A streamlined government contractor planning process

Managers often complain about conflicting and changing priorities, vague targets, unpredictable results, unsound investment strategies, unclear lines of authority and responsibility, confusion and staff frustration.

Too many government contractor executives echo Lily Tomlin’s lament: “I always wanted to be somebody, but I should have been more specific.”

There are many articles and books about how to write a business plan. But the real challenge — what separates the slow-growth organizations from the barnstormers — is a leader’s willingness to develop a business strategy that consists of clear and measurable objectives (See Figure) has the support of key staff and is used throughout the year to measure progress and make decisions.

The age of omnipotent business leaders is over. And although this top-down only management model may produce near-term results, eventually even the most loyal subjects will rebel. Unfortunately, a lot of managers still haven’t learned that input from employees is crucial to successfully identifying the internal factors that will affect the organization’s ability to sustain reasonable growth. And external changes in enabling technologies, budget and policy, market/citizen demand, competitor strategies and resource supply also need to be reflected in the business plan.

The next figure below presents a practical business planning process that illustrates the relationship between a company’s mission (your purpose for being in business), vision (what the company will look like in five years), strategic envelope (the services/products and target agencies you will concentrate on), breakthrough objectives (the objectives, if achieved, that will have the most impact on growth), and priority actions (the most important steps to take to achieve the objectives). This process should then drive business development and marketing plans.

Companies should also obtain a thorough knowledge of the government marketplace. This information is readily available on the web and from market research companies and consultants. It should include overall Federal, state and local government and individual agency budgets, priorities and key technologies as well as major program initiatives, incumbent contractors and buying practices. This will allow the companies to better match its products and services with specific agency needs because what you are selling isn’t as important if they don’t want to buy it.


It is also important for companies to carefully consider their value proposition. For example, there are at least three types or levels of professional services companies or services divisions of product companies in the government marketplace:

1. High end professional services (Accenture, Grant Thornton, IBM, ERP companies like Oracle) – these have fairly high wrap rates (and labor rates) that reflect their bonus structure, large training budget, internal R&D and product development overhead, and, frankly, company cache!

2. Mid – tier services contractors/integrators (CSC, Lockheed Martin, Northrop Grumman, Booz Allen, SRA) – these have competitive wrap rates but not rock bottom. The range varies depending on the competition, the agency and company cost center that is bidding the job. Many of these larger companies have separate lower cost business units to compete on services jobs like range support contracts (# 3 below).

3. Low end/highly competitive services contractors (Many small and mid size companies) – these companies usually have pockets of very qualified technical staff and PMs and then a whole bunch of mid to junior level technical folks. They compete on GSA contracts, government wide acquisition contracts and schedule buys and offer average benefits to their employees. They also do not typically support product development overhead in their labor cost pools.

Government sales staff almost always have to balance between “give me more competitive rates” and “give me higher technical quality/solutions.” This is a healthy push/pull that goes on in growing companies. It definitely influences how you approach the market and your sales pitch.

Business leaders who run their own strategic planning meetings are not always open to suggestions from staff about different strategies. How willing are employees to express their true opinions, especially in an open forum? A strong outside facilitator can usually level the playing field enough to allow an honest exchange of ideas, but even the world’s most enlightened facilitator won’t succeed if the leader resists change.

Incentive plans should reward behaviors and results that are consistent with strategic objectives. But strategic plans alone don’t guarantee business growth — action plans do.

Strategic objectives must be translated into relevant and measurable actions assigned to individuals who are held accountable. Similarly, strategic actions should be monitored. If you don’t care enough to ask your staff for a status report, they won’t care enough to perform.

Finally, prioritize and estimate the cost and return on investment of each action. Then match all the actions with the operating budget. Only implement what is affordable. I’ve worked with several organizations that have developed a gigantic list of actions, only to turn them over to managers for implementation in their spare time. This almost never works.

If I hear one more business manager declare, “We need to get it done with sweat equity,” I’m going to scream! Aligning your investments with what you are talking about takes courage. But it’s the only reliable way to become somebody. Just ask Lily.

– M. Lisagor


Interested in any of these federal business opportunities?

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