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New References: The Changing Business Development Market (Part 2)

While the consulting sector has almost bled to death over the past two years, a few individual consultancies have shown explosive growth. This period has had a significant impact on almost all business segments. It is now clear to see whether a particular firm has taken a good or bad turn due to the crisis; it may or may not have been able to respond effectively to the extraordinary events. There has already been much speculation about which companies will emerge victorious from the pandemic in 2022. Of course, some sectors were already positively affected by COVID-19, as they were closely linked to the healthcare sector or directly linked to the product-service sectors needed during the pandemic. However, the consultancy sector was clearly expected by all to develop significantly, as when would there be a need for real professional advice if not during such periods.

Ageing references

The consultant’s professionalism is subjective, since a consultant takes the process up to the preparation of decisions, and the responsibility and operational implementation of the process is transferred to the businessperson who makes the decisions. For this reason, it is traditionally accepted not to expect concrete results from a business development project, but to start the process and to expect only support from professionals. “This market has changed enormously over the last decades, with the first major turning point being the 2008 financial crisis and the next one being the COVID pandemic. Advice is now essential in certain areas, and modern decision-makers know this well. That is why they have also spent more time in recent years getting to know this sector. And if you know the business development field, you will find clear benchmarks that perfectly demonstrate a company’s solid professional background”, said the MPG expert. In fact, one can see that the generational effects, the emergence of younger business decision-makers in the market, has brought a whole new approach to business.

First of all, today a CEO or business owner is no longer afraid to admit that they do not understand all management directions, so they certainly need support in business development, strategy, and organisational development. On the other hand, they also see that these backgrounds will not be solved by internal people, the company’s employees, as they cannot have the same breadth of knowledge and experience as the experts who have been involved in the development of, say, a hundred companies. The other important element in the change of mindset is to know exactly where the results can be found. While old-school professionals generally understood that references meant that the consultancy should give specific company names, or even businesspeople they had worked with, business decision-makers under 45 tend to have a negative attitude to a consultant who raises ethical issues by throwing names around. “Probably one of the biggest changes in the business development sector has to do with the management of references. For a modern businessperson, it is a distinct negative if a consultant tries to sell themselves by showing off scalps, because the new potential partner does not want to become bait for the consultant’s next negotiation. Another important aspect is that it is also seen as a weakness on the part of the consultant, because if they have to use this type of reference during a negotiation, it means that the consultant has not been able to convince the audience with their knowledge, i.e., trust has not been built up. Of course, it is important for a prospective partner to know what type of experience we have, but it is enough to know that we have been involved in the development of an international bank, a European HQ, or the management of 11,000 employees”.

Real measurement points

So what are the measuring points in a business development sector that can be trusted by those looking for new professionals? It is clear that good businesspeople should listen to their intuition, but if you are not generally a good judge of character, you should not try to convince yourself otherwise, because it will be costly and painful to wake up. “In our world, there are two steadfast points of reference for managing a company in the right way. One is the results of the company itself. That means revenue and profit. After all, a consultancy should focus on getting the most out of the business it develops. Revenue is an indicator of how much trust is placed in the company, how many people have placed confidence them. In particular, looking at or asking for revenue going back at least 2-3 years is a perfect indicator of the commitment to the company and the loyalty of their partners. When I chose MPG, I did the same as an employee. There is also an objective list, including the Financial Times’ list of fastest growing companies, which is calculated and published every year. In our market, for example, we are one of two business development firms on the European FT1000 list, based on the objective results from 2017-2021. This is also important information for me, as an MPG specialist: our partners are trusting us more and more. The other important measurement of a business development professional’s work is the international awards that require client testimonials, where they have actually looked into who has done what work. These international awards rank business development firms quite strictly. It is also very important to me that our founding CEO has been recognised by these bodies. For him and for us, it is not the award itself, but the partner testimonials, letters, calls, etc. that are required for it. It can be said that if a business development, organisational development, or strategic consulting firm is doing well in these two areas, they certainly can’t be doing a bad job for their partners.” – explained Kevin Vermillion.

As consulting is one of the areas that is in serious need of a post-COVID rebuild, as business decision-makers, we need to be aware of the changes in the sector, as well as the measuring points where we can get a sense of the real knowledge behind the nice-sounding rhetoric before we pay any serious amount of money to anyone.