File: stage-2-09-gary-response-to-challenge-notes.md
Kestrel Medical: Gary's Response to Kewpie's Challenge Notes
Test case, Sample data. Gary's recommendations for Adam's SME sign-off on the 11 challenge notes in Calculation Pack v1.0. Nothing has been changed yet, and Sharon hasn't been contacted. Every Before and After below is a proposal, applied to Business Requirements v1.1 and spec.json only once Adam says yes.
Recommendation on approving Stage 2
Approve Stage 2 with conditions. Gross margin per cent (K1) and Gross margin by product group (K1.1) are documented but can't be run. The targets for Big tender win rate (K4) and Monthly reports that match the agreed set of numbers (K5) are still open. None of these stops Viktor building the story and the tiles. They do stop Jennifer's validation ("calculated as documented") and go-live. So:
- Close all three before Stage 4 is approved, not before Stage 3 starts
- Until then, the Gross margin per cent (K1) tile shows "Waiting for cost of sales from finance". The stated 41 per cent appears as a Working Hypothesis, with no status colour and never as a calculated number
One line per note
| Note | Recommendation | Gary's reason |
|---|---|---|
| Missing cost of sales (C1), Gross margin per cent (K1) and Gross margin by product group (K1.1) | Open question, plus a Business Requirements change to the display rule (row 1 below) | Margin is global's headline. We can't invent a cost source. Tom Nguyen names it |
| Win-rate target (C2), Big tender win rate (K4) | Business Requirements change: measure it as a count over the last 5 big tenders, not a yearly percentage (rows 2 and 3). The number stays with Deb Harlow | At about 2 big tenders a year, a yearly rate can only read 0, 50 or 100 per cent, which is noise. Sharon asked that Deb set the target, so I give Deb the form and a starting proposal, not a decision |
| Can the reports measure work as specified (C3), Monthly reports that match the agreed set of numbers (K5) | Business Requirements change: no, not as specified. Change it to Tom's check of each report's numbers against the agreed set (rows 4 and 5). Target stays open | The index records what each report says it uses, not whether its numbers agree. Sharon's own words were "one agreed set of numbers, with Tom checking the reports against it". The After matches that |
| Big-deal filter (C4), Average discount off list price on big deals (K2) | Accept Kewpie's correction (tender contract orders as the placeholder). Sharon's size rule stays an open question | The contract_id placeholder picked up service contracts. My draft was wrong |
| Discount target (C5), Average discount off list price on big deals (K2) | Business Requirements change to the target and thresholds (rows 6 and 7), for Sharon to confirm at the next contact | Holding 17 per cent is green by definition and does nothing for a 2-point margin rise. The tender discount jumped 3 points in 2024. Pulling back towards the 2023 level is the action Sharon described ("tighten pricing on big deals") |
| Base for 4 per cent growth (C6), Revenue growth on the year (K3) | Business Requirements change to the rationale (row 8). The base stays an open question for Sharon and Tom | Sharon said "don't take my word on the base". Until Tom confirms, I measure against 2026 actuals and show what that means in dollars: still about 3 per cent below 2025 |
| Annual amounts in tender values (C7), Big tender win rate (K4) and Our price against the winning price on lost tenders (K4.1) | Accept Kewpie's correction | Values marked "pa" are annual amounts. Multiplying by the contract length is right |
| Missing winning prices (C8), Our price against the winning price on lost tenders (K4.1) | Open question for Deb Harlow (winning prices from the debrief letters, Western Plains first), plus a Business Requirements change for the interim second source (row 9) | Winning prices are recorded for only 5 of 25 lost tenders. The price score from the buyer's scoring is a fair stand-in, if it's labelled |
| Scoring layouts (C9), Why we lost, from the debriefs (K4.2) | Accept Kewpie's correction | Comparing weighted points out of 100 is the only fair way to compare three different layouts |
| Evidence on "lost on price" (C10) | No change to the KPI list or the Problem Statement. One Business Requirements change to the backlog reason (row 10), and a new open question for Sharon | See the C10 note below |
| Rep credit (C11), Revenue growth by rep (K3.2) | Accept. Remove my parent-grouping filter (row 11). Ask Sharon how reps should be credited | Sharon asked "which reps are growing". The rep on the order line answers that. Account ownership is a different question |
C10: the data doesn't support "lost on price"
- What it shows (Strong Inference, Sample data, 3 tenders): service and support was the biggest scoring gap on all three big losses. On Highlands Ambulance we were 1.5 per cent cheaper than the winner. Across 20 scored losses, price was the biggest gap in only 3
- Does it change the requirements? No. Sharon's confirmed words were that she wants "the evidence to prove or disprove it". The Problem Statement and the tender measures were built to answer exactly that, and they have. Changing the statement now would put words in her mouth
- What it does change:
- Viktor's story should lead with it, because it's the answer Sharon asked for, even though it isn't the answer she expected
- It backs the tighter discount target proposed for C5. More discount room may cost margin and still not win the tender
