By: Vadim Kotelnikov


"In the new era of rapid change, no business is mature."

Business Development: Stage-by-Stage Guide Gestation Stage Start-Up Stage Prototype Stage Roll Out Stage Rapid Growth Stage Expansion Stage Maturity Stage

Managing the Five Risks you face at all stages of your business development:

  1. growth risk

  2. innovation risk

  3. market risk

  4. financial risk

  5. team & management risk

Turn Risks into Opportunities!




the company is established on the market; needs to innovate continuously to stay competitive


Organization: Decentralized

Management:  Professional

Technology: Integrated Systems

Funding stage: Asset-based






Growth Risk

  • Stagnation of operations and the complacency that naturally occurs as firms age

  • Mature companies often forget or forsake the thing that made them successful in the first place: a customer-centric business model They lose focus on the customer and start focusing on the bottom line and quarterly results. They look for ways to cut costs or increase revenues, often at the expense of the customer. They forget that satisfying customer needs and continuous value innovation is the only path to sustainable growth. This creates opportunities for new, smaller companies to emulate and improve upon what made their bigger competitors successful in the first place and steal their customers.

  • Resistance to change at both individual and organizational level

  • Detailed long term planning is difficult due to volatility of the market situation

  • Management left with little space for innovation due to the need to achieve short-term, yearly and quarterly results

  • Unbalanced approach to corporate strategy favoring efficiency and productivity at the expense of venture strategies


Innovation Risk

  • Shortening life cycle of technologies and products

  • Incremental features of product improvements add less and less value

  • Difficult, if not impossible, to predict the next major trend in any industry

  • Rejecting an emerging technology as it may be viewed as inferior to the corporate dominant technology

  • Elaborate approval processes favoring slowed product development cycles

  • Continuous innovation system

  • Intellectual property management system

  • Management of project portfolio and prioritization between projects

  • Top management participation

  • Ability to adapt quickly to changes in the marketplace

  • Culture incorporating respect for company researchers, who should be linked to the company's business objectives.


Marketing & Competing Risk

  • Growth rates and margins decline as markets mature

  • Competitor's fierce reaction to your global marketing campaign

  • Focusing attention to market standing relative to the competition's only narrows the definition of the market, leading the organization to ignore valuable market segments

  • Poor assessment of effectiveness and profitability of various marketing channels

  • Continuous market watch; anticipating the market needs

  • Maintaining and defending market position

  • Developing new market niches: seeking, expanding, global penetration

  • Reinventing market development strategy

  • Marketing partnerships



Financial Risk

  • Sustained periods of negative cash flow

  • No formal investment strategy

  • High risk of investment in strategic research and venturing into new areas

  • High cost of building competitive barriers

  • Operating costs reduction through  optimization of production systems

  • Shift from venture capital towards asset based financing

  • Strategic research cost sharing with alliances

  • Divesture of segments

  • Look at several measures of capital employment - not just one

  • Balance your risk capital investments based on technology area, industry concentration, geography, and other criteria

  • Work back to costs from what customers are prepared to pay

  • Reduce inventory costs by developing lean production systems

  • Explore opportunities for attracting international financing and raising funds from public stock markets

  • Explore opportunities for managing projects as spinouts

  • Raise additional cash from divesting from the low priority segments of your business

  • Enhance shareholder value by adopting a leading-edge reporting model

  • Upgrade you expense control system


Team & Management Risk:

  • Reduced communication & cooperation among functional units; poor teamwork and coordination across various functions of the company

  • Absence of integration for business and systems plans

  • Turbulence due to expansion of the managerial team

  • Changing focus; unclear strategy or many conflicting priorities concerning what's going on in various departments of the organization

  • A top-down or laissez-fair style of leadership on the part of management that is either too autocratic or too hands-off

  • Unhealthy competition for power; a relative lack of leadership or managerial skills in the organization

  • Control systems poorly documented

  • Management fails to engage the organization effectively

  • Measurements not related to success factors

  • Reporting not tied to management incentives

  • Poor vertical and horizontal communication: employees don't know what top managers are thinking; middle-level managers don't know what's going on in other departments

  • Highly structured reward schemes do not motivate employees to be more innovative

  • Establishment of management systems enabling better control, transparency, and customer relationships

  • Development of employee empowerment mechanisms

  • Development of decentralized management structures, with managers operating within a shared context that encompasses anticipation of future events that might have an impact on the industry.