The secrets of successful business development or the art of avoiding the hidden risks. Part I – The government

The secrets of successful business development or the art of avoiding the hidden risks. Part I – The government

The secrets of successful business development or the art of avoiding the hidden risks. Part I – The government

Business development per se is a creative and innovative process which, in order to be successful, at its core requires freedom of thought and freedom of action. Business development is about creation of wealth not about reliance or even worse dependence on outside sources of wealth.

When analyzing the risks for business development derived from dependence on government we look at the process of growth under the lens of the spirit of entrepreneurship. When not skillfully managed the imbalance between dependence on government and spirit of entrepreneurship creates risks for the integrity, innovation, creativity and above all the identity of a company.

Government dependence is a source of that nurturing feeling of falsely guaranteed growth derived from an illusory business opportunity. Why false? Because if a company relies directly on government contracting for more than 30% of its revenues or if its financial resources are indirectly derived from business operations with stakeholders heavily dependent on government financing, chances are in the long run (or even in the medium run) the comfort of this dependence will harm the ability of this company for optimal performance required for economic survival. Why illusory? Because the company has not created this business opportunity – it was one readily available on the marketplace and not requiring the ingenuity to explore new horizons.

Another form of government dependence exists when a company relies heavily on government support (national or of the host government) for its global/local expansion. In this case there is a high probability either that this expansion might not take the company where its strategic business development goals were designed to take her or that the newly established business operations will have to abide to the explosive mixture of co-dependent relationship with the local government. So what does this mean for the identity of the company besides all other components of sustainable business growth?

The hidden risks of government dependence are also related to the fact that a government dependent company de facto internalizes the country and political risks inherent to government operations and jeopardizes its strategy for risk management and mitigation. The transfer of financial resources from the government is also a transfer of risk and the rule of thumb is – the higher the dependence, the higher the associated risks and the lower the ability to mitigate and manage these risks.

Successful business development is measured not only by the capacity of a company to grow but also to outgrow oneself. The ultimate question in this process is: does your company control its future? While the answer to this question is the key for the success of your business it also implies that companies should rethink and redefine their relationship with government, diversify their pool of stakeholders, overcome the false comfort of illusory nurturing and decrease the government influence on their business operations/existence. We should not forget the founding fathers’ strong entrepreneurship and business astuteness, which set a world precedent of self-reliance and innovation.

“Image courtesy of Suwit Ritjaroon /”

Recent Posts:

Leave a Comment