In the spirit of disclosure, I am a recidivist entrepreneur and a four-decade student of the process of starting and building a business. I have, over those years, developed a unique approach to turbo-charging business development. It involves: 1) a Board of Advisers, which is populated by very senior people who are dedicated to driving the top line; 2) a different approach to resourcing and organizing a company’s senior management team; and 3) an approach that focuses on building revenue in larger chunks. Trust me — it really works!
One of the most difficult challenges that a CEO of a small to medium-sized company faces is the evolution and management of an effective business development effort. A major part of this challenge is knowing when and how to start building a business development team. Most often the founder’s vision, contacts and personal resources initially drive a company’s top line. At some point in a company’s history, the resources and contacts of the rest of the senior management team become insufficient to sustain growth at high levels. The company then establishes a business development group, and, in doing so, gives birth to what often becomes a major source of frustration and wasted time and resources.
Business development most often evolves as an add-on to the principal organization and function of a company. Traditional business development adds a new type of employee to the team. These are individuals who specialize in identifying and capturing new business rather than in the core skill sets that have built the company … they are often among the first ‘outsiders’ that a corporate culture experiences. Organizational dysfunctionality is quite common under these circumstances. In the worst cases this can lead to ‘branding’ the company as dysfunctional … a tough reputation to overcome once it sets in. The senior management team tends to know a lot more about the business the company than how to manage business development effectively … and, in company after company, it shows.
For the right company and with the right approach an Advisory Board dedicated to driving the top line can be a highly effective and extremely cost effective alternative approach to business development.
So how do you determine if yours is one of the ‘right’ companies? I have spent a lot of time on this question and learned how important getting it right can be. I know this much for sure … the right company will benefit hugely while a wrong one will simply waste precious resources and management time. Here is a checklist that might help:
- You have had enough with the costs and results of traditional approaches
- You are seriously ready to try something different
- Your management team is composed of mature, experienced people who know their business
- Your company is providing mature products or services to a broad base of clients
You have a run rate rather than a burn rate
- Your management team deals well with, indeed embraces, change
You might think that building and managing an Advisory Board is rather expensive. But this is where the real surprise comes. This high powered resource is amazingly cost effective. A four to six member Advisory Board costs roughly the same as one middle-level business development specialist.
The results of this approach can be startlingly effective. An Advisory Board that is populated with very senior individuals who have established themselves as centers of influence … able to open important doors and provide important endorsements … can help a company move up to a whole new level of performance.
One thing I have learned about designing and structuring these Boards … it is a bad idea for a management team to undertake such a journey without supervision and lots of support. Often the team attempts to ‘de-fang’ the process by choosing ‘safe and cuddly’ Board members. A pre-emptive effort at protection of the status quo.
A well designed and populated Board is a real challenge to the management team. The initial months of dealing with a new Board can and should be a very stressful experience. Lots of the team’s approaches to doing business will be brought into question. They will find themselves needing to up their game in the face of superior knowledge and experience. Things will start to move faster and in a more purposeful manner. At times they will wonder just what they have let themselves in for and how any of this can end up for the good.
Starting on the journey is easier than staying the course. Not starting is easier than both. But the path from ‘here to the next level’ is through a gauntlet of gut checks, painful self examinations and evolutionary leaps. Success brings not only a more robust run rate … it also brings a superior management team ready to manage a company that has successfully made the leap to the next level.
© Dr. Earl R. Smith II