Corporate Development:

The good, the bad, and the ulgy

 

Ever wonder what corp dev (corporate development) mean? What is it like working in one? And what does it mean to your career development? 

Ever think about what if I can’t break into investment banks, management consulting, then how do I develop skills and experiences that will take me higher in the future?

You do? Great. 

Today we have a guest post written by Jonny Chung, a veteran in the corporate development world that shares his experience and learning with us at CareerTipsHK.


What does corp dev do

I think every hotheaded graduate in HK (or those coming to HK for career) would put their pedals on the floor towards several industries – investment banking department (IBD), managing consulting, legal…(yawn). Let’s put aside the fact that more and more people are starting their own companies straight out of uni, where could people go if they can’t break into the “making-your-mom-and-dad-proud” industries that may help you to break into these positions someday down the track?

So you wanna work in IBD to do deals, and you might wanna work in consulting to do corporate strategy, have you thought about working on the deals as their client?

Corporate Development is the team or department working as an independent (usually) party within a company formulating the corporate strategy and executing inorganic growth and usually the team is formed by a team of ex-investment bankers and ex-consultants.

Well, sounds like we can still stay in the league even if you don’t make banks…blah? Let me try to pro con it for you:


Pros

(No, this is not what happens in cor dev)

Not the end of the world if you can’t make banks and consulting

For sure I can’t say you’ll do comparable amount of deals and learn comparable level of modeling skills as investment banking analyst will do, I can’t say that you’ll be exposed to as many different industries and business situations as a management consultant will do. But as a junior analyst in the corp dev team, you’ll get to do both.

On deals side, You’ll get to help evaluating investment opportunities, you’ll get to work on due diligence and most importantly, you’ll get to know what kind of stuff management would consider as important and what’s not cus in the end of the day, bankers also have to serve their clients (i.e. the company’s executives and your boss, head of corp dev).

On strategy side, you’ll help the team in convincing the management and business units to buy into the vision and strategy of your team and you’ll get to work on market analysis including market sizing, competition analysis, benchmarking…etc.

With these experiences, are you guaranteed to step in banks and consulting some day? Definitely not. Does it give you an edge to break in banks or consulting someday? Maybe.

Work with the best people in the company

One of the most attractive things about joining banks or consulting is that you get to work with very smart and driven people. Remember I said the corp dev team is usually formed by these people and usually these people are the best people you’ll want to work with in the company (at least, from deals and strategy standpoint) because their purpose is to generate growth to the company, whereas most of the people in the business units are primed to maintain the BAU (i.e. business as usual).

Less grunt work

Juniors in banks and consulting spend a good portion of their time in rushing through proposals, sorting out seniors’ CVs and other business development related works especially when the economy is bad. Since people in corp dev don’t have to constantly look for new clients, they have to do much less grunt works in this sense (except sometimes they might need to help to work on management reporting and budgeting works).

Learn the industry from the right perspective

In the end of the day, you’ll find out that it’s the people working in the industry that knows the best about the industry, like, how the business deals (not M&A transaction, I mean the main business that the company does to make money) are made, how each companies are competing with each others…etc.

When bankers care about how are the peers trading on the market, what the comparable valuation is, how the precedent transaction is like; and when consultants care about the size and scalability of the market, the positioning of the company and the segmentation of the target customer…etc.; who’s gonna care about what does the customer wants exactly?

Corporate development people care about all these stuff because in the end of the day this is what the board and the C-executives would care about as well. But you’ll have to look beyond the numbers and understand why a particular product or service are standing out through talking to the people in business units for their insights and more importantly, customers’ feedback.

Exit

From what I’ve seen and what I discussed with the people around the industry, most of the time people would stay in the corporate development / business development capacity in other companies (i.e. business development is assumed to be a “P&L bearing role” within the company such as the general management position of the entire business unit or region).

If the corporate that you for is acquisitive enough, it could give you a chance to switch into the private equity industry.

Examples are departing from a F500 media company to a very high growing gaming company, from a well-known conglomerate in HK to a real estate focused private equity, from a telecom player to hedge fund…etc.

But in the end of the day, it really depends on your prior experience, your personal focus and development outside of your work and most importantly, your NETWORK. Corporate development isn’t a position that could guarantee a structural ladder similar to banks and consulting, but it could give you a platform to build your skills and NETWORK as you’re the potential client for the bankers and consultants.


Cons

(No, this is not what happens in corp dev, neither)

Money

If you start off as a fresh graduate, be prepared to sustain a considerable period of “not-too-far-off-from-min-wage-salary” while your friends in banks, consulting and big 4 are having substantial increment when they’re moving up the ranks, internally.

Since you’re not the “billable staff” in the company, an increment of 20%+ would be quite exceptional for a corporate, and considering that people in corporate would usually start from a low base, you’ll realize that this job is not about money.

