The Three Stages of Business Development

I remember how excited I was when I first got my driver’s license.

I rushed to the Department of Motor Vehicles after 9th period calculus on my 17th birthday so I could finally get my New York State-issued pass to teenage independence. All I wanted to do was drive – it was so freeing and fun! But even back in the late 1990’s, gas was expensive and even a semi-decent high school job didn’t pay enough to get me very far. Soon enough I realized that I couldn’t afford to just joyride forever: I had to plan my route before I put foot to pedal.

I also remember how excited I was when I started out in business development – all I wanted to do was jump in the driver’s seat and start heading down the road to sales and partnerships. It was so freeing and fun!

However, even within a large company, I quickly came to realize that you can easily run out of gas when you start gunning it for sales and partnerships without having a map to your destination.

There is no DMV-issued license for business development, and many jump behind the wheel without having a clear vision of where they’re going or how to get there as they coast along in the deal-making process.

In my Grand Unified Theory of Business Development, I suggest that the destination for all business development endeavors is the creation of long-term value. What’s been missing all this time is the map.

So here it is. A way to navigate through the business development process in 3 stages – the Having Value stage, the Communicating Value stage, and the Delivering Value stage.

Three Phases of BD

The First Stage of Business Development: Having Value

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The first stop on the path to successful business development is the Having Value stage, where you stop, strategize, and plan your course.

Before we go out and attempt to convince others of the value we can create for them by buying our product or partnering with our company, we need to first determine do I actually have something of value?

In the Having Value stage, we take a moment to pause and reflect on some critical questions about our business:

  1. What kind of value does my business need?

  2. What assets and resources do I have that would create value for someone else?

  3. What are the right growth opportunities to prioritize for my business, and what path should I take to pursue them?

Understanding what are the most relevant growth opportunities for your business and what companies will find value in what you have to offer is a prerequisite to making sure you’re on the right trajectory. Only once you know what kind of value you can offer can you figure out who will care.

 

The Second Stage of Business Development: Communicating Value

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The second step on the path is the Communicating Value stage, where we focus our efforts on convincing others to buy our products or to get excited about the prospect of partnership. But motivating an individual to act, let alone an entire organization full of individuals, is a big challenge. We need to figure out who will care?

  1. Who will care about the the value you can offer them?

  2. Who will be personally motivated to advocate on your behalf and help usher you through the organization’s structure, culture, and bureaucratic roadblocks?

  3. Who will be positioned within the organization in such a way as to decide or influence the decision of which opportunities to pursue?

Answering those questions requires more than blindly seeking meetings with anyone who will listen. It requires establishing relationships, built on trust and integrity, that can provide insight into how an organization “thinks” and therefore how it will act upon your proposals.

The Communicating Value stage is where we find the alignment between the value created for individuals and the value created for an organization. Only once you find that value alignment can you actually move on to the easy part: hammering out the specific terms of a deal that will result in two parties that are ready and excited to move forward and deliver value.

The Third Stage of Business Development: Delivering Value

 

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To arrive in the final stage of the business development process, the Delivering Value stage, means that you have successfully sold others on the promise that your company can provide value.

But selling promises puts you in debt: in the Communicating Value stage, you’re mortgaging your company’s resources and reputation against your ability to actually follow-through and deliver something of value. In the Delivering Value stage, you pay back by successfully executing and creating value from customers, markets, and relationships. This stage begs the important questions:

  1. How can you ensure you execute sufficiently to have made the entire endeavor worthwhile?

  2. How will you manage to deliver value as priorities and circumstances change?

  3. How will your relationship with customers and partners evolve over time?

Every deal has a lifespan: your deal will only last as long as it continues to deliver value for both sides. Partnerships may be replaced a a Build or Buy solution. A customer’s needs may change such that you’re no longer providing a product that serves their purposes. Your relationship may evolve, or it may die.

Either way, it’s back to the drawing board in the Having Value stage and the cycle begins again.

