The winner takes it all
See what business leaders can learn from the 2016 Olympic Games
After a long bidding process, Rio de Janeiro will host the 31st Olympic Games. The Brazilian city won what is effectively one of the biggest RFPs in the world.
What lessons can companies learn from the battle to win and stage the Games?
An Olympian effort
When it comes to a request for proposal (RFP), there is probably nothing larger than bidding to host the Olympic and Paralympic Games. The bid preparation work alone can take up to seven years, as can gaining the support of significant stakeholders in the hopeful host city.
It requires a huge team of specialists, and the budget to deliver the winning bid can run into millions of dollars. As a result, entrepreneurial companies can learn a great deal about preparing and securing a critical bid from the experience of a winning city like Rio de Janeiro, which will host the Games in 2016.
Rio’s journey to the Olympics has been a long one. The city attempted three previous bids, but it was only in 2006 that the Brazilian Olympic Committee elected to put the city forward as its candidate.
Three years later, the International Olympic Committee (IOC) chose Rio from a strong shortlist that also included Madrid, Tokyo and Chicago. In 2016, we will see the fruits of its labors.
The process of the bid was arduous, requiring the city to jump through many hoops, and the projected budget for the Rio Olympics is vast: US$11.6b for infrastructure and US$2.8b for the organizing committee. While most companies bidding for large-scale RFPs will not be looking to deliver on an Olympic scale, they must determine whether they have the resources and stamina to support the bid process.
It may seem appealing to bid, but that process might stretch the company too far in terms of its ability to operate. “Responding to an RFP with the potential to elevate your business into another gear is both daunting and exciting,” says Antonio Luiz Vita, EY’s SASA and Ernst & Young Brazil’s Advisory Managing Partner.
Bids can pull resources out of key areas of the business, so without proper planning and resourcing, companies may not make financial choices that are effective and efficient. Companies must determine what investments need to be made pre-bid to demonstrate a commitment to it without these being perceived as a waste of capital if the bid fails.
Richard Evans, Ernst & Young Brazil’s Director, Performance Improvement, says stakes are high for these big programs, so governments and private-sector companies have to pursue their quests comprehensively and exhaustively for the right company to deliver on its bid. “If an Olympic city falls behind on its commitments and ends up with delays that could jeopardize the staging of a Games, the consequences can be dramatic,” says Evans.
“The same is true if a company wins a bid and then fails to deliver its promises. The consequences for the supplier are potentially irreversible and may have huge impacts on their reputation, domestically and globally.”
Making a convincing case is key
Key to securing a large-scale bid such as the Olympic Games is making a convincing case as to why your company, rather than any other, should secure the contract. “Companies are becoming more and more aligned on price and quality,” says Evans, “so it is the unique selling points of a company that can help differentiate, and ultimately secure, a win.
Responding to an RFP with the potential to elevate your business into another gear is daunting and exciting.
Without understanding yourself, it is difficult to produce a bid that answers the question, ‘Why us?’” Evans advises companies to start their bid preparations by doing their homework.
This means assessing their strengths, weaknesses, opportunities and threats (SWOT) and those of rival companies. Rio played to its strengths: Brazil is a sporting nation, and Rio a naturally beautiful setting favorable for hosting all categories of sports within a single city.
It touted Brazil’s economic stability, alignment between its three levels of government, popular support and prior success in hosting a major sporting event (the XV Pan American Games Rio 2007) to its advantage. However, the city also faced its weaknesses: limited infrastructure and options, bureaucracy, complex tax structures, issues with security, and a lack of accommodation.
Evans advises turning weaknesses into strengths — in other words, propose to speed up development in these areas as part of the bid. Putting weaknesses on the table and committing to address them can demonstrate to the client how serious the company is about the bid.
It’s also important to understand competitors’ strengths and imagine how they might bid. Knowing their weaknesses can help strengthen the bid focus.
However, companies shouldn’t waste time focusing on “maybe” competitors but instead concentrate on the ones that have already announced their intention to bid. Hitting all the technical marks isn’t enough.
There has to be a compelling, emotional connection to the bid that enables a company to stand out. Focusing on becoming the first Games in South America was vital to Rio’s success.
In a presentation to the IOC, Carlos Nuzman — who is now President of the Rio 2016 Organizing Committee, but was at the time leading its bid — displayed a map of the world showing all the previous Olympic host cities. South America’s blank image caused a major impact.
“Imagine the power of the Olympic Movement reaching 65 million under-18s in Brazil and 180 million young people across the whole of South America,” he said in his pitch. The Brazilian Government was quick to support the bid and the IOC acknowledged this when it chose the city.
“Aligning stakeholders for an Olympic bid is not just about getting a few City Hall people behind the bid,” explains Evans. “It is about getting some of the most significant and powerful stakeholders in a city or country to support what will become the most important RFP response they may ever have to develop.”
Timing is everything
Aligning stakeholders in a company may take longer than anticipated and, if some of those stakeholders are sub-contractors, delays can soon mount up. It’s vital to get your bid on a tight schedule, with all stakeholders aware of the deadlines.
Timing the bid is as important as having a technically flawless proposal. For Rio’s fourth pitch at the Olympics, Evans believes that the city showed better overall planning and the country had greater economic stability and currency strength.
Timing the bid is as important as having a flawless proposal.
Rio also proposed an impressive legacy project for an iconic city plagued by social and infrastructure problems. As with the Games, a commercial bid should only be considered if the time is right for the company and there is a high chance of success.
The RFP may look very appealing and stakeholders may get excited about responding, but will rushing into a decision to bid cause more harm than good? A failure to win due to a lack of preparedness or experience may cause the key stakeholders not to bid for new RFPs in the future.
Using time effectively is also essential. Planning the bid process and meeting the deadlines of the RFP
are critical to the success of the bid. No one wants to drop out due to something as elementary as running out of time or forgetting to submit two copies of the bid.
Closing the deal
Using key people and relationships to promote the RFP helps answer the “Why us?” question. “To win, you need to be surrounded by star players,” says Leonardo Gryner, the Organizing Committee’s
Chief Operations Officer.
High-profile personalities and opinion leaders can play a fundamental role in conveying ideas, values and beliefs. David Beckham emerged as an important ambassador for London 2012, and Rio invited soccer legend Pelé to join its bid team at the final vote in Denmark in 2009.
“The bid submission should not be a quiet affair,” says Evans. “There should be a sense of pride that surrounds it, making it look well supported and giving it a strong start.”
Building on solid foundations, a company must maintain its focus throughout the RFP, submitting its bid in a controlled and confident way. Last-minute submissions can cause unnecessary stress within the bid team, and if submitting in person, this can often be reflected in the people delivering it.
Once the bid is submitted, the promoting doesn’t finish. There may still be skeptics who need convincing. Your city or company may have the best technical bid in the world, but if the message of “Why us?” is not refined and delivered effectively all the way up to the announcement, then there is still the possibility of losing.
As the Rio team showed, it pays to keep working until the last possible moment.
Five ways to win an RFP
1 Ensure you have the resources.
A bid may seem appealing, but could it stretch your company too far?
2 Don't hide your weaknesses.
By committing to address them, you'll underline how serious you are about the bid.
3 Understand your competitors' strengths.
Imagine their potential bid strategy and understand how to counter their strengths.
4 Keep to schedule.
Ensure all stakeholders meet all deadlines and don't run out of time.
5 Be different.
Make your company stand out from the competition for a compelling reason. Then shout about it.