In today’s fierce competitive business environment, how do you answer the challenge of not only finding creative new ways to grow your business, but also to crush the competition? Most companies’ efforts to bring about growth leave a lot of opportunity on the table because their corporate strategy and growth process is driven by their sales executives or by their products. As a result, their efforts often fall short because they are missing the key element—business development mindset and culture.
One effective strategy that savvy companies are using is to partner with leading formidable companies through business development strategies. The business development (BD) mindset and culture focuses on changing the strategic landscape by giving companies an advantage over the competition. BD is essential to any company’s growth and success and should be a core strategy for any entrepreneurial venture.
BD is about strategic deals that support the sales initiative and its efforts, but is not usually measurable until well after the partnerships have been implemented. The mindset that BD fosters is one of working on the company’s long term vision and growth, which in turn, accelerates today’s and tomorrow’s sales. Think of it as a platform or springboard to aligning yourself with a major market force, capability, or accelerator with the intent to generate revenue and grow market share. It’s a partnership that drives momentum and revenue growth and is, most important, a clear and present danger to your competition.
In BD, the business process is strategic, not transactional, and no money changes hands between partners. Your potential partners—which are typically industry heavyweights—may not have given any thought to the benefits your proposal can reap. There are no incentives for them to consummate a deal with your company. It’s even more likely that they will try to discourage any future contact—they prefer to compete solo. Making any headway at all in forging business relationships with your potential BD partners can take months, even years. And yet, when the relationships are formalized and collaboration begins, the rewards are often pivotal for all the partnered companies.
To be successful in the BD process, you must understand the difference between sales and BD.
- Think strategy. BD is strategic and sales is more transaction oriented. Sales is not strategic. With sales you focus on the revenue, but with BD you change the competitive landscape of the market. Sales people and BD people are very different, so change your mindset and culture to treat them, and the initiatives, differently—but your company needs both. Use the two functions in combination to achieve even faster growth.
- Compensate accordingly. Culturally, compensation must be different. A BD culture is not focused on people attaining quarterly sales commission. BD is focused on long-term results. Measuring the results doesn’t necessarily occur in the current year, but rather is realized in the next year and in years after that. In BD, the focus is on long-term strategic thinking; thus, BD accelerates sales and revenue growth.
- Focus on building relationships. BD focuses on relationship management with the partner companies. All partnered companies join forces to build a greater opportunity. The focus is on how they—together—can tackle a market need. Align the team with building those relationships. You are not a vendor but a partner. Remember, there is no money exchange between the companies when the deal is signed. Your team’s role is to secure and then develop deep partnerships. Those assigned to the partner once a contract is in place are not Account Managers, but Partner Development Managers (PDMs), with an emphasis on development.
- Stimulate sales, marketing and product departments to buy into the vision of BD. Resources may not always drive ROI but as a whole, the company is propelled into a growth path unachievable without BD. If they don’t buy in, then either the company is not ready for BD, they are the wrong people, or they are the wrong people evangelizing the opportunity.
- Maintain a mindset of what the BD process is building. It is building the primary revenue engine for next year. Though it helps with today’s priorities, the real value of the BD effort is in future growth and tomorrow’s ROI. It is hard to measure in the first year because it’s not a transaction. The two parties leverage each other to accelerate the growth potential, but it takes time.
BD deals successfully implemented will change the business landscape and will impact the bottom line next year, as the real growth will come in years two and three. BD is a growth catapult and your company’s valuation can double or triple with a successful BD deal. A single sales contract rarely has the same impact, which is why BD deals are a win-win for all partnered companies.