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Business Development
Function Dynamics
Business development is evolving into one of the most important and challenging disciplines in business, as licensing and acquisitions (L&A) has become an essential source of growth and innovation. Increasing competition for a limited set of attractive products and technologies has raised prices, increased risk, and forced greater creativity in identifying, evaluating, and structuring L&A deals. At the same time, there is greater attention to external partnerships of all types, including co-development and co-marketing arrangements, as well as spin-outs and divestitures of non-strategic lines of business.
The heightened expectations and competition have raised the bar for business development teams. These teams still face the inherent difficulty of managing a highly dynamic process that involves many participants from a range of functions who have their own interests and objectives. Given the scale and complexity of L&A activities, the increasing need for excellence, and the ample opportunities for mistakes to occur, the need for strong and effective business development capabilities is greater than ever before.
Business Challenges
Building sustainable advantage in L&A requires Business Development teams to address a number of challenges. The first challenge is to fill their pipelines with attractive opportunities to evaluate and pursue. Many companies have completed exhaustive searches of available opportunities and remain frustrated at the shortage of serious candidates that meet their selection criteria. In this situation, the pressure for growth can lead some companies to pursue flawed or non-strategic opportunities that at best can distract from their focus and direction. Often, the root cause is a failure to bring sufficient creativity and insight to defining the company’s strategic growth platforms. Rapidly changing market dynamics give the edge to BD teams that have the best understanding of market trends and emerging business opportunities.
A robust pipeline is necessary but not sufficient for completing successful deals. BD teams tend to be understaffed for the size of their task. They can quickly become overwhelmed if they pursue too many deals in parallel, but they are also likely to come up short if they don’t keep a sufficient number of deals moving forward. Effective pipeline management making timely decisions on which deals to invest further resources on and which ones to winnow out requires highly competent staff and decision-making processes that are disciplined as well as flexible. Because so much of the necessary expertise is spread throughout the company, it also requires extraordinary powers of influence, both to get access to the right resources and to gain sponsorship within the executive suite, without creating the "living dead" projects that never seem to go away. Success depends on having a clearly articulated strategy for growth and ownership of that strategy by the executive team.
The challenges don’t end when the deal is closed. Integration carries significant risks for both acquirer and acquiree, as critical knowledge, relationships, and competencies can be lost, often in the name of capturing synergies. The reality is that many acquisitions end up destroying value. BD teams typically are not accountable for integration, but actions taken after the close can have a major impact on the results of their work. Many BD teams struggle with the need to define thoughtful, strategically-driven integration plans and successfully transfer ownership for those plans as part of the L&A process.
Our Depth of Knowledge
Success in today’s marketplace requires both great strategy and an integrated approach to the design and management of business development capabilities to make that strategy come alive. Over the last 20 years we’ve helped clients in a wide variety of industries address both the "what" of strategy and the "how" of implementation. Our services are intended to help clients design or redesign and implement business development capabilities that enable strategically important performance in the organization. And we help BD leaders build departments capable of delivering on their value proposition.
Our work with BD clients has involved multiple engagements and encompasses a broad range of projects, including the following examples:
- Developing robust pipelines by defining strategic growth platforms and identifying attractive L&A candidates that fit those platforms
- Redesigning core BD processes to improve pipeline management and decision-making
- Assessing and benchmarking BD team structure, roles, competencies, recruitment, and compensation to ensure competitiveness and alignment with the team’s mission and strategies
- Providing training for BD staff in higher-order competencies so they can more effectively evaluate opportunities and move them forward
- Preparing businesses for acquisition by reinforcing and documenting the critical systems and processes that support their unique capabilities
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