Performance Measures For Business Developers
The lack of well-defined performance criteria causes many business development practitioners to operate blindfolded, never really knowing whether they are successful at what they do or not. Tracking the performance of business development units and setting up performance measures for them is necessary to mature business development as a discipline rather than operating it as a magic cure-all bullet."Tracking the performance of business development units and setting up performance measures for them is necessary to mature business development as a discipline rather than operating it as a magic cure-all bullet"
The tasks at hand are often diffuse and ad hoc, and they are rarely planned in advance. Therefore, setting up performance measures is a way of clarifying goals, documenting effect and aligning expectations – in particular important to enable long-term planning in the unpredictable and changeable operating environment of today's business development units.However, defining universal performance measures and report metrics that are viable for all business development units is an impossible mission due to the diversity of business development practices. Again, the analogy from the discipline of HR and HRM may serve as a point of departure. As HR has matured and become an integrated organisational discipline, a framework for measuring the value and performance of a successful HR function has been derived. This framework measures the management's and the organisation's overall satisfaction level with the work performed by the HR function as well as a range of specific and directly measurable metrics.
To work effectively, performance measures for business development must allow for
o Clear accountability for the team and their individual contributions.
o Measurable business impact through consistent project evaluations.
o Consistent and demanding standards for each job role fulfilled.
o Procedures for communicating and rewarding the right results.
Performance measures in a BDM context
With the roles as strategists, executors and facilitators come different kinds of requirements, and these requirements may be translated into different kinds of performance measures.
In the figure below, you will find an inspirational list of key success factors and examples of KPIs for each of the three roles played by business developers (strategist, executor and facilitator).
A systematic approach to measuring the effort of business development units is something that is rarely seen in practice. Some units may have some metrics that they use for their work, but these are often randomly defined from project to project and not formally integrated in the processes within the unit.
"To ensure performance over time, that the unit remains proactive and that the learnings are picked up and reacted upon, performance measures must be an integral part of the work of the unit"
Whereas this may work for a limited period of time and when projects are somewhat similar, it is not sustainable. To ensure performance over time, that the unit remains proactive and that the learnings are picked up and reacted upon, performance measures must be an integral part of the work of the unit.
• Facilitate and challenge the long-term planning efforts to turn these investments into profitable new business
Following these simple guidelines, the company was able to define a set of very precise performance metrics against which the success or failure of the business development investment could be measured, including
• Number of identified candidates within the three areas of focus
• Number of right companies at the negotiation table
• Number of new licensing activities completed
• Number of new patent rights acquired
• ROI of commercialised in-licensed activities
• Management assessment of quality and speed of execution
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