BD professionals at one large biopharma practice both approaches. The commercial side of the company has specific BD metrics
that affect management incentives, while the R&D and manufacturing organizations do not. The BD group's ability to access
talent and negotiate effective support is relatively easy when department leadership has a BD metric in its bonus formula,
and significantly more difficult when they do not. This same BD group has also demonstrated the power of strategy development.
In 2005, for the first time, they devoted significant energy in the first quarter to developing BD plans for and with each
of the company's major business units. As a result, they perceive their 2005 BD pipeline as much more strategic than in years
past, and there has been a dramatic reduction in the time the BD team had to spend selling the merits of individual projects.
6. Combine Agility With Discipline
BD projects often move quickly, and can significantly change direction as new information is discovered. There is a natural
tendency to consider each project unique and view standardized processes as restrictive. There is an implicit assumption that
discipline can be exercised only at the expense of the agility needed for success. This is a false trade-off.
Discipline refers to a single-minded focus on the ultimate objective—to complete good deals for the company—and results from
a combination of mindset and process. Ideally, BD groups should be excited by the potential market opportunity, but also prepared
to reject a specific compound when appropriate. This combination of enthusiasm and detachment is one of the most important
attributes of an effective BD professional.
BD groups also need to have clearly defined processes, with explicit roles and responsibilities and associated project management
and influence skills, to ensure that appropriate decisions occur on a timely basis. The backbone of the BD process is a series
of decision gates with agreed-upon decision criteria, clear expectations for the appropriate levels of research and analysis
for each stage in the process, and the understanding that participants need to take positions based on the information available
to them at the time.
Agility results from quickness in recognizing changes in a dynamic situation, a readiness to be flexible on non-essential
factors, and the ability to make rapid decisions. An effective strategic framework aids speedy decision-making. But it is
also important to ensure that the process is not over designed, to impose the minimum structure necessary.
7. Manage Risks Intelligently
Every BD project has elements of risk: Successful BD teams have superior insight into the sources of risk and develop strategies
for reducing them without forfeiting the deal. This ability to both recognize and manage risk may be the single most important
differentiator between the winners and the also-rans. It enables the winners to minimize the number of costly errors. It also
enables them to capture the valuable opportunities that may not appear attractive at first sight.
The most common tool for risk management is sharing the risks with the partnering company and providing that company with
incentives to manage the risk. Smaller, high-growth companies typically have a greater appetite for risk than their Big Pharma
partners, so it is often easy to shift a substantial share of the risk to them, provided they also receive a proportionate
share of the upside. But there are other ways to manage risk as well. One is to build the development plan around known risk
factors to drive out risk early on. Another is to be ready to capitalize on upside surprises, such as new indications or product
differentiators beyond those that were initially contemplated.
Executing effective BD deals is an art and a science. There is no substitute for recruiting and retaining a cadre of experienced
and capable professionals. But building a sustainable advantage in BD requires even more in the way of active direction, investment,
and support from top management. Basing management's efforts on these seven principles can make the difference between exceptional
results and those that are satisfactory.
Rita Numerof is president of Numerof & Associates. Jack Nightingale is a consultant to the company. They can be reached at email@example.com