Over the lifetime of any company, there will be a handful of potential deals that could dramatically transform the outcome. Although every company theoretically has access to transformational opportunities, few actually manage to identify them, let alone seize them.
It could be a deal that saves you in an existential crisis, such as the recent merger of Uber China with competitor Didi Chuxing. It could also be a high-impact distribution relationship, a transformational acquisition to facilitate a pivot, or a high-value exit.
What distinguishes the winners from everyone else is that they are systematically networked into all of the surrounding companies that matter, so they can identify and seize the transformational opportunity when the time comes.
There’s a great story told about Larry Ellison, the founder of Oracle Corporation. One day, in the early 1980s, he was introduced in the corridor to a new employee, and the conversation reportedly went something like this:
Ellison: “Do you write software?”
New Guy: “No”
Ellison: “Do you sell software?”
New Guy: “No”
Ellison: “So, if you don’t write software, and you don’t sell software, please tell me – very slowly – what exactly do you do for my company?”
So who will you turn to when you face your existential crisis, if you only have people who make or sell stuff?
Who in your company has primary responsibility for:
- Mapping and networking your ecosystem?
- Building long-term relationships and driving deals with strategic partners?
- Identifying, evaluating and executing acquisitions?
- Developing and executing your strategy to go global?
- Working with you to tackle major strategic opportunities, including existential crises?
In many startups, the answer to this one is, “That’s no one’s job yet.” What’s your answer? Given the all-consuming nature of a startup, it’s natural to be focused on your own company first, then on customers and competitors. What’s often under-appreciated is the importance of expanding that focus to cover the other large and small companies around you.
Strategic Business Development is an investment in systematically mapping and networking your ecosystem to drive transformational opportunities.The ecosystem includes “adjacent companies” such as existing and potential suppliers, customers, competitors and partners.
Strategic Business Development is not Sales. Although very complementary to Sales, it’s also very different in that it doesn’t follow a quarterly cadence. It’s focused on a very few high-impact events a year rather than a large volume of quarterly transactions, with separate goals from those of Sales. Although the CEO will be heavily involved at times, it’s not primarily the CEO’s role. Strategic Business Development should be led by a senior professional operating at a peer level to Sales, Engineering and other company functions.
Do you have someone to turn to?
Credit: John O’Farrell, general partner at Andreessen Horowitz. (Fortune)