Renew Your Business
When we work with businesses whose growth has stalled, one question we are always asked is “How do we start a new business development initiative?” Many team members who were part of the original business expansion are gone. Those who are left—already struggling with new product development—generally don’t distinguish between new business development and new product development. After a simple review of a typical new business development framework, team members ask, “What do we do first? We are in the business we are in.” If they stay with that business mindset, they have two choices:
- Live with what they have and reduce cost (buy-make-sell) to maximize their near-term profits. They may want to evaluate pricing options to assure they are capturing the inherent value their offering delivers.
- Seek incremental product improvements aimed at reducing customer costs, which defer customers from ginning up a competitive death spiral.
If team members are willing to consider new business development, then they need to think business renewal. There are two major options to business renewal: find new ballparks to play and create new business models. In either case, team members must change their mindset to include these four principles:
- Commitment is required. Team members must agree that they must think and do differently while the business continues to run on autopilot. The obstacle is the common fallback that they can’t stop what they are doing for fear that something bad will happen while they are engaged in renewal.
- Think out of the box. They must go beyond their existing customer base, including those down the value-adding chain—and including the potential consumer.
- Invest in market intelligence early. No matter how exciting some concepts may be, without an analytical assessment that clearly identify the real drivers and economics associated with the concept, buy-in will not happen.
- At the right time, get the larger organization involved. Without broad-based buy-in, renewal is destined for failure. This has been the number one problem in many companies and has become an entrenched barrier over many years.
Those who ignore new business development eventually find their business in the “death spiral,” and this decay generally takes several years to play out.