Expectations are often created that can't be achieved. "Expectations become reality" and when they are not met contribute to disappointments and even failure.
"Give me the money and the people and I will create a new business, develop new revenue streams, increase our earnings and balance our business portfolio". These promises are made because those leading the business development, acquisition and merger or venturing activities are committed and missionaries. They believe and they want everyone else to believe, so they sell. They are not lying or trying to decisive, but only trying to get the chance to prove they are right.
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So what can be done? Successful companies must continue to seek out new opportunities or they will ultimate wither and die, so they need to have individuals who are willing to bet their careers on creating or adding something new. The answer is to increase the probability of success by instilling more discipline and objectivity to the process.
It starts by knowing when and what type of business development is needed. This involves clearly specifying what is expected and when it is needed. There are many reasons to develop new businesses. One is to grow revenues more rapidly? A second is to improve the "bottom line", another is to reduce dependence on one or two key markets or industries. Further there is also the chance to be opportunistic and seize the chance to participate in a new exciting business.
All of these require a continuing and systematic surveillance and monitoring system that extends the vision and analyses beyond the current and obvious definition of the business.
The best place to start is with current customers to determine if there are other ways you can serve them. This involves understanding their needs, expectations and levels of satisfaction. We call this "customer first". In addition, new opportunities may be found by looking backward, at your supply line, forward at the sales and distribution channels and up and down at other products and services that your customers use. The key is to find ways of being different and offering either better, lower cost, more convenient ways of doing business. We will provide a number of ways of doing this type assessments, including "business development maps".
But there are many ways of participating in these new opportunity areas. We will probe into start-ups, internal venturing, acquisitions, mergers, partnerships and combinations. Each have their unique advantages and disadvantages and they must be carefully evaluated.
As we said earlier it is very common to find that those responsible for business development become strong advocates, aggressive sales people and even missionaries. They believe and they often underestimate the need to challenge their ideas and recommendations. It is critical that all business development projects be placed under the microscope to uncover both the positive and negatives. This requires understanding if the ventures or acquisition will be profitable and yield the desired results. Further it is critical to clearly understand what it will take to win and be successful and to know how far the organization, even with additions and modifications, is from the levels required to win. This is the responsibility of all of the major stakeholders and not just to those proposing the new development.
Finally it is the execution and implementation that will really determine success. But this requires a clear understanding of the type of leadership and people required, as well as the organization, rewards and measures. The final step is to establish the game plan and then continually monitor performance. All business development projects need a special monitoring and surveillance system to assure that they are on course and to determine if and when they are responding to changes, need modifications or should even be aborted. In short, business development requires all of the same elements of sound and successful leadership and management, but even more so.
