A Brief Introduction to Business Development
It may come as a surprise that despite ‘Business Development’ frequent occurrence in practice (say 97,000,000,000 Google hits) there is very little systematic knowledge on Business Development’s unique features (less than 15 research papers).
EIBE MGMT is leading in Business Development consultancy based on research.
See our library below.
Business Development defined
Business Development is defined as
- the tasks and processes concerning analytical preparation of potential growth opportunities,
- the support and monitoring of the implementation of growth opportunities,
- but does not include decisions and execution of growth opportunities or their actual implementation.
In more layman terms we focus on preparing, screening and prioritizing growth opportunities on behalf of decision-makers. If the growth opportunity is favorable assessed to be implemented, we support and monitor its progress on behalf of senior management.
In small and medium sized organizations these tasks and processes are typically not as clearly demarcated, but there are gains from understanding their unique contributions to the growth and development of the organization – and the wealth creation of its owners.
Which Growth is for Business Development
It is the context of the growth opportunities that is a good indicator of Business Development should engage with them.
Relevant growth opportunities are
- Non-trivial (they should impose substantial challenges to the organization, such as novel market or customer preferences, new technologies or new organizational tasks and processes)
- Non-strategic (they should ideally be with in the constraints of the firm’s strategic momentum and corporate strategy)
Otherwise we will leave the tasks for the Line Officers (1) or the Strategy Development function (2).
The Business Developer
The good business developer is a rare breed because they are characterized by:
- Having practical knowledgeable about the firm’s technology, product, customer values, and industry dynamics,
- Being capable to think conceptually and abstract and not just “closing deals”,
- Having specialists knowledge from multiple business functions, and
- Having experience with both senior management and with working in line-functions.
Business developers are what we call integrating generalist and not ‘just’ a generalist or a specialist.
Think of it this way: Who is better at preparing a realistic business plan for a growth opportunity (assuring integration between the market, organization, technology, and finance)
- A person specialized in marketing or sales
- A person specialized in engineering or natural science
- A person who is trained engineer and have worked 6 years in Marketing/ Sales
I leave it to you to find the right answer.
What is not Business Development
Only unique Business Development tasks and processes as welll as unique traits of the Business Developer is of interest to EIBE MGMT.
Let’s be clear; business development is not just that of ‘developing the business’. All organizational functions and activities should be directed of developing the business. Even the purchase of Post-Its.
Here’s the steady growing list on the misuse and / or misunderstandings we come across:
- Sales (is currently trendy to relabel Sales to Business Development in industry, but it is still Sales)
- Key account management
- Relationship marketing management
- Product development
- Technological development
- Market development
- Project development
- Project management (although many Business Developers end up here because they have the overview)
- Strategy development (they should be focusing on Corporate strategy and organizational boundaries)
- Advertising or promotions expenses (Chesbrough (HBR 2002) got that one)
Busines Development Library
Sørensen, Hans Eibe (in press). Making Planning Work: Insights from Business Development. International Journal of Entrepreneurship and Innovation Management.
Sørensen, Hans Eibe & Williamson, Tevor. (2016). Nu2U: Business Development in High-Growth Firms. SAGE Business Cases, SAGE Publishing.
Lorenzi, Valeria, and Sørensen, Hans Eibe (2014). Business Development Capability: Insights from the Biotechnology Industry. Symphonya. Emerging Issues in Management, 2, 1-16.
Sørensen, Hans Eibe (2015). Business Development. In Augier, M. & Teece, D. J.(Eds.) Palgrave’s Encyclopedia of Strategic Mangement. Palgrave Macmillan.
Sørensen, Hans Eibe. (2012). Business Development: a market-oriented perspective. John Wiley & Sons Ltd.
Selected key references
Kind, S., & Knyphausen-Aufseß, D. zu. (2007). What is “Business Development”? – The Case of Biotechnology. Schmalenbach Business Review, 59(2), 176–199.