~~I have just finished reading Malcolm Gladwell’s, “David & Goliath – Underdogs, Misfits and the Art of Battling Giants” – ostensibly about what happens when ordinary people confront major disadvantages or giants. While it is possible to find flaws in some sections of the book, the section focussing on the story of David and Goliath does offer some lessons for smaller businesses competing with large companies or corporations.
The traditional take on the story, down the centuries (and indeed explaining how the phrase “David and Goliath” came to be embedded in our language as a metaphor for improbable success against a much larger opponent) is of a miraculous victory by a shepherd boy armed only with a sling, against a giant, seasoned warrior, heavily armed and armoured.
However, as Gladwell points out, armies of that time had three types of warriors: cavalry (on horseback or in chariots); infantry –
foot soldiers carrying swords and shields; and archers and/or slingers (slingshot users). In skilled hands a slingshot can be lethal at two hundred metres, and was of such importance in ancient warfare that the three kinds of warrior balanced each other, like each option in the game of Rock, Paper, Scissors: the infantry with their long pikes and armour could stand up to the cavalry; the cavalry could quickly close with slingers; and archers and slingers were deadly against foot soldiers, often weighed down as they were by armour.
Goliath was expecting single combat with a similarly heavily armed and armoured (and given Goliath’s giant form, presumably smaller) infantry opponent. What he got was the one type of warrior who, at a distance, was deadly to infantry, and who was faster and not playing by the rules Goliath had taken for granted.
So we should not always assume that bigger is better, and that small to medium firms cannot compete in tenders with large companies armed with extensive infrastructure, management structures and comprehensive, documented procedures. There are often limitations to the apparent power of large companies, and smaller competitors may have strengths which may not be immediately obvious.
Competitive advantage or differentiation does not necessarily mean bigger or better but, rather, being different, in a way that represents value or benefit to the customer. Potential differentiators include specialisation and expertise; local presence; speed and responsiveness to changing circumstances and customer requirements without the need to run the request through several layers of management layers; personalised customer service (including a human response rather than the opportunity to “Press 1 for Robot 1; 2 for Robot 2 …..”); and, of course, the potential to offer lower pricing through lower overheads.
Tender Consulting do what we do best: we specialise in preparing professional, successful tenders and proposals, rather than being general marketing or technical writers – so we really know what we are doing. We work with SMEs as much as large businesses, and 75% of those tenders are wins or short-listed. And for a company that works with SMEs as well as large businesses, we have unrivalled experience and breadth: we work in virtually all industries except IT, training and construction.
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John Hough at Tender Consulting
Glad you liked it, Phil. Clearly, while there is considerable potential for SMEs to compete successfully in some tenders with larger companies, there can be real limitations, and these often include the firm’s actual or perceived capacity to reliably perform the contract (and to cope with any “… run over by a bus?” and other contingencies). If a firm is confident it has the required capacity, it would be sensible to seek to overcome or anticipate any doubts on the part of the purchaser by providing clear details of that capacity, in terms of available and reserve personnel; think about suitable subcontractors; and include a brief outline of contingency planning to address e.g. the “… run over by a bus?” thing and other contingencies. And if, after you have outlined this, it does not look completely convincing (“Yes, absolutely, we can do this hands-down”), forget everything I said in my article and don’t tender for that contract.
Phil Khor, Founder at SavvySME
Great summary John, I've been looking forward to reading this book .. it's on my long list of reading pleasure! :) I agree w the differentiators that smaller businesses bring, but I'm curious in your experience, how do smaller businesses overcome the stigma of being too single point sensitive or unreliable because of its small team size. In your experience, how should smaller businesses respond to this particular question in a tender process?