Business development professionals are often ambitious, with expectations for compensation, bonuses, and promotions. In this video, walk through some of the typical metrics used in business development, how to help team members achieve those metrics, and how to recognize and support high-potential team members.
- Business development professionals are often ambitious with expectations for compensation, bonuses, and promotions. And yet, it can be hard to measure performance in an objective way. The further you get away from sales, the harder it is to define short-term metrics. The real value of business development is in the long term. So, you start by measuring inputs until enough time has passed for you to have outputs to measure. Initial metrics might be the number of companies that you've reached out to or the number of meetings you've had.
These are input goals. That is, they're about how much effort you put into the role rather than the results or output of that effort. A bank I know asks new business development professionals to have at least 100 meetings with possible partners in the first year. They don't have explicit expectations regarding the results of those meetings, but they want the business development person to dive into outreach and start building all kinds of relationships. The bank knows that the best way to get good results is to put in the effort upfront.
The other benefit of having a lot of meetings is that you start seeing patterns. If you meet with one hospital CEO, you might get a skewed view of hospital priorities, but if you meet with five, you start to understand the different kinds of hospitals and what similarities they share. You can also start to get a sense of which, if any, your company should be working with. Another input goal might tie to the number of opportunities identified and presented to the organization.
For example, if your bank wants to explore establishing branches or ATMs inside of hospitals, you might track the number and variety of research meetings held or the types of analysis conducted. Over time, you will have outputs or actual results to measure. How many deal proposals does each business development person present? How many proposals are approved for testing? How many become new lines of business for the company? And ultimately, how important are these new lines of business in terms of revenue for the company? By measuring milestones along the way, you can track progress that will lead to long-term success.
Regardless of the defined goals set for business development, it's important for the business development team to set expectations early and readjust those expectations based on new information. Let's say a business development professional is trying to close one big hospital deal this quarter, but the initial test is identifying new challenges to address before expanding the program. The business development person should let management know early and help them to understand how this change came about and what it means, good or bad, for the company.
Maybe it's not clear yet whether the new branches will be profitable or other hospitals need to see results before being willing to invest in ATMs or internal branches. New information comes out in any test or launch. It's just important that that information is surfaced and circulated early rather than late. So, how do you recognize and support high-achieving team members? Reward them for both inputs and outputs. You might acknowledge team members whose ideas are most frequently considered by the organization's leadership whether or not the deals are successful.
One company I know rewarded people who did lots of tests separately from rewarding the results of the tests. The idea was to encourage creativity. Over time, certain team members will create more business than others. Those who create the most new value should be rewarded and promoted. While inputs are good leading indicators of probably long-term success, ultimately the goal is the creation of value for the company. In some cases, high-achieving business development team members get bonuses and promotions.
Sometimes they can even transition into general management, being invited to run one of the businesses they developed. Ultimately, the business development team is the catalyst for growth and change, so senior commitment to tracking and rewarding initiatives is critical to their success.
Business development teams identify areas of opportunity: new products, new markets, new partnerships, and new distribution channels. It's critical to start with clear objectives. Are you using business development (BD) as a marketing tool, a sales channel, a source of innovation, or a corporate development hub? Management consultant Robbie Kellman Baxter shows you how the best BD professionals identify and build momentum for new initiatives. She also gives you the insight you need to launch a BD function in your organization, explains how to manage a BD team, and shares how to scale the BD function as your opportunities grow.
- Define business development.
- Explain the purpose of business development.
- Distinguish business development from other functions.
- Identify the skills and personality requirements for a business development role.
- Measure business development performance.
- List options for organizing a business development team.
- Describe how to make business development relevant at the C-level.