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Corporate Development as Business Process to Drive Value
February 18, 2019
Underestimated Influencing Factors of a Successful Corporate Development
April 24, 2019

Corporate Development: Typical Challenges for Companies

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Corporate Development seems to be an abstract and unapproachable concept for many employees. However, this department is crucial for companies, as it deals with the planning and development of important topics of the future. It encourages change in the company. It’s mission is to keep the company fit for future challenges. It is thus gaining importance in an increasingly uncertain and complex economic world. Nevertheless, in practice, corporate development is often lived differently from what we have experienced through our customers and through discussions with industry experts.

Picturing Business Strategies and Future Scenarios

In order to derive possible scenarios for the future and to be able to react to changes at an early stage, companies entrust some internally, partly externally conducted trend researches. In this context, the question of what the market will look like in the next few years and how customer needs are going to evolve, will be discussed.
An excellent corporate development is not characterized by deriving one single future scenario and hoping that this will occur, but by working through several possible scenarios and then going through them. For those responsible, it should be clear that not all future happenings can be covered.
To turn that into a strategy that will help you develop the best possible way within these scenarios is, in my point of view, … , the biggest challenge that corporate development ultimately has.

Matthias Joos, Robert Bosch Automotive Steering GmbH

The developed strategy should not only be in line with the elaborated future scenarios, but also with the internal corporate strategy.

Conciliating internal and external influencing factors of corporate development

A variety of internal and external factors influence corporate development. These include corporate strategy and corporate culture as well as changing market and customer needs, new technologies, megatrends and many more. Hereby it is important not to react on all recent trends and buzzwords, but to focus only on those that can have an impact on the company.
For example, if a company is already operating in the digital market, then digital transformation is not such a big issue to deal with as the company probably considers and lives these values in the strategy. However, if this trend has a direct impact on the customer needs, it must be taken into account.

The Corporate Development Ivory Tower

Another major challenge of corporate development often lies in the fact that the derivation of corporate strategies from future scenarios lies often in the hands of individual departments. As a result, too few and possibly not the right people are involved in the decision-making process.
Thus, a corporate development ivory tower evolves, where a handful of responsibles isolated from the rest of the company make decisions for many people or the entire workforce without really being in contact with those involved and without knowing their needs.
Internally, I often experience that you are not in touch with the operational units… You develop something, and you analyze something, and write nice papers and presentations, but you are not in touch, it’s not a co-creative process.

Bernhard Muhler, BludauPartners Executive Consultants GmbH)

Problems Evolving Through Challenges and Current Approaches of Corporate Development

Internal problems originate from the mentioned challenges and current approaches of companies, which complicate a successful corporate development and cause additional costs and double work. These problems can be summarized into the following three characteristics of departments dealing with corporate development:
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Slow & Inefficient

Huge amount of manual and time consuming work through spreadsheets and tools that are not meant for this work
Duplicated work due to uncoordinated internal and external activities
Internal change resistance
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Not Scalable

Internal resistance due to late or little involvement of employees and stakeholders
Development of information islands
Small focus on potential alternatives
No holistic corporate development datapool to work with
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Small Value

No transparency and thereby inadequate success measurements
Often changes in the market and customer needs are not captured
Employees’ capabilities are not considered in the company suggestion system
Companies have to face these challenges and problems in order to remain successful in the market and not being outdated by more agile competitors.
You'll learn more about this topic in our next blog posts and in our free whitepaper.

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