As discussed in a previous post, a tendering dedicated resource is a must and it represents the first step in building a successful tendering organization. But plenty of questions will remain unanswered, even before you tackle the governance of your tendering business. However, a tendering organization will begin to be defined through the creation of a dedicated resource, as well as by determining the department the tendering resource is located. But creating and fostering tender leadership and governance are essential. That’s our focus here.
Chicken and The Egg: Dilemmas of Governance and Leadership
Governance can be instituted before tackling tendering leadership. It’s also feasible to establish a global perspective without anyone enforcing or overseeing it. At the same time, it’s challenging to launch and cultivate tendering leadership without a governance policy in place, stipulating the role and responsibilities of leadership.
Honestly, there is no best way to start and it is largely context dependent. But, from our experience, leadership is the wisest starting point: people ultimately matter most. And it’s easier to create a tendering leadership team that will create the governance structure — not the other way around. However, the legitimacy of the governance will have to be proven, if not written, by a globally sponsored tendering organization. Seniority and experience can legitimize the governance, and most importantly, the people that manage it.
Flavors of Leadership
There are three flavors of leadership that yield varied results and setups:
- In-country tendering leadership: each country has a person assigned to oversee and drive tendering activities. Ideally, that individual would have a tendering network to support them.
- Regional tendering leadership: instead of creating a role in each country, a new role is created at the cluster level that leads tendering activities for all countries within the cluster. Certainly, leadership will be tasked with more high level concerns and activities, driving the overall effort, not the day-to-day execution of tenders. Instead, this resource will focus on optimizing outcomes of the tendering process, particularly for clusters of countries that act similarly. This role could be instituted in a “Center of Excellence,” leveraging all existing best practices in the cluster and assuring, if existent, the governance process is being followed.
- Global tendering leadership: the last alternative is to create a new global role. This role could be located in the same department as the tender resource, but tasked with global responsibilities. An appropriate level of seniority is likely required because they will be driving the company’s global strategy.
Broadly, the global lead is often responsible for overall governance and cross-functional coordination of best practice sharing, as well as introducing new industry solutions, whereas the in-country leads will be responsible for day-to-day tender execution and relationship management with local authorities.
Where to Start
What is the optimal strategy? As always, it depends. Instead of thinking of a “one-size-fits–all” approach, first evaluate the following:
- Country differences:
- Including the strategic importance of the target markets for your organization
- Tender volume
- Bid price levels
- Tender authority maturity
- Maturity of your organization’s tendering in each country
- Balance of power within your organization as a whole
- Brand strategy as it relates to revenue and profit maximization, global footprint, and so on.
In order to understand profit and revenue potential, analyze the strategic importance of the target markets, including tender volume and respective bid prices. Compare these insights among countries. Strategic importance may vary widely from country to country. It might be preferable to be at the country level in countries that have a high strategic importance, if volume is particularly robust and bid prices are high.
Maturity level of the countries — which again may vary widely — is another aspect that must be observed. You may want to group countries in one cluster that are similar in terms of maturity (same needs, structure, and tendering regulations). A regional cluster may be preferred, but this might also be mixed with some in-country leads for tender intensive countries that contain exceptionally mature tendering authorities.
Next, balance of power within your entire organization should be observed. In companies with a strong impact from global to local, creating a global tender lead may be preferable. It will shape the entire organization much more easily than in-country leads.
Finally, all these factors stem from the overall motivation of your organization, usually articulated by its brand strategy. What is the ultimate objective? Does your organization, for example, want to achieve revenue and/or profit maximization, and/or increase their global footprint and presence in all markets independent of cost?
And remember, these points are far from inclusive. A treatise could be written on what we discussed here —key aspects to consider and prioritize. Our experience has shown that tendering leadership will occur across all levels and differences often arise within each “tier” of a company, or department. And that is all ultimately driven by the greater context, the size and structure of your organization and its history with tendering, as well as its desire to evolve or expand it.
Interested in learning more about our perspectives on tendering? Take a look at our benchmarking study results or contact Ruven Remo Eul. Two upcoming blogs will address governance-specific questions and the linkages between tendering and product portfolio lifecycle.