In this week’s blog post on our acquisition playbook study, we discuss a recommendation to make market research a core and continuous organizational capability. No longer should market research simply respond to an articulated requirement. Technology informs us of what is possible while requirements informs us what is useful.
Read the Draft Playbook, May 13, 2021. See the announcement here.
Background
Market research should inform virtually all decisions made on a program. For every solution planned in the master schedule, there is a constellation of alternatives. How is the rest of the world acting in similar situations? The answer changes all the time as the global economy accelerates technologies and creates new possibilities. Technological change no longer happens within the confines of programs or even governments. Acquisition officials must plan for the unplanned by building the capacity for recognizing and responding to opportunity.
The second play in Mason GovCon’s acquisition playbook is to make market research a core and continuous organizational capability. A strong argument can be made that the play should come first in sequence – ahead of requirements – because requirements are increasingly impacted by new technologies.
The market research play addressed two major aspects at a high level: active engagement and organizational design (Figure 2 below). Our thinking about the play has benefitted from the recommendations made by roundtable participants and other conversations.
Active Engagement
Communications Strategy. Outreach through trade shows, open doors, oral presentations, and so forth must be coordinated through a coherent communications strategy. How will the program office get the word out through traditional media, social media, professional memberships, and other channels like Slack? What will be the cadence for engagement? Look into the marketing strategies used by commercial firms such as content distribution, search engine optimization, making sign-up easy, and so forth. When interacting in public, government officials do not need to go through public affairs unless there’s a release of technical data. The bias should be towards allowing government personnel to communicate openly, recognizing that mistakes may be made.
Demonstration Events. One of the top priorities for a communication strategy is to provide clarity on the program narrative and on-ramp opportunities. This provides confidence so that industry can invest with an understanding of the revenue opportunity should they be successful. Coordinate regular “market research observations” as opposed to test events. This avoids formal procedures that can stifle the discovery process. Fund coordination of the event and $50,000 or so for each participant’s time. See in the real world what participants put on a white paper or oral presentation. Prize competitions and other alternatives are equally useful. Whatever the process is, provide clear and consistent details in the communications strategy.
Carve out the Budget. There is rarely any funding available for program officials to do site-visits or market research observations. Much less than flying out to observe performing and prospective contractors, officials sometimes do not even have the time or budget to drive 20 miles down the street. Downward pressures on workforce size at the same time their funds obligation has grown squeezes out the in-person interactions that generate understanding and enthusiasm for the mission as well as oversight and trust with the contractors. Adding a withhold to certain budget accounts can be an effective means for getting the program team out of the office to connect the figures on a spreadsheet to real technology and production.
Organizational Design
Market research can sometimes feel like a check-the-box exercise because so much of a program is pre-determined. Requirements are laid down and resourced by external organizations, often consolidating so many requirements that only a couple major primes have a chance to bid. Much of the market research function is outsourced to the prime in their contract proposal. Then, the winner has little incentive to continue market research and identify second sources after contract award. Moreover, many government officials have short tours of duty, perhaps three or four years. Much of the execution plan has been set by predecessors.
Active engagement not only requires officials to have the time, desire, and funds, but also the opportunity for their actions to impact the program. Creating an iterative process for requirements with a community of stakeholders opens the aperture of what is possible. However, organizational design should complement the new emphasis. The types of market research each program executive office or laboratory needs is different. We received key recommendations about the location and job functions related to market research:
Core to the Organization. Market intelligence should be an organic capability of the program office. Strategies and information should be coordinated throughout a program executive office as the primary portfolio, and coordinated with other organizations including the labs and accelerators. There are over 30 tech accelerators in the Department of Defense, and while these capabilities should be leveraged they cannot replace the domain expertise in the program office. Moreover, coordination of market research with related program executive offices is in everyone’s interests. In addition to building joint interests, it raises the expected revenue opportunities for industry participation in demonstration events.
Single Point of Entry. With market research being performed across numerous organizations, the problem of duplication arises. Vendors may feel like they are providing the same information and demonstrations over and over. Moreover, government officials involved in this market research must act cautiously if there are open solicitations they may be involved with. That protest risk increases the more modular contract structures become. In order to reduce protest risk and centralize aspects of the market research function, one individual in each program office should be designated the single point of entry. This individual may be a chief of acquisition or a deputy program manager who will never participate in source selection to avoid conflicts of interest. As all leads funnel to the single point of entry, this outreach official can broker meetings with technical or contracting representatives when there’s potential, and coordinate horizontally with counterparts across government.
Stratification of Duties. Market research needs not only differ by organization, but functional area as well. Science & Technology officers are responsible for strategic market research that may have program impacts in three or more years. The single point of entry in a program office is responsible for operational market research that may generate new contract solicitations including demonstration events. The contracting officer is responsible for market research at the tactical level associated with a particular contract order. Each of these officials has their own market research needs and leverages personnel from across the organization such as the contracting officer’s technical representatives.
One of the major challenges remains the effective distribution of market research without standing up another organization or functional area. Market research is everyone’s duty, but it’s difficult to prevent such a recommendation from resulting in it being no one’s duty. A single point of entry should serve as the leader for each organization, but market research is a team exercise.
Conclusion
Feedback from the acquisition community provided several insights for improving the market research play. Participants resoundingly approved of the idea that requirements should be able to respond to market research, elevating the tradecraft to proactive measures. Additional recommendations considered for integration include:
- Requests for Information should either very focused and short to support informed requirements or broad and open to invite new ideas.
- RFIs should never be 60+ pages.
- Ask about other contract vehicles the companies are working under to assist contracting officers in quickly accessing the right vendor.
- Leverage financial analysts by subscribing to research reports from Wall Street
- This not only helps programs discover new companies and technologies, it allows contracting officers to perform due diligence by reviewing recent transactions and spotlight assessments.
- On-ramp experimentation may sound expensive but it is the cheapest way to get along in the end, so make sure to include it in the acquisition strategy and properly fund the strategy.
- Need a consistent metric for transition success to incentive the scaling of new technologies into fielded solutions.
Want to participate?
Our request to you: What would you put in your communication strategy for active engagement with industry?
Please contact Senior Fellow Eric Lofgren at elofgren@gmu.edu. All feedback is welcome!
Leave a Reply