Why do we talk about “new” business development?
Executive Education / 29 July 2020
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Dr. Götz Volkenandt ist Eigentümer der Kompass Projektpartner GmbH in Berlin. Er ist Vordenker und Experte für Unternehmensentwicklung, Strategie und künstliche Intelligenz, hat Lehraufträge zu Strategischem Management und berät und begleitet Unternehmen und Führungskräfte in strategischen, konzeptionellen und projektorientierten Fragestellungen. Er ist Autor einschlägiger Publikationen, die Führungs- und Entscheidungskultur im Unternehmen zu verändern.

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Business development is currently the big issue in many industries. In addition to the familiar challenges (low interest rates, electric mobility, digitisation), the Sars-CoV-2 (COVID-19) outbreak is adding further anxieties to the mix, about credit default risks or changes in customer behaviour during and after the pandemic.

Experts believe that we’re standing on the threshold of another great wave of digitisation. The crisis is forcing many companies to make far-reaching decisions at very short notice on, for example, the processing and financial oversight of sales, or on product ranges, or staffing. But there is also a need for decisions on longer-term needs, all of which are based on factors or information that are inherently uncertain:

  • How should we position ourselves digitally?
  • Is an in-person sales channel better than a digital one?
  • How will we earn customer loyalty in the future?
  • Where will the innovations our customers quite rightly expect from us come from?
  • Which new business models are relevant to us?
  • How to we meet our employees’ expectations?
  • How do we retain our best employees?
  • How do we turn our managers into a competitive advantage?

Business development as a strategic positioning tool

“Business development” addresses these questions and creates a suitable cognitive structure for practical procedures and applied methodology. The range of remits in this discipline has always ranged from short-term operational tweaks right through to long-term strategic positioning. When dealing with operational, sales-related issues, it swiftly becomes obvious that there is a smooth continuum between these two extremes. This is because short-term (operational) decisions can impact a company’s positioning – as companies that have been quick to advertise discounts at the end of a quarter but abruptly dropped them the following month have discovered to their cost.

Even so, “traditional” expertise is no longer sufficient. Future developments are fraught with uncertainty, meaning that volatility is also on the rise – with all-too-familiar consequences for corporate cost structures. At the same time, digitisation is gaining momentum, which, in a world with global supply chains, nobody can afford to ignore. Google, Apple, Facebook, Amazon and other “digital enterprises” are drilling deep into value-creation processes across multiple sectors. For a long time now, it has been unclear whether bank customers actually “belong” to their nominal banks, because if they use Apple Pay or Google Pay, the real issue is whether customers are loyal to one of these two platforms, as opposed to the financial-services providers supplying the underlying banking services. Meanwhile, one of the automotive industry’s main obsessions is establishing who the current market leader in “autonomous driving” might be, and how they might exploit their position. These are just a few of the many examples and harbingers of the profound changes currently transforming corporate reality, hinting at just how far-reaching this transformation will be. These changes are placing huge pressure on business managers and entire enterprises, making the task of business development very much more demanding.

This is why we now talk about “new” business development – because these new challenges demand suitable answers. While well-established principles have not lost their validity, digital business models require new ways of thinking, especially in companies with business models that are not – or are only partially – digitised.

New business development embraces changing business needs

“Business Development Manager” is not a protected job title. The way it is used (in, for example, recruitment ads) clearly shows that, for very good reasons, the job specifications for this role are becoming steadily more complex and that the role itself covers a much broader remit than is generally realised. Thus most managers and executives are expected to act as business development managers at least part of the time. After all, within their specific spheres of responsibility, any of them could do something that would benefit one or more areas of business activity. Any of them could contribute ideas from their own areas of expertise. And all of them are required to deal with decisions in rapidly changing, volatile and uncertain circumstances. This is especially true of senior managers and executive board members, as well as heads of division. But all managers and executives are having to confront the need for new skills and competencies.

Business development describes the structured, systematic development of an existing or new area of business activity. At the conceptual stage, we explore the market and resource aspects with an eye to further analysis and future developments; it is vital to tackle these aspects at this stage and no later. For example, convictions surrounding electric vehicles (as reflected in e.g. buyers’ behaviour) combined with external influences (e.g. government decisions on buyers’ premiums) result in a complex set of conditions that is not easy to resolve. The significance of decisions based on uncertainties escalates dramatically. This makes it all the more important to learn how to deal with them. But in any case, future developments and high-risk decisions are just two examples of the shifting requirements underlying “new business development”.

This is why the importance of building competencies in the specialist area of Business Development Management cannot be overestimated – for all managers and executives!