O slideshow foi denunciado.
Utilizamos seu perfil e dados de atividades no LinkedIn para personalizar e exibir anúncios mais relevantes. Altere suas preferências de anúncios quando desejar.
Why do I need a Business Development Manager?
Natalie Chapman
Australian Nuclear Science and Technology Organisation (ANST...
2.0 ENG101 guide to the business development manager
BDMs are found in all manner of industries from banking, retail, mini...
2.3 Why do you need business development?
To build business or get a product to market successfully requires the cooperati...
Figure 2: The role of business development and technical staff in technology commercialisation
Business development activi...
3.0 Technology push versus customer pull
The focus of marketing has progressed significantly in the last 100 years from pr...
Figure 4: Maximising the chance of product success
Adapted from Atkinson (2009)
4.0 How do you work together?
Egos to one ...
Torrens Island Asset Manager, Boilers, Mr Lai said “We were really pleased to be the first in the country to
trial the sof...
References
Atkinson, L (2009, September), AIC Commercialisation Bootcamp, Presentation Slides, ANSTO
Churchill, G., Ford, ...
Próximos SlideShares
Carregando em…5
×

Why do I need a business development managerv11 12829986305757 Phpapp01

Why do I need a business development manager?

  • Seja o primeiro a comentar

Why do I need a business development managerv11 12829986305757 Phpapp01

  1. 1. Why do I need a Business Development Manager? Natalie Chapman Australian Nuclear Science and Technology Organisation (ANSTO) Locked Bag 2001 Kirrawee DC NSW 2232 Natalie.Chapman@ansto.gov.au Abstract Justification for new positions or to maintain current positions is keenly scrutinised as organisations constantly look for business efficiencies. Technical specialists often view business development managers as an unnecessary luxury and question why they are required. The superiority of a product is often seen by the technical specialist as the defining factor in customer choice. But unless the product meets a specific customer need it will not reach its full commercial potential and fail in the marketplace. It is the responsibility of the business development manager to provide market input into product development and commercialisation to ensure it meets a market need and so organisational resources are allocated appropriately. This paper will outline the role and skill set of a business development manager, how they contribute to business growth and the way in which they need to interact with the technical specialist. The value that a business development manager can bring to an organisation is exemplified in three case studies. 1.0 Introduction Successful commercialisation of a technology or technical service requires a suite of different skills. When the business and the science work cohesively towards a common goal that success is achieved. Historically, a major hurdle in this process is the misunderstanding and lack of appreciation of roles. Often the first reaction to a business development manager (BDM) from many science and engineering professionals (technical specialists) is “They don’t know anything. They won’t know our process or plant. Is their experience even remotely related to our business?” “Will they listen to me and appreciate my experience?” In return, BDMs have their own preconceptions from working with technical specialists “They are only interested in the science and finding out answers rather than solving problems. They are only technology focussed and not customer focussed. They are too technical. They are not business savvy. They are too altruistic and just want to give it away.” The reality is that, BDMs are brought into organisations by management to grow the business or to get new products to market. They need to work with technical specialists to achieve this. This paper will discuss the, who, what, when, where and why; the value of BDMs to technical specialists, and their relevance to scientific and engineering consulting services, technical product sales or commercialisation of innovation from research organisations. Three case studies will be used to illustrate the value BDMs can bring to a business – commercialisation of remaining life assessment software; growth of a radiation safety business; and the impact of not adequately resourcing commercialisation of a platform technology.
