Business Development Maturity

Introduction

Organizations that establish a strategy that supports business development and project management adaptability and innovation as strategic values are able to drive customer-oriented solutions. Organizational performance can be improved by sharing and reflecting on improvement efforts under way and integrating the perspectives of all those associated with business development and project management in the enterprise. Competencies in both fields then are extended across the enterprise, and management responses can be continuously adapted to meet the ever-changing needs.

The Business Development Capability Maturity Model (BD-CMM^®), and other business development assessment approaches involving Competition, Initiation Assurance, and Performance Management, recently have been prepared and are available in the marketplace. These models are complementary to project management, as business development maturity serves as the font-end to the Project Management Institutes' Organizational Project Management Maturity Model (OPM3^®), and together, they cover all phases of the project life cycle.

This paper describes the link between business development and project management in terms of overall organizational success. It presents highlights from the BD-CMM^® and other business development assessment approaches to show how they can in turn lead to process improvements in both business development as well as in project management. It also presents guidelines for consideration in using maturity models and for conducting a maturity assessment in an organization.

The Importance of Business Development to Project Management

Maturity, according to the Random House Dictionary, is defined as “full development or a perfected condition.” It also connotes understanding or visibility as to why success occurs and ways to prevent common problems. It implies that capabilities must be grown over time.

Numerous maturity models have been prepared, beginning with the Software Engineering Institute's Capability Maturity Model for Software. Maturity models provide a progressive standard to help organizations continue to improve their processes and provide a way determine the existence of realistic and effective policies and procedures.

In December 2003, the Project Management Institute published OPM3^®. Similarly in December 2003, the first edition of the BD-CMM^® was published. Business development is an essential part of any enterprise's efforts to succeed. It involves identifying and building relationships with new customers and creating new opportunities with existing customers. Through business development, organizations then can pursue effectively chosen and delivered projects that lead toward competitive advantage and sustained growth. The business development initiatives provide the basis for the portfolio of projects to be pursued by the organization. However, while business may fall into one's plate occasionally, no one can count on this to happen day after day or week after week without established and proven policies, processes, and procedures in place. It is necessary to understand customer buying problems, their value considerations, and their selection process. Strategies must be established to maximize the win probability and capture ratio and to be able to analyze the customer environment, needs, and requirements (Levin & Nutt, 2005).

As Eli Goldratt (1990, p. 34) noted in The Haystack Syndrome, “We must come to terms with an unpleasant reality: the more powerful the solution, the faster it might make itself obsolete. Ignoring this reality leads to only one conclusion – the powerful solution of yesterday might become the disaster of today.” To avoid this tendency, it therefore is necessary to forge a strong link between business development initiatives and project management to ensure overall success. By working to ensure maturity in both arenas, the strategies and vision of the organization can lead to a continuous stream of successful projects.

The Importance of Maturity Assessments

Maturity assessments, in both business development and in project management, are critical. They provide a baseline of where an organization stands in turns of defined best practices and serve as the foundation for continuous improvement as they help to identify organizational strengths and weaknesses and quantify the effectiveness of the organization's past efforts to improve capability. As noted by Larry Bossidy and Ram Charan (2004, p. 225), “Confronting reality is what business is all about.” Bossidy and Charan additionally state that you must ruthlessly assess your organization. Maturity assessments are organizational tools, rather than project-specific tools, and expand the scope from a single business development pursuit or project to the enterprise as success is highly dependent on how well the organizational environment supports and enables business developers and project managers to achieve success in their mutually complementary initiatives.

As stated in the Organizational Project Management Maturity Model Knowledge Foundation (PMI,2003, p. 5), “A ‘maturity model’ is a conceptual framework, with constituent parts, that defines maturity in the area of interest…a maturity model may also describe a process whereby an organization can develop or achieve something desirable…this process can result in a more highly evolved organizational state; in other words, a more mature organization.

