I am broadly in agreement with this matrix, though I would perhaps add that activity in the 'market penetration' quartile is really a sales function.
In a former life when describing Business Development internally to others in the company I used the analogy "sales pays your wages, BD your pension!" Meaning that BD activities are focused on the future, whereas sales is predominantly involved in today. It was a simple way to get a quite complex strategic role across that involves and incorporates all departments and functions in any enterprise.
Unfortunately the now increasingly wide use of the term Busness Development by recruiters to glorify a sales role title clearly complicates the issue. In the main, it tends to be larger organisations that (can afford to) employ BD people, whereas the smaller SME's tend to hire 'BD sales people' - which is really a misnomer.
BD people don't actually 'sell' anything - they do however facilitate the sales process.
Hope this is helpful.
Regards.

posted April 9, 2008

I agree with definition within Linkedin:
Strategic marketing defines what kind of market segment to address and specific market needs
Business Development develops offering (service/solutions/products) to match market needs (demand) as identified by SM
Operational Marketing defines how to sell the new offering (policies, price i.e.)
Sales sells /service/products following the policies as defined

Different situation while BD would be intended as Strategic Company Reorientation or DIfferentiation: in this case it has a specific strategic role under the Top Management

posted April 10, 2008

Mike,

The A-M Matrix is a classic thought. Business Development theories might have progressed a bit since then.

BD would not be best categorized as sales and marketing. S and M are very different skill sets needed for the firm. BD's important function includes identifying markets that the company can venture into with the thought and understanding of its limited resources - financial and personnel. BD might be viewed as the "connector" to new clients or new markets that enables other talents of the firm to surface.

See Malcom Gladwell's, The Tipping Point.

http://www.gladwell.com/tippingpoint/index.html

Just a quick thought.

Rich

posted April 10, 2008

First, I feel the Ansoff Matrix is great when explaining the theory behind BD. It's a classic model that has some relevancy today.
Second, I feel that BD is intertwined with Sales, Marketing, Product Development, and CI and needs to be involved in all processes. I agree that BD needs to focus on the future rather than the present and needs to leave the closing to the sales reps.
"Jack of all trades, master of none"

Links:

• http://www.sendouts.com

posted April 10, 2008

The Ansoff Matrix was not intended to define a particular job function, but rather to broadly characterize strategic options for growth. As such, I don’t know if it makes sense to define BD in terms of this matrix. Yes, business developers may be involved to varying degrees in some or all of the squares of the matrix, but “being involved in” doesn’t help clarify a business developer’s primary role.

The challenge in defining the BD function is that different companies use it to mean different things, as others here have noted. In some companies, BD –is- Sales. At one software company in Austin, ALL salespeople are given the title of “Director of Business Development.” At other companies, BD is all about building alliances and partnerships which may or may not ever drive sales, or at least not directly. And at some companies, BD is really what I would call market development – exploring new markets/verticals, but not necessarily with an immediate sales focus.

Having worked in tech companies for 12 years in various marketing and business development roles, I’ve come to believe that the tech sector as a whole (and possibly other industries, as well) would benefit from standardizing job classifications on the business side of the house, with an eye toward highlighting the differences as well as the similarities between the various roles. To that end, I recently wrote a book called “Sales and Marketing Careers in the Tech Sector” that explores, in some detail, what people in these positions typically do.

While researching my book, I looked at hundreds of job descriptions for BD roles in the tech sector and can say that the most common – though not necessarily the best – definition of BD entails driving sales through third party channels (partners, resellers, OEMs, influencers, etc.). These may be short- or long-term efforts, new or existing products, or new or existing markets. It may be, as one person suggested, about selling “vision” until a future product is baked. The key is that there is assumption that the selling – whether visionary or tangible – will ultimately lead to revenue for the company. In that sense, it is a sales role. With that said, I think business developers tend to be more strategically-inclined than traditional salespeople because the nature of the selling process when third parties are involved becomes more intricate. Also, as one person noted, business developers tend to always be on the lookout for new markets to tap that salespeople may miss simply because they’re more focused on meeting their short-term sales quotas.

I hope this is in some way useful.

Best regards,
David Wolpert

posted April 10, 2008

I believe Brian and Mathew have covered the issue, since the Ansoff Matrix shows a road map for BD, while Rodgers’ technology lifecycle indicates who BD should focus. So allow me to add a few thoughts to our present definition.

I understand BD is a Process that should be constantly revisited.

It is an strategic role that is expected to have a broad businnes approach, so we should include the Finance dimension to add sustainability.

