What is business development?

I’ve heard and read many definitions with respect to Business Development (BD), which typically infer some form of functional role between Sales and Marketing. This, in my opinion, is far too narrow a view. So, if Business Development doesn’t mean Sales or Marketing, then what does it mean? 

For me, put simply, Business Development is the act of developing a business. As such, this can mean many things to many businesses, such as improved share price, a step change in revenues, enhanced profit margin, increased brand awareness, new market entry, improved service capability, optimized product design, enhanced customer experience, etc. The list goes on.

In essence, Business Development is about shaping and delivering REAL VALUE for your business, taking leadership's strategic vision, and then helping turn that vision into reality. The value is then achieved through the development and implementation of appropriate business strategies, which culminate in the delivery of objectives against agreed business improvement plans.

By properly understanding this critical role, together with the requisite skills and experience for it to be successful, businesses can build improved organizational accountability and responsibility to shape and deliver real business value.

So, if accepting the premise above, it should be clear that the Business Development function needs to have more responsibility than purely sales related metrics; which is where circa 90% of most company's Business Development function resides. So why is this the case? 

Square peg round hole

Over the last decade, the sales professional role has been perceived poorly by some executives in the marketplace, due to low value connotations of feature-benefit sales activities; instead looking for more strategic minded professionals who can help resolve client's business issues through a consultative sales approach.

This perception has led to the erosion of the highly skilled sales professional role, and the subsequent growth of the Business Development professional. These individuals typically have capability to operate across a spectrum of skills including strategy, marketing and sales; however, most companies restrict them to a Sales function only. 

This has led to frustration from many in the BD community, complaining of an in-ability to deliver growth due to the lack of broader engagement in setting the business up for success, be that by helping the company to improve brand awareness, optimizing product design, implementing cost saving initiatives or enhancing customer experience.

And therein lies the problem, by eroding the importance of the Sales professional and not understanding the role of the Business Development professional, many companies are putting square pegs in round holes, asking strategic minded individuals to become hunters in the marketplace, and losing the necessary single minded sales skill-set. Some individuals can maybe handle the dual role, some organizations actually do need a mixture of the two (although this is typically due to a poorly defined product of service), but most companies don't understand this difference and ultimately they fail to maximize the value from these two different roles.

It should be noted that organizations differ in size and complexity; and overhead cost restrictions typically define how many functions a business can afford to invest in. However, to maximize the effectiveness of the BD function, this role should be viewed as a strategic one that links the board to the business, proving accountability to deliver company wide business objectives.

By having more focused roles and responsibilities for business development, marketing and sales professionals; you can truly leverage you organization to transform the effectiveness of your business strategy and truly deliver REAL VALUE to your business.