It sounds obvious: every corporation is always seeking ways of further developing its business model. Those who are able to prioritize those efforts in an uncertain economy are the ones who leave a formidable mark not only on the industry in which they dominate, but the business and financial sectors as a whole. Of course, economies ebb and flow, but it’s about weathering those natural shifts. The only certainty? The fact that nothing is ever certain. What worked in 2008 may be the worst possible scenario for 2013. It’s about timing and bringing a corporate development effort full circle when the moment is right.
The challenges are different for each business; markets shift and risks emerge and evolve. Even today’s tax dynamics would be unrecognizable to the CEO of yesterday. While it’s absolutely crucial that corporate development first protect the corporation, questions about social responsibility, the environment and transparent business practices are now part of the game plan. Underestimating these elements is a risk no CEO can afford.
The success of any company, whether it’s a small business or a global corporation, must have protective mechanisms in place that will protect it. If the leaders can’t identify the various risks, there can be no realistic protections in place. How will the capital requirements change in the coming years? Can the business model accommodate those changes? Better still, is the company being led by those who are willing to step up to the plate and make those hard decisions when necessary? What a leader could have done in the past might not be a realistic approach today. Corporate development efforts often require a bit of a “fearless leader” mindset. It goes much further than simply having strong leadership abilities.
Corporate development isn’t a static effort; it plays a significant role in a corporation’s ongoing approach. As part of its strategy, a healthy organization may develop an internal corporate development team or may consider outside help in areas such as strategy consulting, tax structuring, legal compliance, financial considerations and marketing and operations.
Even with a solid business foundation in place; one that has served its purposes well over the years, there comes a time when corporate development is not only inevitable, but a welcome strategy.