Consulting Services – Business Development

Does Business Development Add Value?

Business development exists at the leading edge of strategy-deal seekers opening up opportunities for new revenues, product lines, technologies and markets. Often competence in business development is essential to fulfil strategic goals, but this competence is not widespread, as 60-80% of major acquisitions fail to add value to the organization.

Success at business development requires alignment and skill across the organization. The deal seekers have to be creative, personable and commercially grounded. The financial analysts have to be disciplined and open to new ideas. The operations people have to be terrific integrators. The executive team has to make timely and wise decisions under pressures of time and uncertainty. And everyone has to act ethically, strategically and with the best interests of the organization in mind.

Guidelines for Business Development

The issues faced by business development people vary with the organization’s experience, the financial capacity, the size of the deals contemplated and the organization’s risk tolerance. The following guidelines fit most business development situations:

  1. NEGOTIATE WIN / WIN AND WATCH YOUR BACK. The best deals offer real value to parties, and these WIN / WIN deals help build the relationships and reputation that lead to more opportunities. Make sure your side of the deal is solid commercially and that the relationship with the other party is strengthened through the negotiation.
  2. FEED THE HOPPER. You have to look at a hundred opportunities to uncover five serious prospects, and you have to explore many serious prospects to land a solid commercial deal. Keep your network active in order to keep the opportunity hopper busy.
  3. USE A DISCIPLINED EVALUATION PROCESS. Filter down the opportunities efficiently so that you can focus detailed evaluation work on high potential prospects. Discipline in evaluation increases internal confidence and credibility.
  4. THERE ARE NO BARGAINS. Rates of return always shrink as you get to know more about the opportunity. High returns always are attached to high risk. Focus on opportunities where your organization can add unique value to the acquisition.
  5. BUDGET FOR INVESTMENT AFTER THE DEAL. There are no bargains “as is” but you can build great value by investing wisely. One Fall Line client budgets an additional 100% of the purchase price for post-closing investment.
  6. DEBRIEF EVERY DEAL-WIN OR LOSE. Comprehensive debriefing of major deals is the best way to build your organization’s competence in completing deals that add shareholder value. Many firms talk about doing this, few bother.

Fall Line Systems has helped many organizations strengthen their business development capacity. Some examples:

  • Strengthened the effectiveness of business development teams in Emera Energy, Novagas Canada, Minerva Technology, TransCanada Pipelines and other organizations.
  • Built business development strategies with leaders from TransCanada Pipelines, TransCanada Midstream, XWave, Novagas Canada and other organizations.
  • Helped implement and / or improve the project / capital assessment process with NOVA, Emera Inc., Mobil Canada, Dome Petroleum and other organizations.
  • Led major deal debriefings for Emera Energy.

The following projects in our portfolio describe our work with Business Development: