What is Business Development?
Business Development means activities and processes aimed at improving business operations. Business development should create a more sustainable and profitable business. The work often takes place in the context of renewal or change.
To succeed in Business Development, you need a good business idea, a business plan and the ability to see it through. Business Development should be carried out in relation to the company's strategy, vision and goals, which means you need to keep the company's long-term plan and what the company has decided to achieve in mind.
Everyone develops their business in a way that suits their own organisation. But what they all have in common is that the goal is always about streamlining business operations and/or creating new business opportunities. This does not always mean generating new revenue streams but can rather be about adjustments and listening to the customer and the market.
For example, the market may demand sustainability practices (ESG for example) and customers may want a more automated shopping experience. In these cases, Business Development is more likely to lead to a stronger brand, increased customer satisfaction and higher loyalty.
Business Development in Practice
The key to successful Business Development is to identify and develop areas for improvement and then to create partnerships internally and externally to drive the necessary changes.
The big questions in your analysis should therefore be:
What Does Your Company Need to Improve within Your Business?
Ensure that the analysis includes the perspective of many departments and that insights are based on data as much as possible.
Why Does it Need to be Improved?
Being able to justify a change is a prerequisite for pushing it through. Find a clear "why?".
What Improvements Can be Made?
Even if a change can be implemented, there may be too many barriers to success. Going beyond your business idea or strategy may not be an option. But it may also be the strategy that needs to change.
How Should Improvements be Implemented?
That something should be done is not the same as how it should be implemented. Who will do what and when? What do you need to succeed?
What and How will Business Development be Measured?
How is the work measured, monitored and controlled? How will you know that the goal has been achieved? How do you determine the target?
Business Development and 7 Principles for Achieving High Growth
Ultimately, Business Development is about creating value for the customer and thus generating growth. Since it often involves changes in several processes and projects, it is important to systematise the work.
According to McKinsey, 84 percent of CEOs surveyed believe that innovation is critical to growth, but only 6 percent are satisfied with their company's innovation performance.
McKinsey states that there are seven "proven" core principles for successful change that generates growth:
1. Build Capacity First
Having staff who are data-driven and experienced in making the necessary analyses and adjustments is now a prerequisite for achieving your Business Development goals. It's about having capacity and the ability to implement change. Creativity, analysis and purpose are important in your growth capacity building, according to McKinsey.
2. Look Beyond Myths and Preconceptions
Don't go into Business Development with preconceived and predetermined ideas. Instead, look at business and growth with fresh eyes and an open mind. For example, it is better to invest in growth when the economy is down, according to McKinsey research.
Other popular growth myths are that Business Development is expensive and uncontrollable, that it happens by itself, through luck, trends or changes in the market.
3. Restart and Think Ahead
Dwelling on last year's costs and setting targets as you usually do won't give your business the transformation it needs. Think of it as turning the page and that the new page is blank. This approach, according to McKinsey, results in 40 percent higher goal achievement.
Set high-performance targets for different revenue streams, scale what high-performing units do, be curious, explore digital tools that can open up more ambitious targets, don't blame external factors and challenge norms.
4. Drive Growth from Multiple Directions - and in Multiple Ways
It pays to view innovation, growth initiatives, Change Management and Business Development as different endeavours. Those who are most successful in optimising commercial functions and operations use multiple approaches.
You are unlikely to find an idea that is a blockbuster. Search with the ambition to find many problems to solve, things to simplify, improve and streamline. Take time to look outside the organisation. Who is doing what you do well? What solutions are they using? And why?
5. Create a Constant Business Development Flow
Create a balance between growth initiatives. Quick and long-term growth projects should be mixed, continuously reprioritised and measured. Showcase when an investment is going well to reinforce the project or process "why". Here, quick value-creating projects can provide more willingness to change, and an increased budget.
6. Be Thorough
Effective and thorough implementation is a prerequisite for success. According to McKinsey, only 37 percent of executives surveyed said that the growth projects they were involved in were successful.
Ideas and goals should become plans with detailed forecasts that include KPIs and milestones. Scheduled follow-up should lead to cross-functional decisions and adjustments. Communicate with employees about needs, responsibilities, progress, support and what needs to be done.
7. Use KPIs when Making Decisions
Continuous measurement allows you to identify what is working and what is not. Make decisions based on how well goals are reached. It may sound easy, but it's about bringing in more parameters within the framework of the business and the venture itself. Having interconnected and forward-looking systems that can manage risk makes the job easier.
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