be places where collaboration produces solutions that actually reduce business development costs, instead of being “cost sinks,” thereby facilitating more bids and potentially increasing return on investment
  • Management buy-in gained by using well-respected corporate tools to form a basis for future cost and outcome comparisons.

Note how many more words it takes to describe right-brain concepts.

The balance of this article uses APMP’s STAR format to describe where we started, what we did, and outcomes that may prove useful in your proposal work.

Situation

We had won a contract with large engineering and construction tasks on very similar U.S. Army forts around the world. The cost of the first few task order proposals was unexpectedly high and bids were tying up corporate technical experts too long. Short proposal turnaround times were consumed by the development of complex technical approaches, which left too little time for cost volume development and generated costly overtime. With an overall goal of reducing cost, any new process also had to accommodate senior management review and approval times, be usable by other proposal centers and exportable to other business units, and fit within the company’s gate review process.

Tasks

We formed a PIP team, defined its charter, and submitted the PIP to Bechtel’s corporate Lean Six Sigma function for approval. Approval was granted, and the project was placed on the corporate PIP tracker, making success or failure visible to anyone in the company. We then trained the team in Lean Six Sigma processes and tools, established a PIP schedule, and mapped our current proposal process and subprocesses. Following that, we developed an ideal proposal process, tested elements on proposals going through our center, and reviewed the interim results. Next, we documented the revised team member roles and responsibilities and placed them on a corporate website for all Bechtel employees’ use. Last, we ran a full-scale test of the new proposal process, compared results against the old process, and published our results within Bechtel’s Lean Six Sigma community for peer review.

Activities

As the Lean Six Sigma Champion candidate for this PIP, my activities included forming the team, helping write its charter, working with our Black Belt to conduct process mapping sessions and develop an ideal state, rewriting the roles and responsibilities, participating in peer reviews, getting the results validated by our Lean Six Sigma corporate function, and presenting the results to senior management. It required a large time commitment worked in between proposals and that the PIP team stay together for an entire year.

The most important PIP activity was process mapping. Facilitated by our Black Belt, we started with a blank wall of whiteboards and created two maps over many sessions. The first map showed what we currently were doing and revealed conflicts inherent in our activities. The second, a 10-foot-long flowchart, documented the revised process. Both maps included horizontal “swim lanes” that identified personnel groups such as business development, proposal center, functional team, cost team, procurement, legal, and senior management. Vertical segments marked the various stages of the proposal, and the bottom time axis indicated which members of the core proposal team participated in major activities. Across the main body of the revised process chart, we sequenced every activity by every group. Each visible box represents only the highest level action and expands electronically to reveal many subprocesses.

Because everything was presented and discussed by the full team, this exercise proved very valuable in generating a cross-team understanding of all roles and needs. The resulting consensus broke down institutional barriers, led to greater synergy and trust, enabled us to support each other better, and formed the basis for new written roles and responsibilities.

The real surprise was how much proposal costs decreased—60 percent. Much more than we expected.

Results

We made many process changes, but one in particular—having a small team develop the technical approach before bringing in the full proposal team—produced striking benefits. Proposal costs are primarily labor costs, so it was no surprise that those two elements decreased in parallel. The real surprise was how much they decreased—60 percent overall—much more than we expected.

Figure 1 illustrates very different hour and cost curves, with blue representing the traditional full-team-on-board-at-kickoff approach, and red representing the revised approach, starting with a small team and building up. Advancing the technical solution allowed functional experts to focus their contributions early, freeing them for billable project work or other corporate tasks. It also increased time available in the short proposal schedule to refine content so that win themes and value propositions were clear and to ensure that cost was pared to a minimum.

The other surprise was in estimating where hours and cost were reduced by 77 percent, as shown in Figure 2. There was far less rework because solutions were largely set before the full proposal writing team was assembled. Fewer changes to the solution minimized repricing and rechecking of the estimate, which reduced overtime, fatigue, and the opportunity for human error at the end.

A final benefit of using Lean Six Sigma is that its methodology produces results that can be expressed in hard numbers, making them easy to understand and difficult to refute. Rather than relying on custom or intuition, you can offer concrete proof to left and right brainers, cost accountants and capture managers alike that: a) you have good reasons for the processes you use, and b) they really do work. And perhaps most important to APMP members, it provides a solid baseline against which to measure future work and continuously improve your proposal practice.


Peggy Dufour, CPP APMP, manages the Bechtel National, Inc., proposal center in Reston, Virginia. Dufour can be reached at 703-429-6351 or pdufour@bechtel.com.


References

  1. The PIP team comprised proposal management professionals and representatives from key functions, including business development, project management, engineering, procurement, construction, estimating, legal, and contracts, and was facilitated by a certified Lean Six Sigma Black Belt.

 

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