Scott Pollack - What, Exactly, Is Business Development?: A Primer on Getting Deals Done

Value is inherently subjective. Something that is highly valuable to one person like rare stamps or vintage LPs might not be valuable at all to someone else. To a collector, a rare book might be worth thousands, while to another it's just some old relic gathering dust on a shelf.

Value also isn't static. What's valuable to me today might not be valuable to me tomorrow. People will trample each other to buy the last remaining popular kids' toy on Christmas Eve, even if they know that the shelves will be stocked with them a week after New Years Eve. Before we can discuss the role that value plays in business development, we need to define the concept of value in a new way.

Think about the things that you personally value. You may value money, but chances are that you place an even greater value on the things that money allows you to do. Perhaps you value time with your family and friends. You may value the lifestyle you've created for yourself, the career you've built, the financial security you've worked for, or even your health.

Which of these represent "real" value? All of them. Value means something different to everyone.

The same is true for businesses. While every company wants to make money, each one has a unique perspective on what they value, and money may only be one of those things. Each business will see value in different terms. When you're thinking about opportunities from a business development standpoint, it's important to remember that every opportunity might create a different type of value.

Value wears many different hats, takes many shapes, and has many different faces. Let's take a look at some of the most important kinds of value for business development.

The most fundamental way that we think about value in the context of business is economic value. For instance, "Does it make me money?" Economic value is generally discussed in terms of revenue and profit.

It is completely fair to talk about the job of business development in terms of economic value. Things that generate profit and revenue are often great ways to generate long-term value for an organization. It's just as important to understand, however, that economic value is not the only form of value. There are other kinds of value that are just as important from an business development perspective.

Brand value is the overall benefit of changing the perception of the company in the eyes of our partners, customers, and prospective customers. One of the most valuable things a company can have is a strong brand identity, yet relatively few people think of the brand itself as a form of value.

To illustrate this point, let's talk about one of the best-known brands on the planet: Coca-Cola. Every year, Coca-Cola spends billions of dollars on marketing and advertisements. The goal behind all that spending isn't just to get people to buy more cans of soda, it's also to get you to associate their brand with everything and everything so that you are always thinking about Coke.

Generating brand value may not directly increase revenue, and in the short-term there may even be a non-revenue goal behind the branding push. This indirect approach may seem like circuitous path to increased revenue, but the ultimate goal is the same: Making money for the company.