Imagine that the foundation for which you work needs to find consulting expertise for a particular project. Everyone agrees to develop an RFP to get qualified consultants to respond. That’s thorough, fair, and transparent. Right?
I rarely respond to RFPs for consulting engagements. Their expectations are not thorough, fair, or transparent. I find most RFPs to be a poor use of time and an impediment to my ability to improve our clients’ conditions. What’s worse, many foundations fail to understand how an RFP process can waste their time and hinder their success.
Foundations use RFPs to find consultants for four primary reasons:
1. They hope the proposals will give them free insights.
2. They don’t know many consultants and hope to identify good ones.
3. They believe the RFP process demonstrates the holy grail of “transparency.”
4. They declare it to be “our policy.”
All of these reasons are flawed. While the basic goals are fine, none of them requires the use of a time-consuming and talent-limiting RFP process. Here’s why RFPs rarely fulfill their goals:
1. Using RFPs to get free advice. I once had a foundation client solicit consultants using an RFP, and he specifically told me that his plan was to identify the best ideas from all the proposals and then have the chosen consultant (likely the cheapest) implement them. Like most consultants, I find this approach offensive. It takes a tremendous amount of unpaid time and uncompensated resources for a consultant to put together a well-considered proposal. It is not the job of consultants — often sole proprietors without consistent income — to subsidize philanthropic foundations that have millions or billions in assets.
What’s better: I would rather meet a foundation president for lunch and share free advice — even if I know I won’t get the job — than spend 16 hours putting together a proposal that might or might not get approved. It’s a more honest relationship and leads to better conversations, network building, and opportunities for everyone down the road.
2. Using RFPs to find high-quality consultants. Most of our business, like that of any consultant worth his or her cost, comes from referrals. Although there are always exceptions, consultants who have time to respond to multiple RFPs either aren’t getting enough repeat or referral business or they need to charge high fees to compensate for all the staff time spent submitting proposals. If this is the case, these probably aren’t the best consultants to choose among.
What’s better: I have successfully responded to RFPs from clients with whom I had built relationships. I’d take three strong repeats or referrals over three unknown proposals any day. Referrals are built on positive relationships. RFPs are built on assumptions and guesswork.
3. Using RFPs to demonstrate transparency. Foundations should be transparent — they are stewards of the public trust. But there is little that’s transparent in the RFP process. Foundations don’t publicize which consultants they invited, or why. The consultants themselves rarely get to meet with the ultimate decision makers and therefore have no way of fully understanding the foundation’s needs or objectives.
What’s better: The foundation could invest less of its own staff time and yield a better result by seeking good referrals and then inviting those consultants in for meaningful, open conversations with decision makers.
4. It’s “our policy,” no matter what. Some foundations have a policy to ask at least three consultants to submit proposals for every project. This is frankly a waste of time. If a foundation knows of a terrific consultant with whom they have worked before, who has demonstrated quality results, is equipped to do the work, and whom they want to hire, why not just hire that consultant again?
What’s better: Trust yourself and your staff to know when there’s a better way to hire a consultant. When issuing an RFP is the best way to get what you need, go for it. Otherwise, read next week’s newsletter for 5 better ways to find a high-quality consultant — and save your time and resources for more urgent needs.
Or get more details now with the full article at Why RFPs Waste Time – Choose a Better Approach to Finding a Great Consultant.
Posted by Kris Putnam-Walkerly © Kris Putnam-Walkerly and Philanthropy411, 2014.