Never Underestimate The Risk Of Winning

The thrill of the chase is a powerful drug. The mere prospect of winning a new client is enough to set your heart racing and your creative juices flowing. Suddenly, preparing the papers for that long overdue AGM is not that important. You immediately begin work on your response to the Request for Tender that just dropped into your inbox unannounced. 

This, of course, is your first mistake. The bird in hand is worth more than the one yet to be bagged. 

Your second mistake is less obvious: ignoring the risk of winning. 

What if you win this tender without really knowing much about the scheme and it turns out you can’t work with them? Their budget is all wrong, and that becomes your problem. Their attitude is disrespectful, and you bristle at the mention of them. The committee’s internal dynamics are unmanageable, and you can never win. 

In the short term, the hit to your profitability is huge, matched only by the additional stress to you and your team. In the longer term, the client probably leaves anyway, and you have a significant chunk of revenue to replace. 

I recently saw an RFT full of red flags. It was from a large, complex scheme located in the inner city. It was a ‘prestigious’ building, and you knew it because they told you so, repeatedly. 

Everything about the RFT was aggressive. Its tone. Its style. Its content. There were lots of ‘musts’ and BOLD, unnecessarily capitalised, words. And the requirements were over the top. My two favourites:

• the right to approve staff and terminate the contract if not satisfied with the new appointee
• the requirement to submit your entire client list with confidentially provisions only applying to the tenderers not to the owners corporation.

The committee also reserved the right to use any information provided in the RFT as their own, regardless of the success of your tender. 

Nothing about the RFT gave you any insight into what these people are looking for, what their unique concerns and issues are, what it was about previous relationships that hadn’t worked for them, and their values. Nothing said, ‘we are looking to form a relationship with a trusted advisor’.

Without these things, the risk of winning this tender is too high.

My friend, Jim Stackpool from Certainty Advice Group, recently wrote about the difference between an ideal client, and an aligned client. The strata committee that issued the RFT I looked at may have been an ideal client for the strata manager I was advising, but were they an aligned client? Would the parties be able to work towards shared goals? Could they create a harmonious, well-maintained and financially sound community that residents are proud to call home? I’m not sure, and that’s the point. 

Before you drop what you’re doing, and put your profit and stress levels at risk, you need to be sure of these things.