Bonus is another issue, just don’t expect to compare yourself to your friends in banks; but the bonus level is quite similar to those in big 4 and consulting.

Career progression

Usually there won’t be a clear step like “3 years as analyst and 3 years as associate”, nor clear and standardized KPI and performance management mechanism.

So progression in corporate could be even more of a matter of whether you can get along with the leadership of the company, whether you’re perceived to be “supportive” and “constructive” to the business and you’ll want to make sure that you can work independently and lead projects as soon as possible.

Training & skillset

There are usually lots of regular classroom training on both soft skills and technical skills relevant to your work in banks and consulting and they are really helpful to your personal development. But afterall, you’ll be one of the rare breeds in the corporate and most of the time corporate wouldn’t provide any formal training that you might want such as market entry analysis and financial modeling.

Therefore, the people around you in your team would be the most valuable sources of knowledge that you will rely on so you have to make sure that they have the right skillset by looking into their profile and the type of projects that they’ve been through in their careers.

Your value in the market

The reason why people out of banks and consulting are valuable is that their clients (i.e. corporates / PE alike) understand and could rely on the recruitment process, internal training and standardized practical experience these firms could provide to their employees but this is not the case if you start off at a corporate.

So you might wanna discuss with your friends in these professional services the way they work and try to compare yourself to the others.

Is that really easy to break in / find another corp dev that you want?

Well, let’s break down which type of companies in HK that offer a well established corporate development team or similar function that you’ll be interested to work with

  1. HK based / focused conglomerates and companies: PCCW, Swire, Cheung Kong, Hopewell, banks like HSBC, Hang Seng and other insurance companies, etc.
  2. MNC with significant presence / goals in Asia such as Telstra, Schneider Electric, Fox, Hilti, Johnson Electric…etc. The team of corporate development usually contains 4-6 people across levels so there are really 1 or 2 positions in each firm that would suit your level.

If you look beyond HK there will be choices such as the TMT companies in U.S. and PRC but the obvious obstacle is, why do they need to hire you over a local candidate?

(Find out more here: graduate jobs)


So how to break in?

(No, breaking in by picking up your boss’s secretary is not for everyone.)

Your personal networks!

Corporate development teams in HK are often called corporate strategy / corporate finance as well as corporate development, and usually there wouldn’t be a structural program like “Management Trainee” or “Graduate Analyst” program, your best bet is asking for your contacts / relatives / friends for job openings.

You might also want to be bold and reach out to the persons on these roles through Linkedin or other types of social media (just don’t be intrusive and creepy…), you can say things like “you have xxx type of background, skills and knowledge and you think you can contribute to their firm by XYZ”…etc. and keep the message simple and straightforward. It actually works because I’ve landed some interviews using this tactic previously (but I wasn’t a fresh graduate back then)

(Further reading: How to email any professional: templates & tips)

Work in other professional services first, then break into corp dev.

Assuming you can’t break into banks/consulting, and assuming you want to do corp dev for the strategy and investment experience; the next relevant career path is auditing (yes, it drains your life but it’s still a decent career if you can’t find other things that you want). 

Auditing would give you the skillset of understanding the financial statements of the company and it would be proven useful when it comes to the due diligence work of investment projects.

But the scope of work in auditing itself would not make you into a strategist or an investor so you’ll have to consciously make yourself aware of the big picture beyond the numbers as you work 20 hours a day.

If you don’t feel like corporate development, you’ll also have the chance to get into the transaction advisory services in big 4 and these people are often going to PEs as their exits.

Management Trainee Programmes?

I’m personally not a fan of these MT programmes because of the “rotations” that these companies always emphasize on.

Rotations within the company are definitely good for your development within the company because you go to different departments like sales, supply chain, operations, strategy…etc. but life is too short for some of the boring work and it distract yourself in developing some specialized skill sets (i.e. such as valuation and strategy related skills, for the sake of the context of this article).

But if you decide to get into these programmes with the hope of transferring to corporate development, make sure that you make the most when you get to rotate to the relevant department and make these personal contact counts when you get to choose.

(Find out more: What people don’t tell you about internship)


 
 
Final remarks

So after saying this and that about corporate development, does it mean that I’m gonna choose corporate development over other offers from Strategy consulting (note here: just strategy consulting, not general consulting) and investment banking as a fresh graduate? Honestly, hell no, I still think these “prescribed” path would open up more opportunity down the road, including being at least manager to director level at a corporate development position with the similar years of experience as if you start as a fresh graduate in corporate development. But if you’re determined to develop an impactful career, I think corporate development would be a viable second option because you’ll get to work with the leadership level of the company by nature and work with the ex-bankers and consultants that you could ultimately learn the skillset from and help you to move on to your next destination.

That’s about it for now, I wrote this article to share my insight developed through nearly 4 years in corporate development and transaction advisory. I hope this can help the career driven graduates coming out of uni to know more about your alternatives. Feel free to discuss anything I mentioned.

 

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