It is an entrepreneur role in the sense that it goes from strategy down to implementation details such as CRM programs and the impacts within other products and services of the organization.

In the end, its objective is to cultivate propositions that will bring overall value in the mid term.

Regards,
Angelo

posted April 10, 2008

Having worked as a Business Development Manager, I can say that it varies to the degree of the organization. For corporate and investment banking, it is truly a function of targeting new business acquistions for the companies. In the sales world, it is more towards developing new business opportunities by building pipelines of new revenue. Though I have had in most instances not only had to open the opportunities, but have had to also close them. In other situations, I just opened the opportunities and handed the opportunities to Account Managers to then go and close and manage the relationship.

posted April 10, 2008

Folks, I sense there's a lot of electrons being expended here on the theory side. Pragmatically speaking, the most important definition of BD is what your boss' boss says it is.
BD is often a situational job function within the company, and if you're contemplating a career in BD, ensure there is: (a) a clear job description of no fewer than two full pages having very concise, if not painfully tactical objectives and requirements; (b) senior-level assurances that these responsibilities are or will be clearly communicated to other executives and middle managers; and, (c) that governance of resources and internal authority are clear--rolled out to the corners and squared away. If not, don't take the job.
I have seen very fine professionals have their careers eaten alive by BD roles that were something else in disguise--either sales, having no authority other than personal charm to get things to happen, or general management or product management capacities demanding a personal quote (two jobs in one).
If you're contemplating a new path in "Business Development," ask about those three points above and angle to have them are written down and published to the stakeholders with whom you will be working. Just my two cents.

posted April 10, 2008

Tim makes a very good point, above. Regarding Oliviero's earlier succinct definition set, BD may be considered more functionally oriented to Product Management/Product Development in that context.

My .02, BD is a term that was coined to apply a title for someone (or a role) that has a generalized, strong cross-functional skillset who primarily is tasked with contributing to the overall market evolution of an enterprise. I know it sounds ambiguous, but so is the title and in most cases, the role itself.

In summary, I agree that it is what a company wants it to be. I've been given that title in a strictly sales setting. I've also been given that title in a channel/partner development setting, as well as a more GM-oriented role.

Call me legacy, but why can't we all agree that one either manages, sells, operates, produces/manufactures, supports customers and/or perfroms administrative tasks within the overall functions of an enterprise!

posted April 10, 2008

I agree with Matrix in general. In my view BD main objective is to create an environment which is complimentary to sales and brand enhancement.

For today and for tomorrow.

BD role also demands to chalk a strategic roadmap for organisation, based upon sales matrices and analytical data.

It is often confused with sales and presales and marketing, since a BD person is supposed to have understanding of all of these three. In my view, not many organisations have their BD group aligned to correct KRAs because of lack of clarity for the role definition.

posted April 10, 2008

It's a good initial definition, but very high level. It leaves a lot of room for interpretation, namely which activities are necessary to penetrate a market or develop a product. In my experience channel selection and alliances / partnerships are important bus dev activities, for new products and markets and deeper penetration of existing markets. I think there are many different perceptions of the interface of bus dev, with marketing on one side and sales on the other. I think bus dev is a link between marketing and sales, and as such requires training sales people, getting initial prrof of concept wins under way, but also planning demand generation campaigns with marketing.

On the importance of partnerships and channels, especially for high tech, I recommend Jakki Mohr's book.

Links:

• http://www.markethightech.net/

posted April 10, 2008

I am not familiar with the Ansoff matrix, but i.m.h.o. in today's Information Age we're dealing with SOLUTIONS (combining products & services) and CUSTOMERS (value seekers) rather than with PRODUCTS and MARKETS.

Taking these context changes into account, the matrix' cells might get filled with terms like "value bundling", "consultative selling", "customer intimacy", etc.

posted April 11, 2008

Business Development is salesmen that can't close!

posted April 11, 2008

IThe BD title has really come into prominence in the last decade or so. This has come about basically due to the diluting of the classic Account Manager role, which used to denote pure sales and now is confined to more “caretaking” role.

I see Biz Dev’s as exclusively as new business focused, and should be kept in that capacity. These are the types who target/identify strategic accounts, formulate a solicitation strategy, make the first contact, and basically open the door of new business clients. IF Bd’s are kept in the specific role, than I think it is an appropriate title. When BD’s are asked to take on more responsibilities that what I described than the confusion starts.

posted April 11, 2008

what´s in a name, someone said a long time ago. Another one is Beauty is in the eye of the beholder.
Put the two together, and it mixes into: It is whatever two people agree on that it is.

