How to develop a business development strategy: 8 key elements
In this article, the author shares an algorithm for implementing projects to develop business development strategies.
“The world gives way to those who know where they are going.”
Ralph Waldo Emerson
When developing a company’s development strategy, many questions arise, starting with the questions: “where do I start developing a strategy?”, “Will we be able to implement it, and what will it give us?”, and ending with the question “How do I develop a real development strategy?We tried it, but it doesn’t work!”.
Developing a development strategy is a really difficult task, and there are more questions than answers. Therefore, I will try to offer a General algorithm for solving this problem.
I’ll start with the main thing. When developing the author’s methodology, I assumed that:
A business is, first of all, a business that a person, group of people, or company is engaged in.
A business development strategy is a way to achieve a significant goal (strategic goal) in a big way.
The beginning of any business is always an Idea. Let’s call it a Plan. Any business should have a worthwhile idea. The key word is not only “design”, but also the word “worthwhile”.
Design is what an entrepreneur wants and can do — what they can do. Or what he wants to learn. Coaches conduct trainings, doctors treat, and consulting companies provide services.
A worthwhile plan is a plan that involves providing goods or services that are at least in demand on the market. As a maximum, the entrepreneur understands how to earn money by providing specific products or services.
If there is a worthwhile plan, then goals are formed. For example, become a high-class doctor, trainer, or the best consulting company in Russia.
Each company at the moment has the current state of its development, which it has come to in 2-3 or 15-20 years of work on the rank. For simplicity, let’s call it “State A”. Further development of the company is always (!) is associated with a new level of design and its achievement. Let’s call it the target “State B”. “State B” is nothing more than a new Strategic goal.
Stage 1: Preparation of input data for development strategy development
A business development strategy is a way to move a company from the current state to the next target state on a large scale. To develop a development strategy, you need to determine the target ” State B “and understand the current”State A”. Therefore, the first step is to create a target “State B”.
Step # 1.1: Creating a new target “State B” that we want to achieve.
It’s not that simple here. Therefore, I suggest using a few rules to generate the target “State B”, which I use myself.
Example. Let’s say Your company needs a development strategy. To do this, you need not only to answer the question: “What should the company become at a completely new quality level?”, but also “What should it become in terms of targets?”.
In my opinion, the key difference between strategic development and current (or” just”) business development is the presence / absence of a completely new quality level of the target state, which is described (digitized) by the target indicators.
Therefore, the target state of the company (strategic goal) should include at least two key components.
The first component is informative. This is the first key element of the author’s methodology. Any company that has been successfully operating on the market for many years also needs new ideas to develop. Therefore, the new goal must be based on a new refined Idea. Most often, this is due to expanding the product line or strengthening the existing one.
The strategic goal is formed according to the expectations, desires and interests of business owners. If they don’t want to trade metals, they won’t do it for the foreseeable future, even if it looks attractive. This is not a question of expediency. For business owners, it is appropriate that they are closer to today, and what their thoughts and thoughts are directed to: have a compact business or a very large one, be a leader in 2-3 services or provide a wide range of services, and constantly fight for new projects in a highly competitive environment.
If Your company provides one “locomotive” (main) Service-1, for example, ” development of sales Department…”, then your new meaningful target state may be the addition of a new Service-2 “Development…”. This will expand the range of your services and allow you to provide Customers with a more comprehensive service: Service-1 + Service-2.
As a result, Your company can get (and will get!) many more projects. Of course, if there is demand and the ability to provide high-quality services.
If the business development strategy is developed by an external business expert, then the generation of a new refined Idea, of course, falls “on his shoulders”, but, of course, it is formed in a dialogue with the Customer and agreed with him.
The second component is a description of the new target state (Strategic goal) according to the necessary indicators (digitization). It is best if the strategic goal is represented as a goal tree. In the future, this goal tree will be reached by all employees of the company. This is the second key element of the author’s methodology.
If Your company provides services and your main asset is people, then the list of targets that you will need to achieve as part of the strategy should include, for example: the list of services, including new ones (product line), the number of key specialists, the number of projects per year, other characteristic indicators for Your company, turnover, marginality, profit.
What is important is that there is no point in analyzing the current state of the company in depth until you understand what the company wants and what it will strive for. This is the third key element of the author’s methodology.
Thus, the result of Stage 1.1: a Strategic goal has been formed based on a new refined Idea and described by the necessary targets.
From the point of view of the widely known S. M. A. R. T. goal setting methodology, it is dramatically important that the strategic goal is significant or rather complex, but achievable.
Therefore, the second step is to understand whether this goal can be achieved. Setting large-scale and ambitious goals is usually not the biggest problem.
First, you need to analyze the current “State A” in depth. It should be noted that in the previous step 1.1. it is also necessary, but not in depth, but at a sufficient level to study the current state of the company.
Stage 1.2: in-Depth analysis of the current state of the company.
To generate the current “State A”, I also suggest using a few rules that I use myself. But first I’ll give you an example.
Example. Let’s say that your consulting company currently performs 80 projects a year, and Your team consists of 20 business consultants. You have a “locomotive” Service-1, defined turnover, marginality and profit. And you want the target turnover to become 2 times more. If there is a high demand and the market buys Your service well-1, then Your team should be at least larger. This is one development option. I think it is clear what tasks need to be solved. If the demand for Your Service-1 is low or the market volume is limited, then, for example, you need 1 new service that is comparable or complementary to the Service-1. This is the second development option. This example is simple, but the search for a new service is not a trivial task and is not just frequent, but constant.
Analysis of the current state of the company also has at least two key components.
The first component — ” State A “(capacity and potential of the company) should be described by approximately the same indicators that describe” State B ” (Strategic goal). Then we will understand what we have and what we want.
The second component is an analysis of the dynamics of 2-4 previous years of the company’s development, and its description. This is the fourth key element of the author’s methodology.
Why you need a the dynamics of development of the company? Because the current figures without taking into account the dynamics of the previous 2-3-4 years do not say much.
Example. Your company’s turnover in 2015 was, say, 20 million Euros. Is it too much or too little? This figure means nothing! Simply put, if in 2014 Your turnover was 40 million Euros, then this is not enough. If the turnover was 10 million Euros, then this is a lot. If competitors similar to Your company have several times less turnover, then there are a lot of them and Vice versa. Of course, we need to take into account the overall economic situation and a number of other parameters. But in real life, and not in theory, this approach allows you to make a fairly close assessment of the truth.
Accurate figures are not so important for developing a development strategy by an external business expert. The order of numbers, dynamics, market volume, and volumes of the nearest competitors are more important indicators.
Looking ahead, I want to say that the achievability of the strategic goal is certainly related to the current “State A”, since “State A”, to a certain extent, is the “reference point” (“ready, willing and able”, as well as the current capacity and potential of the company).
For example, a company with a turnover of 200 thousand Euros wants to achieve a turnover of 200 million Euros. Perhaps this is the right goal, but you need to understand how many States (“B”,” C”,” D”,…) the company must go through to grow and become a really large company. And when (in time) this goal can be achieved.
Thus, the result of Stage 1: the current and target state of the company are formed, digitized by the necessary indicators. This is the input data for developing the company’s development strategy.