A Brief Note on ‘Business Development’
If you’re expecting some Aristotelian treatise on the function of business development that will provide you with a new key to rapid growth, please stop reading right now. Rather, this is a rambling compendium of my own observations from four decades in the aerospace and defense sector designed to establish a common understanding of the very meaning of ‘Business Development.’
“Isn’t business development just ... developing business?” you might ask. A fair question, and one I hear often. But after years of working with business leaders, I can confidently say that if you ask four people to define it, you’ll get five different answers.
So, what is business development? At its core, it’s all the activities involved in attracting new clients while keeping your existing ones. But there’s a catch. Should you even keep all of your current business? What if some clients are unprofitable or rely on outdated tech? Sometimes, we get so focused on preserving what we have that we lose sight of what we could be building.
It’s perfectly fine to let go of a bad customer or an outdated product line. What’s more important is having a growth strategy focused on your strengths and aimed at future opportunities. Instead of responding to every bid that comes your way, consider how you can target markets with long-term potential.
But this is starting to sound more like strategic planning (which is a topic for another blog).
The Real Definition of Business Development
I can’t improve on Wikipedia’s definition of Business Development, so I’ll summarize it. Business development entails tasks and processes to develop and implement growth opportunities within and between organizations. It is a subset of the fields of business, commerce, and organizational theory. Business development is the creation of long-term value for an organization from customers, markets, and relationships.
That’s a whole lot more than ‘sales’ and, most importantly, is a function that needs to be fully aligned and integrated with a company’s strategic goals and its internally funded development of new products and services. Important lesson learned: allowing Engineering to define the projects it wants to pursue under internal funding generally fails to adequately account for their impact on strategic growth objectives, leading to poor return on invested capital. So-called Independent Research and Development (IRAD) must be “BD driven.” That comes from diligent market research and a searing look inward at your technical and manufacturing strengths and weaknesses. A good BD-driven IRAD program will point to the need for realigning or strengthening in-house capabilities (‘gap filling’) and seeking out strategic relationships with other companies to leverage one another’s expertise and Intellectual Property.
One of the clearest examples of business development in action is the ability to form strategic partnerships. A company might identify another organization whose capabilities complement its own, and together, they create a partnership to explore new markets. For example, a defense contractor might partner with a software firm to provide integrated solutions to the government. This type of relationship can create new revenue streams for both parties, while also strengthening their market position. These collaborations aren't just about getting more customers, but building a foundation for long-term value creation that can lead to sustained growth.
Integration of business development into your daily operations can take many forms. Start with a dedicated business development team, or if you’re a smaller organization, assign key roles and responsibilities across various departments. Ensure your marketing, sales, and product teams are constantly aligned and communicating about market shifts, customer needs, and potential partnerships. It’s critical that everyone understands the long-term goals so they can work together to spot opportunities. Regular cross-functional meetings where teams review market research, sales pipelines, and product developments are essential.
Another essential element is understanding your market’s ecosystem. It’s not just about knowing your customers but understanding your competitors, suppliers, and the regulatory landscape. In the aerospace and defense sectors, for instance, government policies or shifts in defense spending can create or eliminate opportunities almost overnight. Keeping tabs on these external factors allows you to adjust your business development strategies accordingly. Sometimes, this might mean pivoting to a new market or altering your product offerings to meet evolving needs.
To effectively integrate business development into the fabric of your organization, it’s crucial to foster a culture of collaboration and continuous improvement. Business development isn't just the responsibility of a single department; it requires the input and involvement of your entire team. Encourage open communication across departments—marketing, sales, engineering, and operations—to ensure that everyone is aligned with the company’s growth objectives. Regular training and development can help keep employees sharp and in tune with emerging trends in your industry. Moreover, investing in tools such as customer relationship management (CRM) software and analytics platforms can streamline the BD process, helping you track leads, manage relationships, and measure progress toward long-term goals.
My purpose in writing this brief note was to encourage you to rethink your own definition of ‘Business Development.’ If it is more than marketing and sales, if it includes the analytical preparation of potential growth opportunities, collaboration with and integration of the expertise represented in your specialist functions—engineering, manufacturing, finance, operations management—and the ongoing support and monitoring of the effectiveness of your BD process, then I will consider myself having succeeded.
Discover how HMC’s business development services can unlock growth for your company by identifying new opportunities, crafting competitive proposals, and driving market expansion strategies tailored to your unique needs. Let us help you navigate the complexities of business development to achieve long-term success.
