Should You Hire a Chief Business Development Officer / Chief Sales Officer?

Key Takeaways

• Relationship-Based Consultancy: Business development should focus on helping clients and understanding the company’s offerings, traditionally handled by partners.
• System Over Individuals: Establishing a business development system as a company asset reduces reliance on key individuals and mitigates acquisition risks.
• Effective CBDOs: Successful CBDOs are highly networked, costly, and focus on opening doors and generating leads, rather than completing sales.
• Integration and Coaching: CBDOs should integrate with marketing and sales processes and coach less experienced partners, enhancing their skills and networks.
• Investment Considerations: For investment or sale, a CBDO should be seen as a growth asset, integrated with the firm’s business development, and replaceable if necessary.
• Operational Focus: CBDOs excel at networking but often lack attention to detail for structuring sales processes.
• Mixed Outcomes: Success with senior business development roles varies, dependent on the partnership team’s capacity and the individual’s fit.

No….

The question of hiring a CBDO was one topic of discussion at our most recent Boutique Leaders’ Club. Most experts will answer ‘no’ to this question. Indeed, I used to.

The arguments against this type of individual are common:

• Consultancy is a relationship-based business requiring a deep understanding of your own offerings, how they deliver value, and how they can be tweaked for specific clients.
• Business development skills are ones that one learns through an apprenticeship in any consultancy, and, in any case, consultancies should focus less on ‘selling’ and more on ‘helping’. This is why business development lands squarely on the shoulders of partners.
• Consultancies should build a system for business development that is an asset of the company rather than relying on key individuals. The latter are perceived as a risk by potential acquirers and can hold the company to ransom.

But. But….

I, and several of the CEOs at the BLC, had all seen quite a few very successful examples of externally-hired senior business development ‘experts’. Indeed (shock horror!) a few of these didn’t even have a consultancy background!

Certainly anecdotally, the last two years have seen a significant uptick in these types of roles. A quick review of Google Search Trends shows a 70% increase in searches for the term ‘Chief Business Development Officer’ when combined with Consultancy.

Perhaps this is not so surprising: the last few years have hardly been a boom time for the consulting industry as a whole and most boutiques rely on relatively inexperienced partners who perhaps don’t have the ‘trusted advisor’ skills so prized in traditional models of consultancy.

So, What Do Successful CBDOs Have in Common?

First, they are highly networked, senior people with a strong reputation in their target client industry. These are more akin to the Chair role that many managing partners take on when they handover to a CEO who focuses on operational matters.

Second, they are not cheap. In fact, many are so expensive that generous payment-by-results terms are needed to ease the pressure on the consultancy’s cashflow (this also protects the consultancy against duds).

Third, they thoroughly, thoroughly enjoy the networking side of things and as a result, do not rely on the digital marketing funnel so beloved of internet ‘gurus’.

Fourth, they generally do not complete the sale but instead open doors, creating warm leads to handover to expert partners to follow-up.

So, How Should CBDOs Be Used?

Chief Business Development Officers (or whatever senior role you’re considering) should not be used to replace your traditional partner business development roles and processes.

Indeed, this person can be used as an aspirational role model for younger partners seeking to move beyond the ‘transactional’ approach to consulting sales.

This means, where possible, the CBDO might take on a coaching role for less experienced partners, sharing good practice and developing their skill-set and networks.

Moreover, this role should not be separate to your marketing and sales processes but should be integrated. Leads should be entered into your CRM and should be supported by marketing campaigns guided by the advice of the CBDO.

Partners should have visibility of BD activities and there should be clear follow-up processes which ensure leads do not fall between the gaps.

For those firms looking for investment or sale, the CBDO should not be perceived as a risk as opposed to a growth accelerator. If I am conducting due diligence on your firm, I will need to be reassured that this person is (a) replaceable (b) likely to stay post-transaction, and (c) integrated with the business development IP of the firm.

Despite the name, the CBDO is often not the person that will structure the sales processes of the firm. In my experience, these often gregarious and extrovert personalities are rarely combined with an attention to detail and financially, this is not necessarily the best use of their time.

However, they can help consultancies accelerate their growth, open doors that were previously closed, and upskill an inexperienced partnership team.

Summary

I’ve seen a LOT of ‘sales only’ senior roles go wrong. Usually because the person does not deliver, but also occasionally because they don’t gel with the existing owners, and a few times because they DID deliver, but then began demanding excessive rewards, including large slices of equity.

However, I’ve also seen, and heard, of senior business development people that have boosted growth, opened new doors, and up-skilled junior partners.

In part, it depends on the capacity of the partnership team at new business development, the difficulty of getting meetings with leads, the complexity of the services that are on offer and, most importantly, the person themselves.