Using operational factors in order to define and execute the business development plan.

1. Business Development and
The Operational Component
1. In “business development” – as in any other endeavor
– we need a good plan, and we especially need The management team has to bridge that gap. They
“execution” if we are to reach our goals. The need to ensure beforehand that what is being SOLD
objective of this paper is to describe the role that can be DELIVERED – and this is the role that the
operational factors play in building (and executing) a Business Development Plan can fulfill.
business development plan. In addition, the paper
will introduce or reinforce the concepts of “effective” 4. Operational managers focus on “Effectiveness” and
& “efficient” in your business development equation. “Efficiency”. These concepts play a role in the
ultimate success of both the Business Development
2. My background is “operations”; those experiences and Sales functions –
influence my approach to business opportunities.
When my team identified a new service opportunity, a. Effective – this is the “quality” equation – deliver
we analyzed the opportunity and created the business the correct product/service to the proper place at
development plan using operational considerations. the appointed time. Effectiveness, in combination
with the agreed price, defines your current (and
3. Many of us have experienced the “creative tension” future) revenue. It defines your future because –
between Sales & Operations: i. Satisfy the client – orders (& revenue) are
⇒ Sales – “I’ve done my part and SOLD it; now all stable
you have to do is DELIVER it!” ii. Disappoint the client – orders (& revenue)
⇒ Operations – “Why can’t you just SELL the stuff will decline
that we MAKE?” iii. Delight the client – orders (and revenue) will
⇒ Sales – “Yeah, I know that [customer X] is never grow
satisfied and they never pay on time, but they
really need us to make this special, last minute b. Efficient – the correct product/service is produced
order …” [Operations – “This order will ruin our with minimal waste. Efficiency, in combination
schedule, make 3 other orders late, and cause about with the agreed price, defines your profit.
60 hours of overtime …”]
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2. Business Development and
The Operational Component
5. The real-life example related here is the start-up of a
“preventive maintenance service”. Mobile heavy a. The Market –
equipment requires regular preventive maintenance to i. There were several thousand machines in the
keep it in good working order. The service consists of territory –
fluid checks & changes, along with inspections, (1) Ages of machines – from brand-new to 20
according to a defined checklist. The company – an years & older
authorized dealership – had identified an opportunity (2) Usage of machines – from a few
to build a “Preventive Maintenance” (PM) Service in hours/season to 24/7 operations
Alberta. The opportunity was attractive because: (3) Machine types – from small skid-steers to
huge mining machines
a. Many clients wanted this service, since it would ii. Ownership (i.e. the customers)
allow them to concentrate on their own business (1) Dispersed – urban, rural & remote
(e.g. moving dirt) rather than machine (2) Diverse – Small companies with few
maintenance. machines to large multi-nationals with large
fleets of machines
b. Many machines were missing scheduled (3) Maintenance outlooks – from “run till it
maintenance, with resulting warranty disputes. breaks” to “planned & predicted”
The “customer relationship” with the dealership iii. Customer needs –
suffered as a result. (1) Up-time (i.e. minimal down-time)
(2) Time of day for service – some (e.g.
c. Timely inspections and fluid analysis will reveal construction companies) preferred end-of-
problems before failure. These potential (or day service
imminent) problems are opportunities to provide (3) Tracking & scheduling
follow-on service by the supporting Branches.
b. Operational Requirements –
6. In building the business development plan, our team i. Cycle Time requirements –
considered 5 primary factors: (1) On-site service turn-around time
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3. Business Development and
The Operational Component
(2) Travel time (to & from) the machine hrs/day vice 24 hrs/day – and the impact on
(3) Support time – personnel.
