Renew Your Business
While working with businesses whose growth has stalled, one question they always ask is “How do we start a new business development initiative?” Many who were part of the original business expansion are gone, and those who are left, already struggling with new product development, don’t generally distinguish between new business development and new product development. After a simple review of a typical new business development framework, they 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 cost reduce (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 they are willing to consider new business development, they need to think “business renewal.” Two major options to business renewal are to find new ballparks to play in or to create new business models. In either case, they must change their mindset to these four principles:
- Commitment is required. All must agree that they must think and do differently while the business continues to run on autopilot. The problem here 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. Here, they must go beyond their existing customer base, including those down the value adding chain—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.