- The Project Plan risk "The evidence may show losses weren't mainly price" (R2) has now happened. Sharon needs to hear it from Adam at the walk-through, not find it on a tile
- New open question for Sharon: "The debriefs point to service and support. Do you want a service measure under Big tender win rate (K4) in the next release?" I wouldn't add one without her. She raised no service objective, and that's her call to make
Before and After (proposed Business Requirements v1.1)
| # | Item | Before | After |
|---|---|---|---|
| 1 | Gross margin per cent (K1), filters and conditions | "Shipped lines only; financial year January to December; must reconcile to finance's 41 per cent before use" | "Shipped lines only; financial year January to December; must reconcile to finance's 41 per cent before use. Until finance supplies cost of sales, the tile shows 'Waiting for cost of sales from finance' and the stated 41 per cent as a Working Hypothesis, with no status colour" |
| 2 | Big tender win rate (K4), how measured | "Tenders won divided by tenders decided (won plus lost), over five million dollars, rolling" | "Tenders won out of the last 5 decided tenders with a contract value of $5m or more (rolling five-tender window), shown as a count (for example '2 of 5'), with the calendar-year count alongside" |
| 3 | Big tender win rate (K4), target | "To be set by the bid manager (Q-1)" | "To be set by the bid manager as a count out of the last 5 big tenders (Q-1). Gary's starting proposal for Deb: at least 3 of the last 5 by Dec-27, which means winning the next 2 big tenders. Working Hypothesis. Thresholds follow the count Deb sets" |
| 4 | Monthly reports that match the agreed set of numbers (K5), how measured | "Reports that use the agreed sales definition and customer grouping, divided by all monthly reports" | "Reports that carry a sales number and whose net sales for the month check against the agreed set of numbers (within a tolerance finance sets), divided by all reports that carry a sales number. Checked by the finance report owner each month. Reports that carry no sales number are listed but not counted" |
| 5 | Monthly reports that match the agreed set of numbers (K5), data source and fields | "monthly_reports_index.workbook, .owner, .sales_definition, .customer_grouping, .last_refreshed" | "The finance report owner's monthly check log (to be set up: report, month, report net sales, agreed net sales, pass or fail). Until it exists, monthly_reports_index.sales_definition and .customer_grouping are used as a labelled proxy (currently 3 of 30 on one candidate set)" |
| 6 | Average discount off list price on big deals (K2), target | "At or below the 2026 big-deal average (Kewpie to set the baseline). Working Hypothesis" | "Back down from 17.0 per cent towards the 2023 level of about 14 per cent on tender contract orders by Dec-27. Gary's proposal, for Sharon to confirm. Working Hypothesis. Read with Big tender win rate (K4) as the counter-metric" |
| 7 | Average discount off list price on big deals (K2), thresholds | "Green at or below the 2026 average; Amber up to 1 percentage point above; Red more than 1 percentage point above" | "Green at or below a straight-line path from 17.0 per cent (Sep-26) to 14 per cent (Dec-27); Amber up to 1 point above the path; Red more than 1 point above. Gary's proposal" |
| 8 | Revenue growth on the year (K3), target rationale | "Global's target for 2027. Base (2026 actuals?) to confirm (Q-2)" | "Global's target for 2027, measured against 2026 full-year actuals on ship date until finance confirms the base (Q-2). Note: 2026 is tracking -6.8 per cent, so 4 per cent on 2026 still leaves 2027 about 3 per cent below 2025" |
| 9 | Our price against the winning price on lost tenders (K4.1), filters and conditions | "Lost tenders with a known winning price; text values like $2.12m converted to dollars; same tender size filter as K4, with all sizes shown for context" | "Lost tenders with a known winning price; values converted to contract totals. Where the winning price is missing, show the price score gap from the buyer's scoring, labelled 'price score, not price'. Same tender size filter as Big tender win rate (K4), with all sizes shown for context" |
| 10 | Backlog: Service and field measures, reason | "Systems named, but no objective or action raised in the interview" | "Systems named, but no objective or action raised in the interview. The debrief analysis shows service and support was the biggest scoring gap on all three big losses: ask Sharon whether to add a service measure under Big tender win rate (K4) in the next release" |
| 11 | Revenue growth by rep (K3.2), filters and conditions | "As K3. Customer grouping by parent where known (customers.parent_id), to match the agreed definition" | "As Revenue growth on the year (K3). Rep credited from the order line (rep_id). How reps should be credited for account ownership is an open question for Sharon" |
New or updated open questions
- For the bid manager (Deb Harlow): What count out of the last 5 big tenders is a realistic target? Can you add winning prices from the debrief letters, starting with Western Plains?
- For finance (Tom Nguyen): Where does cost of sales come from? What is the agreed sales definition and customer grouping? Which reports carry a sales number? What tolerance counts as a match?
- For Sharon: Is the tighter discount target right (back towards about 14 per cent)? Is the 4 per cent on 2026 actuals? How should reps be credited? Do you want a service measure, given what the debriefs show?