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A2. The role of business development
"Business developers must think, not act, like the CEO." This short but precise statement was the key message from Niels B. Christiansen, CEO of Danfoss, at a lecture on business development management. The message is important. Not because it is stated by a highly successful former business development manager that has now turned CEO, but because it entails the essence of the role that business development should play in modern organisations.
A CEO acts on behalf of the organisation and is able to effectively define new strategic objectives, formulate supporting strategies, translate these into their operational consequences and oversee their execution.
A good business development unit does the exact same thing: applies analytical rigour, speed of mind and powerful execution and brings about the evidence and missing links that effectively bridge the gap between strategy and execution. Similarly, the business development unit acts as a catalyst for surfacing new strategic options for the company and presents these facts and opportunities with a short reporting route to top management.
As such, the business development unit will in effect act as an idea centre for new business initiatives that percolate up through the organisation. Just as the CEO often does but rarely has the time and resources to further investigate, qualify and respond to. The roles that business development units play in an organisation in relation to the tasks they carry out typically fall within one or more of the following types
oRole 1: The "strategist" – acting as the Office of Business Analysis
oRole 2: The "executor" – acting as the Office of Strategy Implementation
oRole 3: The "facilitator" – acting as the Office of Strategy Management Having depicted the possible areas of responsibility and roles within the organisation that a business development unit may play, an important recognition must be noted: business development means different things to different organisations. Below are just a few examples of the differences in today's business development practices which underline the important point that business development is and should be designed to meet its purpose.
At FIH Erhvervsbank, the department labelled Strategic Business Development has been tasked with managing the transformation from a mono-line to a multi-service B2B bank, starting with strategy formulation, business model design and delivering defined strategic initiatives.
At Arla Foods, Business Development plays the role of in-house consultants participating alongside external consultants as analytical and facilitation resources defining and leading strategic transformation projects.
At Novo Nordisk, Strategic Business Development is concerned purely with M&A activities on the corporate level, whereas a separate entity called Business Development & Patents is engaged with in-licensing activities and small-scale biopharma acquisitions in the Novo Nordisk Biotech Fund.
At Danske Bank, Corporate Business Development – a grouping of more that 50 business developers – is predominantly engaged with concept definition and implementation as well as post-merger integration work and migration of IT platforms which tend to drive innovation in banking.
Finally, at DONG Energy, Business Development works in effect as the CEO's chief of staff taking lead on all activities related to M&A, Corporate Finance and Strategy – their results are very visible in public: the making of DONG Energy.
Evidently, these examples show great diversity of the role that business development plays in different companies and the different kinds of roles that business development units can play.