  2. 2. 2.0 ENG101 guide to the business development manager BDMs are found in all manner of industries from banking, retail, mining, environmental consulting and pharmaceutical to the tertiary education sector. What do they do? How do they do it? And what value are they to organisations? All will be revealed in a detailed look at their role which will explain why a BDM and the business development role are valuable; what skill set a BDM needs; and when you need one. 2.1 What is a business development manager’s role? The role of a BDM is to bring in new customers from new markets or by increased penetration of current markets through, a variety of activities which include; • Market research/intelligence gathering on customers and competitors – to determine how big potential markets are; discover new markets and determine when, how often and why customers buy. Who are the competitors? What are their strengths and weaknesses? And what is their market share? • Analysis of market viability for entry – What is the value and size of the market? What are the barriers to entry? How will competitors react to new entrants to the market? • Generating sales leads – by attending technical conferences and exhibitions and cold calling. • Preparation of sales policies, procedures and pitches – to maximise return on investment in sales and marketing activities. • Presentation of pitches and sales negotiations – Professional presentations which outline the value to the customer are required for more complex technical services, products and innovations or to raise capital for commercialisation of technology or rapid business expansion. Once the customer is interested sales negotiations begin. • Preparing business strategy and plans – Good business practice involves gathering market intelligence, preparing a business plan with the objectives of the business clearly defined and a strategy of how to get there. • Forming strategic alliances for business growth – Fostering relationships between businesses for a “win-win” partnership that focuses on growing business for each other. 2.2 The business development manager skill set For technical selling in a scientific or engineering environment it is particularly important for the BDM to have “technical knowledge and competence, product and customer knowledge and intelligence” (Churchill et al, 2000). A scientific or engineering qualification and experience gives them the required background to understand the scientific principles at a level intermediate between the expert and the novice whilst qualifications or experience within the particular or a related field are even more desirable. Technical understanding and being able to converse with the technical specialist and the industrial customers with their jargon is paramount to their credibility. Business Development staff are the complementary fit to the technical specialist. They can bring significant business and market knowledge and skills BDMs should • have good written and verbal communications • be customer-oriented experts who will get to deeply understand the industry customers • know best routes to market • know who really is the customer rather than who is assumed to be the customer • look at the business proposition from different viewpoints and find new markets
  3. 3. 2.3 Why do you need business development? To build business or get a product to market successfully requires the cooperation of both technical and business staff in a symbiotic relationship. Market research, analysis and sale of the product or service needs input from both parties. A clear understanding of the roles, responsibilities and motivators of each is required. An appreciation of where each is coming from, respect for the value each can bring, acceptance and trust are paramount. In the majority of cases the technical specialist is focussed on their technology and its refinement and this is where their key skill set lies. While the primitive urge is to nurture it like a mother protects her baby, the technical specialist needs to recognise the importance of involving a business development professional as early as possible. Otherwise the invention and its potential can be smothered and not fully realised. Early business planning will give the new product the best chance of success in the marketplace, where it’s not the best technology that wins, it’s the best solution perceived by the customer to best fit their need. Technical specialists make great Chief Technology Officers (CTO) but are in majority of cases not the best Chief Executive Officer (CEO). The CEO needs to have entrepreneurial vision and strong leadership ability (Mazzarol 2009), not to be focussed on product detail and technology specifications. 2.4 When should you involve a business development person? As an engineer, do you build a bridge and then go to Council to get it approved and then to the public to ask their opinion on what they needed? No, you engage stakeholders early to ensure that someone will want the bridge when it’s built. Market research and analysis determine customer need before the project is funded. For a new product, no matter how unique or novel, there are some business related steps that are essential during product development or the product will go nowhere. The same is true for a technical business trying to increase its revenue from new customers. Often business development people are brought in too late. A good project manager or engineer knows the value of project planning, including involvement of stakeholders, planning for regulatory approval and facility design, construction and installation as outlined in figure 1. Figure 1: A typical project plan used for a new building with scientific facilities Similarly, business development activities need to be running in parallel with new product or new service development not at the end or separate to it. Technology commercialisation consists of many technical and business development activities running simultaneously. These are important stages in determining whether the technology development should be funded and what IP protection strategy should be applied, preparing product and market development plans and mapping out pathways for product or business sale as illustrated in figure 2.