Beware of False Shortcuts

False shortcuts

It’s as natural an urge to want to jump into the sexy parts of business development – meeting people, pitching our wares, and negotiating deals – as it is for a homebound teenager to want to jump behind the wheel and get going.

But by veering off the path of the Three Stages of Business Development is to risk traveling down some treacherous terrain. When we haven’t actually determined whether we actually have anything of value to offer that other people will care about, or that those we’re pitching have real value to offer in exchange, we can easily contract “Shiny Things Disease”. It can easily lead you down the wrong roads that waste precious time and resources.

But by being strategic and disciplined enough to follow the path in order, from the Having Value stage, through the Communicating Value stage, and into the Delivering Value stage, you can avoid the worst fate of all: having your company running out of gas before you get to your destination.

Want to learn more about how to apply the Three Stages of Business Development to your company? Check out GROWPLAN my new full-day interactive business development workshop on November 16th in NYC. Use discount code “EARLYBIRD” to get 50% off when you sign up by November 1st.

13 Responses to The Three Stages of Business Development
  1. Spence Reply

    Just started following and I like this post a lot, Scott. Particularly the last section. Lot’s of BDM’s want to simply communicate value and think that will deliver profits, when in reality, you have to have much more in place to deliver value.
    Enjoying following your blog! Keep it up! It’s very helpful for a young BDM like myself trying to make sense of it all!

    • slpollack Reply

      Thanks Spence! More to come for sure.

  2. Lean Biz Dev: Partner Development - The Start of the Deal - Scott Pollack on Business Development and Partnerships Reply

    […] How do you validate your ideas for partnership before you set down the long road to business development? […]

  3. Ben Reply

    Want to reiterate the above… Having been thrown in the deep end as a BDM in a wide ranging role, your posts have been a great way to make sense of the foundations required to create success. If I wasn’t all the way over in New Zealand I’d be at your seminars in a heartbeat. Keep up the great work.

    • slpollack Reply

      Thank you Ben, I really appreciate it. It’s comments like yours that keep me going! 🙂

  4. Jason Bryant Norris Reply

    Thank you, Scott. This is a fascinating topic! And, your writing is candid and accessible. I really have no background in business, but I would like to take my communications and teaching experience into business development. I picked this article as a starting point, following your article, “What, Exactly, Is Business Development?” Do you have any suggestions for those new to this subject?

  5. jokooms Reply

    Much appreciative Scott.
    Hmm, am dumbfounded, I have a startup company in the Courier and Logistics Industry and curved a *sweet-love* title for my self as the Business Development Manager…. Your posting,interactive definitions when I was searching to get a better understanding of Business Development has helped me to understand so much of what I did not before. I got it from. http://www.forbes.com/sites/scottpollack/2012/03/21/what-exactly-is-business-development/
    Its gave me a better perspective of Business Development understanding.
    I live in Ghana, West Africa, oneday I will attend one of your seminars.
    I will continue to learn and commit to practice in my start-up what I learn from your postings etc and the result I will let you know
    John

  6. Angelo Felix Reply

    I am new with BD and I am happy that I have a mentor in you.Your blogs are great!—easy to understand but very comprehensive, informative and helpful. Keep them coming and wishing you 60++ more years in your life so you can help more budding BD enthisiasts like me! More Power….More Years, too.

  7. jokooms Reply

    Hi Scott, thanks for this education ,could the program in November be organised via online for those of us who cannot travel to New York ? I live in Ghana-Africa. I would love to be part of this great opportunity
    John

  8. Johnny Young Reply

    Thank you for this blog Scott, it was very helpful. I’ve been in my business development role for three months and just like a teenage driver, I started driving without knowing my destination. Your blog has really help steer me in the right direction.

  9. Nneka Nnaji Reply

    Wow! This makes a lot of sense to me. I was actually working blindly, no destination. After reading up the three phases of BD , I will re-strategize applying the givenroad map and I believe it will lead me to my destination. Nice one.

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