Business Development Manager

While still touching virgin ground, a recurrent problem for many business developers is to define and delimitate their roles and responsibilities. We have heard many business developers complain about the fact that they are drowning in non-strategic fire fighting or have become problem solvers for the CEO – in effect operating as an advanced corporate secretariat.

This happens because many businesses fail to properly define an organisational context for the business development function. Even the most talented, experienced and self-motivated employees have a need for well-defined tasks, roles and responsibilities as well as a suitable organising logic and governance structure to be able to deliver what is expected.

"Even the most talented, experienced and selfmotivated employees have a need for welldefined tasks, roles and responsibilities as well as a suitable organising logic and governance structure to be able to deliver what is expected"

In essence, what is happening in many companies investing in business development is that they have not asked themselves: "if business development is the answer, what is the question?" Or alternatively: "is there a need for a business development function in our company?" And if yes; "what type of tasks would we like to perform?"

When business developers are organised within a non-existing logic with no clear mandate or license to operate and with little guiding purpose from top management, both small and large scale business development units fail. They do not fail to deliver on promise, because no promise has been made. They do not fail to deliver impact in the organisation, because the organisation may not be aware of their existence. And they do not fail to engage in coordinating the strategy planning process, because top management never saw it as one of the real values of investing in business development.

They fail because they wear out and become disoriented. They fail because they deteriorate and lose their meaning. They fail because they are not managed.

In this chapter, we will look at what it takes to manage business development in different organisations. Specifically, we will look at

A. The roles and responsibilities of business development – because business development means different things to different organisations
B. The organising logic of business development – because business development functions are designed to purpose
C. The professional competences and people skills needed – because no single person possesses all qualifications needed to succeed
D. The performance measurement of business development – because business development is under pressure to document results

The role and responsibility of business development 

The first and most important element in managing business development is to define what the unit is to be responsible for and the role it should play within the organisation. Clarifying responsibilities and roles will help adjust and align expectations while making it possible to hold the unit accountable and measure its performance.

The responsibility of business development 

In many companies, business development units are not held accountable for anything. Far too often, business development units operate according to a loosely defined list of ad hoc tasks such as trend spotting, competitor surveillance, market analyses and business case work, which other people in the organisation are accountable for delivering.

Through our research, we have found that business development typically fulfil either one or a combination of the areas of responsibility outlined in the figure on the right, depending on the strategic priorities of the company.

Some business development functions are strongly biased towards identifying new business in new territories (quadrant 1) and have a high degree of orientation towards the market. The role they play is to pick up on new business ideas either in the market place or from within the organisation. They analyse these and incorporate them into the strategy management process.

Other business development functions are more biased towards working with evaluating investments or divestments to improve the overall portfolio of business activities (quadrant 2). Their work typically focuses on improving existing market positions and improving the company's competitiveness and market share within already-defined businesses.

"Business developers must think, not act, like the CEO" 

Another grouping of business development functions is predominantly biased  towards improving existing business performance from within (quadrants 3 and 4).  They are typically engaged with evaluating the potentials of new business models  or analysing and delivering the needed process improvements and organisational  changes to lift performance and margins in existing business activities.

The role of business development 

"Business developers must think, not act, like the CEO." This short but precise statement was the key message from Niels B. Christiansen, CEO of Danfoss, at a lecture on business development management. The message is important. Not because it is stated by a highly successful former business development manager that has now turned CEO, but because it entails the essence of the role that business development should play in modern organisations.

A CEO acts on behalf of the organisation and is able to effectively define new strategic objectives, formulate supporting strategies, translate these into their operational consequences and oversee their execution.

A good business development unit does the exact same thing: applies analytical rigour, speed of mind and powerful execution and brings about the evidence and missing links that effectively bridge the gap between strategy and execution. Similarly, the business development unit acts as a catalyst for surfacing new strategic options for the company and presents these facts and opportunities with a short reporting route to top management.

As such, the business development unit will in effect act as an idea centre for new business initiatives that percolate up through the organisation. Just as the CEO often does but rarely has the time and resources to further investigate, qualify and respond to.

The roles that business development units play in an organisation in relation to the tasks they carry out typically fall within one or more of the following types

o Role 1: The "strategist" – acting as the Office of Business Analysis.
o Role 2: The "executor" – acting as the Office of Strategy Implementation.
o Role 3: The "facilitator" – acting as the Office of Strategy Management.

Having depicted the possible areas of responsibility and roles within the organisation that a business development unit may play, an important recognition must be noted: business development means different things to different organisations.

Below are just a few examples of the differences in today's business development practices which underline the important point that business development is and should be designed to meet its purpose.

At FIH Erhvervsbank, the department labelled Strategic Business Development has been tasked with managing the transformation from a mono-line to a multi-service B2B bank, starting with strategy formulation, business model design and delivering defined strategic initiatives.

At Arla Foods, Business Development plays the role of in-house consultants participating alongside external consultants as analytical and facilitation resources defining and leading strategic transformation projects.

At Novo Nordisk, Strategic Business Development is concerned purely with M&A activities on the corporate level, whereas a separate entity called Business Development & Patents is engaged with in-licensing activities and smallscale biopharma acquisitions in the Novo Nordisk Biotech Fund.