  4. 4. Figure 2: The role of business development and technical staff in technology commercialisation Business development activities for technical products and services require input from both technical and business specialists throughout the marketing and sales cycles collectively referred to as industry engagement as illustrated in figure 3. Figure 3: The role of business development and technical staff in industry engagement
  5. 5. 3.0 Technology push versus customer pull The focus of marketing has progressed significantly in the last 100 years from production to product to sales to marketing and finally to customer-oriented marketing as illustrated in table 1. Table 1: The evolution of consumer marketing Marketing Focus Definition Example Production Focuses on the belief that consumers will favour those products that are widely available and low in cost Ford Model T Product Focuses on the belief that consumers will favour those products that offer the most quality, performance, or innovative features IBM Sales Based on the premise that if left alone consumers will not buy the product and need to have aggressive selling to buy. Insurance Marketing Integrates marketing activities towards determining and satisfying the needs and wants of the target markets (desired consumers) Burger King Customer-oriented Company defines customer needs from the customers viewpoint Sony Kotler (1996) While BDMs have generally moved with the changing trends in consumer marketing from product marketing to customer-oriented marketing as shown in table 1 many technical specialists of new products/technologies have not. They are still of the belief that if their product/service is superior then the customers will come to them. However, what if the customer doesn’t know, or doesn’t care about the particular feature or service offering that is superior, or is more concerned about cost? Product marketing is based on the theory that if you built the best product it would sell itself. But if this was the case then Beta video format would have beaten VHS with technical superiority. Many reasons were cited as contributors for the Beta failure. The most notable contributor was the fact that standard Beta tapes only had a “60 minute play time, which was not enough time to record a movie” (Owen, 2008). Customers and manufacturers chose 3 hour VHS tapes capable of recording movies and television programmes and Beta was left behind. The innovation space is full of scientists and engineers creating amazing products and innovative solutions which fail to meet their potential because of the lack of involvement of commercialisation or business development staff throughout the innovation process. Applied scientists and engineers work towards better ways to solve problems. It is natural for technical specialists to be protective of their new product or service and common for them to want to control its development and destiny. Likewise engineers running successful consulting work in a sellers market react to the “interference” of a business person. Others perceive business people as not understanding the true value of their science and sullying its purity/nobility by bringing it down to money as the common denominator. Product success (product attractiveness) is dependent on the new product’s ability to meet the customer’s need as illustrated in figure 4.
  6. 6. Figure 4: Maximising the chance of product success Adapted from Atkinson (2009) 4.0 How do you work together? Egos to one side, both BDMs and technical specialists are experts within their own fields. As such there is a fundamental need to appreciate each other’s background, expertise, role and motivation. The technical specialist will need to trust the business person. In turn, the business person needs to listen to the technical specialist and incorporate their commercial and industry insights into the business strategy. To succeed they need to listen to each other and both need to be comfortable with the proposed way forward. If they are not then the product or service will never reach its full potential in the marketplace and may even fail. 5.0 Communication is the key Technical specialists also need to be able to communicate the benefits of their product or service offering to a range of audiences as part of the commercial process. While industry jargon may be accepted between technical professionals and researchers, it does not help the technical specialist with his case for financial support from the organisations accountants or external investors. Likewise when legal agreements are required, government funding is sought, intellectual property protection is secured and corporate alliances meetings at senior management level take place jargon free clear language is vital. 6.0 What can business development do for a technical product/service? The following case studies illustrate how business development can make or break the success of products and services in the marketplace. 6.1 Remaining life assessment software for the power industry - A case study An ANSTO expert in remaining life assessment has developed a software program which is a simulator for coal and gas fired power stations and petrochemical plants that calculates the damage from unit cycling, then assesses the costs of the chosen cycling regime. This provides power stations with rapid assessment of component damage, which can lead to considerable savings. The scientific specialist developed the software and provided his product expertise and market knowledge on customers and competitors. The BDM spoke to customers and prepared the market analysis, marketing plan and financial and business models. The technical specialist and BDM have differences of opinion in some areas of the proposed marketing and sales of the product but these are discussed and negotiated until both parties are happy. Only when there is compromise, agreement and trust can the commercialisation of the product be given the best hope of success. The software has potential to earn hundreds of thousands to millions in annual licence fees.