I tend to like the classical definitions, for they are clear, you can find them in textbooks and dictionaries. But at the same time, if we do not allow development of meaning, we all will be at a standstill, which we basically cannot afford to. At least if I look at teh explanations for recent interventions at the financial markets in the US.

So, it belong under marketing & sales too. But a business developer can act as a sales rep, but a sales rep is no business devloper yet.

have a good weekend

John

posted April 12, 2008

My view:

I think the term business development is misused. Often 'Business development' is added to the title of a sales role to try and make it look smarter like putting some lipstick on an old tart - but it remains sales and not BD.

BD is more strategic and involves putting in place the strategies and channels to create new products and make new sales. BD professionals can then hand over to sales or account management staff once the alliance/channel/structure has been put in place by the BD team.

To me a business development manager is above all a curious type whose role is to know the market and sense new opportunities to enter new markets, mashup products or sell via new channels. It requires an ability to think from a white sheet of paper, to put together a team and make things happen. It involves the ability to get the organisation to move to make it happen and it needs presentation and negotiation skills and legal knowledge.

Sales is more about getting a sale - finding a prospect, developing rapport, listening to their needs and seeing how, with the respect to the products and services your company has at its disposition, the salesperson can meet those needs 'by closing a sale'. Its all about closing that sale and getting on to the next.

But as VP BD sounds so much sexier than VP Sales, many Sales roles are tarted up.

posted April 12, 2008

Hi Mike,

Great question! The Ansoff Matrix appears to provide a good basis for developing an understanding of the potential role of BD. I have found this term used very loosely to include sales people who wanted to be re-labeled as some of the other respondents indicated, a place to park senior executives (either with or without a purpose), a designation for individuals who may focus on more strategic or complex deals, channel development and other roles.

I have found that the specific characteristics of this role vary by industry and organization and that the specific combination of elements and their importance will ultimately determine its designation. Unfortunately, this dynamic coupled with the lack of a professional standard for business development professionals continues to complicate the definition of business development. The Association of Strategic Alliance Professionals has begun the process of developing a certification process that will help.

As this topic gets further defined, I believe investors, CXOs and others will develop a better understanding of how this role can be applied to help their organizations better succeed.

Thanks

Links:

• http://www.strategic-alliances.org/

posted April 13, 2008

Mike,

I am in agreement with Bryan's response. May I add the term "Rainmaker" to recruiters terminologies for Business Development. The definition of Rainmaker to me is a high powered sales manager for a company that needs sales now. Business development includes a building of relationships for future sales but it is not its entire focus it is much more. Your defintion is essentially a good one.

Just my 2 cents worth.

Ted Langs

posted April 10, 2008

While I think that definition is fine, it doesn't take into account industry and organization maturity. Business development activities will be different at different firms dependent on the current competitive positioning of that business vs. others. At one firm it can be focused on cost drivers needed to achieve competitive parity, while at another be completely about customer demand analysis and product development to be the innovator in the industry. The matrix is a fine tool but seems too static.

posted April 11, 2008

I know many organizations are using this as another term for sales, but I have always felt that marketing IS BD and BD is much broader than sales. BD is what goes on behind sales, just like marketing.

posted April 11, 2008

Mike,
I would suggest "Business Development" and "Sales" are one and the same. Both are attained through employing strategies that add value ("value" is determined through the process) to your clients while driving revenue for our companies. Both entail developing trusting relationships that hinge on our ability as Account Executives / Business Development Professionals to do what we say we will do and make good on commitments to our clients. It all comes down to understanding our clients, targets, and prospects... who they are, what they do, who their customers are, and what drives their value assessment. Combine that knowledge with:
1. a sincere desire to help and become a true business partner and resource; and
2. the exceptional interpersonal skills and relationship-developing prowess we top-notch Business Development Professionals possess,

and you have a winning combination nearly every time.
I find that many Sales/Business Development Professionals try to re-invent themselves on a constant basis, which tends to skew results and throw off productivity.
We al know this, in that people buy from people more than companies. I am a firm believer that doing business together is simply a by-product of a good relationship where confidence has been established.
I invite you all to take a look at my profile to see my background and what I'm about. If you feel I can add value to you, your business, or your sphere of influence, lets talk!
Regards,
Bruno
(949) 742-1402

Links:

• http://bsd.officedepot.com

posted April 11, 2008