At Danske Bank, Corporate Business Development – a grouping of more that 50 business developers – is predominantly engaged with concept definition and implementation as well as post-merger integration work and migration of IT platforms which tend to drive innovation in banking.

Finally, at DONG Energy, Business Development works in effect as the CEO's chief of staff taking lead on all activities related to M&A, Corporate Finance and Strategy – their results are very visible in public: the making of DONG Energy.

Evidently, these examples show great diversity of the role that business development plays in different companies and the different kinds of roles that business development units can play.

CASE   How a global high-tech company managed through their strategic transformation using strategic business development as a key lever

When a global high-tech player wanted to accelerate growth and earnings in one of their three business divisions showing promising global market conditions, business development was tasked with analysing options, defining strategies and engaging senior management and key subsidiary stakeholders to buy into the plans.

Having conducted a variety of market analyses focused on understanding future customer requirements, the dynamics of the competitive landscape and defined evidence to support the market growth pockets, business development formulated a comprehensive five-year growth programme including significant strategic investments in new product innovations, acquisitions and a complete rethinking of the global supply chain operation. The programme was defined in close collaboration with executive management and presented to the board by the CEO and hence approved.

The role of business development in the initial phases of constructing the plan was to 

• Conduct market analysis
• Verify potentials and define windows of opportunity
• Complete high-level due diligence on acquisition targets
• Develop detailed plans with relevant parties in the organisation
• Engage in dialogue with management and board

The output from business development was 

• Market size, growth and channel definition
• Qualified list of acquisition candidates
• Go-to-market model for each priority country
• Revised organisation set-up
• New supply chain model
• Financial and investment cases
• Detailed phased plan of action

Having approved the five-year growth programme, senior management and business development agreed on which of the specific execution projects business development should lead and which projects and targets that should be anchored with the line organisation. It was agreed that business development should take charge of all M&A activities in the plan including taking lead on mission critical projects that needed an outside perspective on best practices and rethinking. The list ended up like this.

Business development should 

• Lead the acquisitions of five defined companies (in close liaison with the Finance Department)
• Build and implement a new divisionalised organisation (in close liaison with line organisation) 
• Redesign and implement a new supply chain model (with external consultants) 
• Execute the cost-of-sales reduction programme (with external consultants) 
• Orchestrate the overall execution of the programme

Other projects anchored with the different corporate and line organisation units 

• New ERP implementation (IT)
• Centralisation of R&D (R&D)
• Production to China (Production) 
• Relocation of physical warehouses (Supply Chain) 

In the period from 2003 to 2006, the company grew its sales by a compound annual growth rate of 125%, acquired four companies and increased its earnings significantly.

The case above is a great story about the role and responsibilities of successful business development at work. It also tells an important story about the necessity of defining a purpose, a role and a clear set of responsibilities for business development. In this case, the business development unit clearly liaised on an ongoing basis with senior management, the board and various organisational units to ensure effective execution. Notice also the distinction of tasks between business development and the line organisation, and notice how business development started as the analysers and architects of a growth programme and once approved went into execution mode by acting as leaders of specific change projects with overall responsibility for overseeing the totality of the programme.

Responsibilities and roles in a BDM context 

As it is evident from the above, business development is not a static discipline – its role is shifting as strategic priorities shift from analysis to architects to execution and back to analysis again. And obviously, a more mature business will have other and more disperse business development needs than a start-up company. Just as the diversified conglomerate with multiple business lines will have other and more complex business development needs than the less complex, mono-line SME.

But leaving aside the complexity and dynamics, we have built a model of four archetypical types of business development at work and linked these to the areas of responsibility typically fulfilled by business development

o The "Entrepreneur" – typically found in young (2-5 years) start-up companies
o The "Commercialiser" – typically found in high-growth-driven companies
o The "All-round strategist" – typically found in large, mature corporations
o The "Turnaround manager" – typically found in companies or SBUs where turnaround is needed

Guidelines for defining the role and areas of responsibility 

"Similarly, the larger and more mature company will need business development to be more biased towards the role of "Allround strategist" with enough capacity within the unit to fulfil all four areas of responsibility simultaneously" 

At the other end of the spectrum we find the "Turnaround manager"  where either the company or individual business units are under  commercial and financial pressure. Here, the business development  effort needs to be biased towards analysing the severity of the crisis, re-establish a profitable portfolio and define new and smarter ways of working. Typically, business development will play the role as being supportive of the turnaround in the form of providing fresh strategic insight, analytical power and strong execution abilities to rethink the business model, design the financial restructuring (if needed), identify the opportunities for divestment, off-shore or improve existing business activities.

As such, a business development unit may take on different roles at the same time, and it may change role from time to time.

When defining, or redefining, the areas of responsibility and role within the organisation, the following checkpoints are useful to keep in mind

• Is the role of the unit clear and communicated to its stakeholders?
• Is the area of responsibility clearly defined and delimitated?
• Are roles and responsibilities aligned with the overall strategy of the organisation?

To truly become a managed and integrated business development unit, management and business developers must spend the adequate time and resources on defining the overriding purpose, role and areas of responsibility of business development. In other words, an answer to the question: "what should be the contribution from business development in one year, three years and five years time?' is a good place to start.

All evidence supports that this is a vital starting point for any business development unit struggling to find its foothold in the organisation, and it is an excellent way for management to make the most of their investment in business development.