Business Development is a fuzzy term with many definitions and roles in enterprises. In practice the following activities prevail:
- Acquisition of large, strategic customers
- Development of strategies and initiatives to let the company grow by vertical and horizontal differentiation
Acquisition, the first role, is an important task for companies. But I simply don’t get why it needs to be called “Business Development” and not what it is: Sales. As if acquisition of large customers needs a fancy term.
So, while the first definition is rather a normal human ego-thing, the second role is a spawn of dark forces.
Typically, Business Development through differentiation will be put in place whenever companies recognize that there is no more progress to be expected with the approaches and the existing organization in place. Such companies are usually pretty successful, but nothing has happened for a while – let alone from customer perspective. There is no movement any longer. Sales is getting impatient, finance is getting extremely nervous. There is this one big question in the room: where should all that growth that is committed in the 3-5-year plan come from? Nevertheless, all employees are busy, there is a lot of activity. However, where the hack is the next BIG thing? If growth won’t be generated by the existing departments, then a Business Developer will surely fix it. Hence the name.
This is how Business Development is typically set up: The business developer …
- is a “high potential” who just graduated from university or used to work for a big consulting firm.
- is organized as staff position directly attached to the CEO or to another high function.
- receives ideas for growth directly from the management team and/or collects all existing ideas from the corresponding departments.
- evaluates these ideas (in some cases even together with the functional units) and prepares decision memos.
- hands over the selected ideas to the corresponding departments for implementation.
In other words: The business developer is most likely someone who processes the existing knowledge of the organization and sends the result back to it – without direct customer contact but lots of Power-Point. He administrates the existing knowledge to find the new big thing.
This sounds truly awkward: The reason for heaving a business developer in the first place is a structural, company-wide problem: The organization is doing well on an operational level, but is not capable to fulfill the growth expectations. Now a boiler for existing ideas is meant to be the rescue, someone who is crunching decision memos, which will be backfired at the teams for implementation once they are decided – the very same teams that failed before? While the company lacks the opposite of administration, what is added is yet more administration. This is not going to work, this is creating additional pressure into a malfunctioning organization. The result will be congestion and a negative spiral.
In this kind of environment, not the business needs to be developed, but something fundamentally different needs to be changed: The responsible teams should be put into a position where they can again understand the customer and the market, get sensors to that market and then create innovations next to executing the normal operations. The organization must learn what Steve Blank and Bob Dorf call customer development in their book “The Startup Owner’s Manual”, a structured approach to detect and test new business models.
It is worthwhile to anchor these capabilities deep into the organization, since innovation does only work as a continuous effort, as überproduct has shown in their post „Relentless, the only way that innovation will save you“.