Earlier we discussed the issue of Bandwidth, and how understaffing can lead to opportunity costs (and opportunities lost). In this segment, we discuss the pros and cons of staffing/understaffing business development. We further focus on anonymity, a key tool for many companies to handle deal flow.
Some companies, such as Merck, have a well-organized team of scouts, organized geographically, with clear information available online stating exactly which types of opportunities are (and are not) of interest.
In other words, they address the Bandwidth problem through appropriate levels of staffing, coupled with clear communication of their ideal opportunities of interest.
Conversely, many companies actually maintain a much quieter approach to scouting, preferring to address the bandwidth issue by keeping their BD&L wish lists quiet. This way, so the thinking goes, companies are not bombarded with numerous opportunities that are not of interest.
It is this situation where external firms can play an important role through representation. An external firm can explicitly state on their web site, newsletters, and other communications a description of the type of opportunity their client is seeking, but without disclosing who the client actually is.
In fact, client identification can frequently be delayed until the consultancy has performed an initial assessment of the opportunity, thereby sparing the ultimate client the necessity of getting involved too early in the process.
This approach can work remarkably well when the client does not have a precise idea of what they are looking for, or when the therapeutic area of interest is very broad. This anonymity concept can also be combined with Geographic focus to sharpen the project and introduce a layer of efficiency to the process.
To put it another way, an external firm will have access to tools and capabilities that many companies will not or cannot use. Social media tools are a fine example of this. For example, an external consultancy can post a “wish list” on a company web site, then use tools such as LinkedIn, Twitter, and newsletters to “promote” this list and generate leads. Many pharmaceutical companies simply cannot do this due to disclosure or IT security concerns, or internal policies which prohibit the use of these tools in the work place.
Blending the two can also work well. That is, by having a published wish list & internal staff, a company can also use external consultancies to anonymously identify and assess opportunities which are just slightly off target, but nevertheless of potential interest. This can be a terrific way to dramatically increase the opportunity set without corresponding increases in internal staffing.