PWin = P-ew!

PWin–probability of winning–is one of the most commonly used metrics in business development. In theory, it tells us what our chances are on any given opportunity. Among other things, PWin is supposed to help us make “informed” decisions about which opportunities to pursue and which to let go of. By using PWin as a decision basis, we think we are making smart decisions by being “objective” and data-driven.

Unfortunately, that’s hooey. In fact, PWin stinks!

The first key thing to understand about PWin as it is most commonly used is that it is rarely derived from solid, objective, data itself. In most cases, it is based, essentially, on someone’s judgment or opinion–and thus, by definition, is subjective. Merely assigning a number to something doesn’t automatically make it objective, or even “data.” True data is something that we can reliably measure–like the distance from point A to point B, or the amount of time it takes us to get there. PWin, by contrast, isn’t measured; it’s assigned.

Even worse, PWin often doesn’t bear any relation to the real probability of winning an opportunity–objective or subjective. Business development and capture professionals typically have an opportunity “pipeline,” and in many (perhaps most) organizations, their performance is evaluated, in part, on the robustness of that pipeline. Therefore, they are incentivized to maximize the number of opportunities in their pipelines.

Now, many organizations have defined rules for which opportunities will remain in the pipeline and which will drop out–and those rules often are based on PWin. The rule may be something like this: If PWin > XX% the opportunity stays in the pipeline; if PWin < XX%, it drops out. As a result, BD and capture professionals may be tempted to assign high PWin to those opportunities–regardless of whether that PWin bears any relation to reality. Hence, PWin almost always is artificially inflated.

None of this is meant to impugn the character of BD and capture professionals with regard to how they treat PWin. The problem is more fundamental: We shouldn’t be using PWin at all–or, at least, we should be honest about what PWin is and is not, what it can tell us and what it can’t tell us, and how we should and should not use it.

• What PWin is: A judgment–which may or may not be well-informed
• What PWin is not: An objective, data-based metric
• What PWin can tell us: One person’s opinion regarding the probability of winning a particular opportunity
• What PWin can’t tell us: The true probability of winning
• How we should use PWin (if at all): As one element in a robust, nuanced approach to decision making regarding pipeline opportunities
• How we should not use PWin: As a metric for incentivizing BD and capture professionals (e.g., as an artificial means to maintain a “full” pipeline), or as a replacement for more robust, nuanced, meaningful opportunity assessment

So, tread lightly and carefully around PWin; don’t step into the stink!