Maturity models thus describe the key elements for a fully effective organizational environment, and these elements are then used for the purposes of benchmarking and evaluation. A comprehensive assessment additionally can identify and prioritize the steps the organization needs to take to improve its capabilities. The more mature organization is one that can manage processes, as there is an objective, quantitative basis for judging quality and analyzing problems. Roles and responsibilities then are clearly defined, and customer satisfaction becomes the norm. (Rad & Levin, 2002).

An Overview of the Business Development Capability Maturity Model

Business development maturity creates a vision of excellence capable of guiding major process improvements. The BD-CMM® provides its users with a framework, a path, and a guide for achieving process improvements in their organizations. Both a staged and a continuous approach are available with five levels of maturity with four key process categories. The themes of the four key process categories are increasing customer value, improving performance and synergy, building competencies and teams, and enhancing systems and processes. (Exhibit1)

The model's scope encompasses the full business development life cycle and organizational components, including advance marketing, sales, proposal development, and sales account management, acknowledging that no one component can exist very long in isolation, and that successes, when realized, are the orchestrated work of a team.

Exhibit 1

The BD-CMM® defines “levels” of maturity through which an organization must pass in order to achieve the next level. Each level is defined such that multiple areas of process improvement take place within the level, but each area's activities fall within the overall characterization, or definition, of that level. The definitions for each level are broad, to allow for a wide variety of organizational behaviors, but clearly describe a progression of increased maturity.

• The Initial level, characterized by ad hoc, chaotic processes and limited management commitment, evolves to the Repeatable level through introduction of a disciplined process. _Organizations operating at Level 1 rely on heroic efforts by a few talented individuals to craft approaches to customer requirements and respond to customer solicitations, while supporting them with virtually no resources and infrastructure.
• Once a disciplined process is adopted at Level 2, repeatability replaces the chaos of Level 1. For most companies, this process relies on individuals who have been successful in winning new business. At Level 2, the Repeatable level, interest in improving business development results focuses on the proposal management process and is most often embodied in what worked for one or more past efforts.
• The logical evolution from the Repeatable level to the Defined level is establishment of a standard, consistent process. For most companies, this transition moves them away from a proposal-centric approach a life-cycle process so that they focus on the up-front sales or capture effort and overall process integration as critical success factors. Level 3 practitioners emphasize the value of training, tools, and resources as process facilitators.
• The Managed level or Level 4 is reached by a process characterized as predictable. Companies operating at this level typically are highly focused on customer relationships as essential drivers for process, actions, and infrastructure. In addition, they understand that business development must leverage the full range of enterprise resources and greatly value high-performance teams as enablers to win strategic bids.
• The Optimizing level or Level 5 results from continually improving processes. Companies at this level are innovators in customer relationships, internal management approaches, and processes, as well as focused on managing ongoing changes in both process and infrastructure. Level 5 organizations are further characterized by business development entrepreneurship throughout the enterprise. This means that all employees accept responsibility to identify and champion new opportunities for business growth. Successful entrepreneurship is rewarded with professional growth.

A key characteristic of progression from level to level within the model is the increase in management visibility into the process. For example, typically, at Level 2, management maintains visibility between phases of the ongoing process – understanding at major milestones what has been accomplished to date, based on the quality of the outputs of that phase. At Level 3, however, the insights are enhanced to embrace rigorous two-way communication at major milestones within process phases.

The emphasis in the model on Key Process Categories (KPC) – Customer, Focus or Management, People, and Capabilities – provides a continuous framework to complement the staged model and to enable an organziation to concentrate on a category of interest. An overview of these KPCs is as follows:

• The Customer KPC is based on a desire to increase customer focus in the organization.
• The Focus KPC addresses how to improve business develoment performance and oranizational synergies through a management thread and a quality tread.
• The People KPC seeks to build competencies and teams within the business development operation.
• The Capabilities KPC plots a course for enhancing the systems and processes that must support BD operations.

The BD-CMM^® helps guide organizations in selecting high-priority improvement actions based on the maturity of their current practices. A key benefit from using the model is that it narrows the scope of improvement activities to those key practices that provide the next foundational level for extending the organization's current business development capabilities. By concentrating on a focused set of practices and working aggressively to install them, organizations can make lasting gains in their performance and competitiveness.