(a) Waste fluids disposal & refill
(b) On-boarding parts & consumables for the d. Service Support –
next service(s) i. Branch Support requirements – refill & waste
(c) Administration – collect info from disposal, staging checklist materials for
previous service, provide info for upcoming jobs (fluids, filters, belts, fittings,
upcoming service other consumables and parts)
ii. Vehicles & Limitations – ii. Corporate Support requirements – scheduling;
(1) On-board Volumes – lubricants, hydraulics, contract management; follow-up and
coolants – dictated the number and type of communications; sales support; standardized
sequential services our specialist trucks checklists for specific services.
could provide. Depending on the
customers’ machines each truck could e. Safety –
service 2-3 smaller machines or 1 larger i. The many “unknowns” on a job-site create
machine before replenishment. hazards for any person who is just arriving
(2) All of the initial specialist trucks were “on- ii. Simple, standardized process – “approach
road” vehicles. Customers’ off-road each machine like it is an accident site”
machines had to be moved to provide iii. Red-flag each and every safety condition or
suitable access. violation & immediately notify
(1) Customer – on-site supervisor, and
c. Personnel – (2) Department scheduler – notifies customer
i. The company employed a unionized work account manager; and notifies the customer
force. Seniority, shifts & changes all had to machine manager
be discussed & agreed.
ii. Maximize capital investment. Running the From these 5 factors we identified conclusions and
specialized vehicles – 8 hrs/day vice 10-12 developed our business development plan.
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4. Business Development and
The Operational Component
needs, required excessive travel times. Rural
7. Our “Outline Plan” for business development customers could be considered when certain
included 4 primary elements: conditions were met, e.g. similar machine
types and single locations for multiple
a. General. machine services.
i. Identify the target market. iii. Maintenance Outlook – it may seem self-
ii. Sell to the target market. evident, but we chose to focus on customers
iii. Provide effective service delivery that would with a proactive maintenance outlook, who
“delight the customer”. were most likely to want a preventive
iv. Grow the business – identify more locations, maintenance service.
and build a larger fleet. The ideal prospect, therefore, employed specific
machines with high rates of usage, working
b. Identify the Market – This was the essential first within (or close to) the relevant Branch urban
step. Instead of scatter-shot marketing to hundreds market (Calgary, Edmonton, etc.) and with a
of potential customers, our team identified 6-10 proactive maintenance outlook.
prospects in each regional market. Each prospect
was selected based on the likelihood that their c. Sell to the Market – Even though the prospects in
need matched our capability to deliver effective each region might be similar, we tailored our
service. Remember – a key part of the plan is approach to individual companies.
“delight the customer” as a prerequisite for growth. i. Identify the decision-makers and the
i. Machines – Different machines offer different influencers. Deliver the sales pitch to the
opportunities, e.g. light-duty or heavy-duty right people. We found it important, for
use, and the potential for follow-on parts & example, to get our message directly to the
service sales. We screened for customers Maintenance Manager of the prospective
with specific machines and heavy-duty use. firms.
ii. Locations – we focused on urban customers. ii. Continually re-evaluate the message –
Remote customers, while they had substantial determine what resonates with the potential
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5. Business Development and
The Operational Component
customer, and what does not. For example, 8. The Outcome – over a 14-month period we deployed
we discovered that “end-of-day service” really 15 specialty trucks into 6 regions (Calgary, Red Deer,
appealed to potential clients in construction. Edmonton, Grande Prairie, Fort McMurray, Prince
This factor had not come to light in our we George). Sales increased by ~65% per year over 24
hadn’t originally identified this; after several months (not counting follow-on service revenue).
prospective customers identified this factor, Healthy margins on sales were earned in all regions.
we amended our message to include this item.
9. In conclusion, there are 3 key points to remember –
d. Service Delivery – “Delight the customer” was
central to our plan for growing the business. To a. Market what you can deliver – never lose sight of
that end, our team focused on “operational the impact of your company’s “operations”. This
excellence” in critical aspects of the business: is the only way that your company can “delight”
i. We conducted effective daily & weekly your customers – the prerequisite for growth.
planning, to ensure that all scheduled services
were captured and prepared. b. Define and select the market segment carefully.
ii. We ensured effective coordination with Match prospective customers’ needs to your
service sections, customers, and Branches to company’s ability to deliver.
guarantee that last-minute changes were
identified and acted-upon. c. Maintain discipline in pursuit of the market – do
iii. Constant communications to ensure that . not be seduced by sales. There will always be
iv. Metrics, metrics, metrics … prospective customers that do not fit the target
profile. Capturing those customers will often lead
e. Grow the Fleet – This was derailed in downturn of to reduced operational effectiveness, disappointing
2008-09, and the subsequent departures of key performance with key customers, and reduced
leaders from the company. margins in the business.
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