Business development on the bottom line
By Hans Eibe
Business development goes to the bottom line because the company gets better at planning and implementing growth opportunities. Here follows a brief explanation of the critical tasks and processes that facilitate that process.
Planning and implementation
It’s one thing to have a plan for a growth opportunity. It is quite another to have it successfully implemented. I think there are many of us who, in terms of experience, must acknowledge General and President Dwight D. Eisenhover’s observation that ” a plan is nothing, planning is everything “.
Of course, it costs money to plan and it poses both demands and critical questions for the company’s self-understanding and management. Therefore, good and relevant planning is often considered difficult and is easily skipped.
The blind spots in focus
Business development and business developers continuously focus on reducing blind spots in business plans. These arise from market dynamics and the many moving parts in development stages, technology, organization, own competences, suppliers, sales and marketing channels, etc. The critical thing is that the individual parts and the whole are integrated and coordinated in a timely manner – and if necessary, that the growth opportunity is discontinued.
The classic challenges we face are e.g.
- The company’s technical, market-oriented and organizational functions each live in their own silo.
- Those who plan are not – or only minimally – involved in the implementation phase and operations.
- Professional specialists are used to deal with other professional areas than their own.
- You do not include increased coordination and integration costs plus lost time and earnings, bad customer experiences, etc. on the market due to poor planning.
- You make plans because ‘you have to’ and not because it is a decision-making and management tool.
- Ideas go from the head directly to implementation without reflection on technology, organization and the market is ready or well timed.
- There is often no overall structure and process for business development that can be learned and optimized from until the next opportunity.
Competences must be experienced and developed
The business competence, or more precisely the Dynamic Business Development Capability , is not something that comes by itself. As described on About Business Development, it requires special processes and tasks, an understanding of the many aspects of the growth opportunity and special experience on the part of the business developer. Not everyone qualifies as a good business developer, sorry. Some focus points are
- To have practical knowledge of the company’s technology, product, customer values and industry dynamics
- To be able to think conceptually and abstractly and not just “close deals”
- Having knowledge from several business functions
- Having experience in both top management and line functions.
Sharp and robust
The effect of business development on the bottom line is therefore due to sharper decision-making foundations and management tools that
- increases the quality of planning, including
- faster scrapping of unprofitable projects
- acceleration of too slow progress
- damping of too fast progress (when the quality does not follow)
- bringing back discontinued projects that have been given a new ‘ window of opportunity ‘
- If the growth option is implemented
- ensures better handover and support in the implementation phase
- minimize coordination and integration costs
- faster scrapping of unprofitable projects (again)
- minimizes bad customer experiences, lost time and earnings on the market.
At the same time, the company can effectively keep several growth opportunities in several development stages in the pipeline. This makes companies more robust in relation to the fact that the profitability of the individual growth oppoortunities does not materialize (if any of the readers have experienced that). Secondly, the company is in a stronger position when competitors expectedly launch new products and services that takes away our profits.
Thus, an effective competence in business development can be a source of competitive advantage because it is Valuable and Difficult to Copy. We have empirical documentation for this.
Hans Eibe is the founder of EIBE CONSULTING. He is a business developer and entrepreneur with experience in biotech/diagnostics, consumer genetics, food/confectionery and health services. In addition, he has, among other things, has been associated with Copenhagen Business School and the University of Southern Denmark as a researcher and teacher.
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