Other Business Development Assessments

Along with the BD-CMM^®, other assessments in the business development arena are available that can also complement project management (SM&A, 2005). A Competition Management Assessment, for example, includes all activities associated with identifying, positioning, proposing, and winning specific opportunities in one's area of business. This assessment evaluates how an organization:

• Identifies opportunities
• Establishes customer requirements
• Evaluates the competition
• Develops win strategies and proposal baselines
• Selects team members
• Influences the Request for Proposal itself

Once the project has been successfully won, the next step is a Transition Assurance Assessment to examine the plan for transition from the proposal process to contract performance. This must focus on facilities, processes, people, and tools and includes all activities involved with a start-up phase of a new contract. At this point, emphasis is required on understanding any contract changes that occurred during negotiations with the customer and preparing plans for the project kickoff meeting along with a briefing package for the project team. It is then followed by a Performance Assurance Assessment to examine the efficiency of processes required to perform on the contract noting the key processes that maximize award fee, meet critical project milestones, perform successful project demonstrations, and provide on-time submittal of contract deliverables.

Guidelines in Using a Maturity Model and Conducting a Maturity Assessment

Varghese (2004), however, notes that it is critical to target processes for improvement, as processes are not created equal. He further explains that quantum improvements in unimportant processes typically lead to insignificant business results, while small improvements in a critical process may lead to significant improvements in overall business success. He cautions that even with statistics that demonstrate the benefits of process improvement, some programs many end in failure. At times, some programs even have worsened business performance, triggering layoffs, low morale, and the loss of commitment to continuous improvement. This Varghese states is a “Process Paradox” (p. 13).

It is critical, therefore, in deciding to implement a maturity model, and in using its results to guide the development and enhancement of best practices, to ensure that people understand at all levels not only the processes that are the most important but also how well they are performing. The organization must be committed to the idea of a maturity model and to using it for improvements. It does not provide a quick fix for processes or projects that may be in trouble.

The organization is requesting an assessment. It is not an audit, and it is not imposed externally. For maximum benefit the:

• Scope must be defined – one level, one key process category, projects, programs, or portfolios
• Organizations involved must be defined – a department, a business unit, a sector, the entire organization
• The data gathering approach must be defined as well as the people who will be interviewed for their perspectives on organizational capabilities
• People must prepare for the assessment
• A kickoff meeting should be held to explain the purpose of the assessment, each person's roles and responsibilities, and how the results will be used (Lubianiker & Levin, 2001)

Once data are collected and analyzed, the data then should be verified with the sponsors to ensure that critical items have not been omitted. Then, the assessment report, and as appropriate, the maturity ranking, are prepared. Each recommendation in the assessment report should not be viewed as negative, but rather as an opportunity for improvement.

Implementation of recommended areas of improvement in the assessment report must be treated as a project with definite goals and milestones to be achieved. Process improvement cannot be done in one's spare time and requires a dedicated commitment throughout the organization. A Business Development Process Group or Project Management Office should serve as the lead and the focal point, as it typically will be the group responsible for the improvement program. A prioritized process improvement strategy is recommended as not all projects can be pursued at once. This can be done by considering the business impact, critical success factors, and any accompanying risks. The impact of the proposed project on the strategic initiatives of the organization must be considered. Structural areas, such as the number of people who will be affected and their level of involvement, must be addressed so that the people who will use the process are involved in its overall implementation (Rad & Levin, 2002).

Lasting change further requires individual and organizational commitment. As Varghese (2004) states, in order to resolve the Process Paradox, one must see how processes are selected for improvement and how strategies are selected for improving the processes. This supports conclusions reached by Jim Collins (2001, p. 98) in Good to Great, in the “Hedgehog Concept”, which states: “A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at. This distinction is absolutely critical”.

Summary

A foundation must be built for continuous business development success with a successful business strategy based on sustainable, competitive advantages. A similar foundation is required for continuous project management success. By forging a link between business development maturity and project maturity, an organization can position itself to be the best. The management of business development, portfolios, programs, and projects should be intertwined in a formal fashion with a culture that is friendly toward both business development and project management in a concerted fashion.