Headcount is not a growth strategy

Every biotech reaches inflections where scientific or commercial progress requires the organisation to scale with it. Deciding when, where, and how quickly to add headcount is rarely straightforward.

In my 30+ years advising biotech companies, I have seen this pattern emerge repeatedly: a company raises capital, acquires a platform, enters the clinic, or begins generating commercial revenue. The Board knows that the next phase will require additional capability, so it starts designing the organisation it expects to need years ahead and, soon, future roles are being treated as current vacancies.

I understand the instinct. Appointing experienced leaders signals ambition, reassures investors, and can reduce execution risk. Creating a fixed “end-state” organisation chart reduces optionality, adds fixed cost and complexity before the milestone, revenue, or pipeline data exist to support it, while leaving talented executives managing functions whose purpose or workload has not yet fully developed.

When engaging executive search partners or preparing for scale, an understandable question is: How many people will we need to support the next stage of revenue growth? I would argue that the more useful question is: What must we be able to do next?

Capability should follow the next constraint, but be informed by strategic experts in the next phase

Leadership requirements change significantly as a life sciences company progresses. At discovery stage, the most important capabilities may be scientific judgement, translational discipline, and the ability to make difficult portfolio decisions while capital remains scarce. As a programme enters clinical development, the emphasis moves toward clinical execution, regulatory strategy, CMC, quality, financing, and governance.

Approaching commercialisation brings another transition. Medical affairs, market access, pharmacovigilance, supply chain resilience, and launch execution become central. A company entering several markets will require a different organisation from one commercialising a single asset through partners.

The mistake is to treat all these capabilities as permanent layers to be accumulated early.

A role that is essential at one stage may need to change substantially at the next. Equally, the leader who successfully takes a company into the clinic may not necessarily be the right person to build a global commercial organisation. That is not a judgement on the individual; the mandate has changed – and, if it hasn’t, the organisation has failed to meet its objectives.

Boards can be reluctant to acknowledge this because continuity often feels safer, and appointing an impressive executive can sometimes become a substitute for defining exactly what the business requires. But even the strongest candidate cannot compensate for a role designed around an imagined future rather than a present strategic need.

Fractional leadership is a strategic and execution option

Fractional or interim input can provide senior advice without baking in permanent cost before the long-term shape of a role is clear. It can also give a company time to understand what a function really requires before making a permanent hire, while preserving flexibility and limiting unnecessary dilution of the option pool.

The key is matching the employment model to the maturity and certainty of the requirement.

Benchmarks are a reference point, not a formula

We often use benchmarks to provide context for organisational planning. They can establish a credible range, but should guide decisions, rather than direct them.

Two companies generating identical revenue may require very different organisations. One may be highly outsourced, geographically concentrated, and managing a simple portfolio. Another may be supporting several launches, significant development activity, manufacturing oversight, or a complex global medical and regulatory burden. Revenue alone therefore reveals only part of the picture.

For example, for a commercial specialty or rare disease business generating approximately £100–150 million in revenue, around 175–300 full-time employees is a credible planning range. As revenue moves towards £200–400 million, approximately 350–550 employees may be more appropriate, depending on portfolio and geographic complexity.

The organisation should not automatically double simply because revenue does. These are directional ranges, not rules, but they expose an important principle: headcount growth should normally lag revenue growth unless a specific capability gap is constraining growth or creating material risk.

The first meaningful tranche of commercial revenue requires much of the essential backbone: finance, regulatory, quality, medical, supply chain, commercial leadership, and HR. The next tranche should begin to demonstrate operating leverage from that infrastructure, rather than requiring a parallel layer of overhead.

This does not mean delaying necessary investment. Underinvestment in quality, pharmacovigilance, regulatory capability, or supply chain resilience can create existential risk. Some expertise must be installed, or outsourced, well before a launch, submission, or geographic expansion because the capability cannot be built overnight. Investing ahead of a known requirement is very different from investing ahead of aspiration.

Every hire should answer a strategic question

Before approving a significant appointment or new team, boards should be able to answer three questions: What milestone, constraint, or material risk will this capability address during the next 12–24 months? What evidence suggests that the workload or organisational complexity is genuinely arriving? And does the capability need to become permanent internal headcount now?

A business does not have to choose between having a capability permanently in-house and not having it at all. Depending on its stage and circumstances, expertise can exist internally, be accessed externally, or introduced for a defined period. What matters is that the model reflects the work the organisation must perform, not the status it hopes to project.

We often use revenue per employee as a simple diagnostic. For commercial specialty pharma businesses, approximately £500,000 to £1.1 million provides a useful starting point.

Below that range, the board should ask whether the organisation is being constructed ahead of need. Above it, the question is whether the business is underinvesting in the control, quality, medical, and growth capabilities required to remain resilient. Revenue per employee is a blunt measure, but it prompts an important conversation about whether the organisation is appropriately resourced for its current scale and future requirements.

Build the company the strategy requires

The companies best prepared to scale are not necessarily those with the fullest leadership teams or the most impressive org charts, they are the ones that understand which capabilities must arrive next, which can wait, and which existing mandates must evolve as the scientific, regulatory, and commercial context changes.

Growth is not demonstrated by organisational size, but by the ability to reach the next value-creating milestone without introducing unnecessary cost, complexity, or execution risk. Boards should resist hiring for the “completed” company they hope one day to become, and instead hire for the next constraint standing between the business and its strategy.

Hiring at the right time depends on being prepared before the need becomes urgent. The window between a clinical or regulatory milestone, completion of a transaction or approval to launch or manufacture, and the point at which experienced leadership is needed can be remarkably short. That is why I believe strong talent markets and networks are so important to the life sciences ecosystem.

Boards, executives, investors, advisers, and specialist partners build networks through which experience and talent can move quickly when companies reach an inflection point.

The answer is neither to build the future organisation years in advance nor to wait until a capability gap becomes critical, but is instead to understand what the business may need next, remain connected to the people and expertise around it, and be ready to act when the evidence says the time is right.

About the author

Nick Stephens is executive chairman of The RSA Group and has spent more than three decades advising life sciences boards and leadership teams through funding, turnaround, and scaling.