  7. 7. Torrens Island Asset Manager, Boilers, Mr Lai said “We were really pleased to be the first in the country to trial the software and believe it deliver a cost savings of about $500,000 in modelling and stress analysis alone and millions of dollars in improvement of asset operation and management” (WTIA, 2009). Result – Domestic licence fees worth 3x the development costs have been committed. International commercialisation of the software has begun. . . 6.2 Radiation safety calibrations business – A Case Study The Calibrations business was understaffed but had the potential to grow profitable revenue with appropriate staffing. The BDM met with the team to discuss what was required to grow the business and prepared a business case for management. The BDM conducted market research with the input of the Calibrations Business leader and prepared a plan to sustainably grow the business by attracting new business from new sectors (market development) and more business from current customers (market penetration) and employing more staff. Result - Enthusiastic implementation of the marketing plan by the BDM and Calibrations team resulted in the better than expected growth in new business. The business doubled its revenue in the first 6 months of the plan with a healthy profit margin. The staff moved from an internal focus to a customer-oriented focus and implemented marketing activities under the direction of the BDM. 6.3 Technology platform with medical applications – Case Study The consequences of not utilising the services of a BDM effectively can negatively affect business bottom lines. A process for manufacturing a platform technology with medical applications was developed and its intellectual property (IP) protected in multiple jurisdictions. However, business development activities were not conducted for almost half of the patents’ life, after which exclusivity on commercial exploitation of the technology no longer applies. With patent protection and development cost adding up to upwards of $1 million, no end user had been identified or path to market been secured. Result - An IP review was conducted in 2009 which highlighted the lack of resources allocated to commercialising the technology. A BDM was allocated to the project and within 6 months a deal was signed to licence out the technology to a new venture for a significant return to the organisation. While this was a good outcome, the involvement of a dedicated BDM at an earlier stage would have resulted in a faster route to market and greater return on investment. 7.0 Conclusion Business development managers are vital for driving business growth and commercialising new products. To do this they need to work closely with the technical specialist and together develop a business strategy that they can both own. Both sides need to understand and appreciate the expertise that the other brings. The technical specialist has deep product or service knowledge and often has good customer understanding. The BDM has the business skills to ensure the product or service reaches the market and provides significant return on investment. It is through this symbiotic relationship that the full market potential can be realised. 8.0 Acknowledgements The author would like to acknowledge the significant contribution made by Joy Woods, Business Development Associate at ANSTO and Karen Portwin, Commercial Business Manager at ANSTO and the many helpful insights from technical specialists including Michael Chapman, Development Engineer at BlueScope Steel, George Collins, CEO at CAST CRC, Bob Ring, General Manager at ANSTO Minerals, Rosanne Robinson, General Manager, ANSTO Business Development at ANSTO and Daniel Saffioti, Manager, Infrastructure - IMS at ANSTO.
  8. 8. References Atkinson, L (2009, September), AIC Commercialisation Bootcamp, Presentation Slides, ANSTO Churchill, G., Ford, N., Walker, O., Johnston, M., Tanner, John (2000), Sales Force Management, Sixth Edition, McGraw-Hill International Edition, p348, ISBN 0-07-116170-8 Kotler, P, (1996), 9th Edition, Marketing management: analysis, planning, implementation, and control , Prentice Hall, ISBN 013245101 Mazzarol, T. (2009, July). AISAM 2009 - Entrepreneurship and Innovation . VIC, Australia: Australian National Business School. Owen, D, (2008), Media College.Com (http://www.mediacollege.com/video/format/compare/betamax- vhs.html [Date accessed: 14/2/10] WTIA (2009), Australian industry wins, 23 July 2009

×