-: I'm Martin Reeves,
Chairman of the BCG Henderson Institute
and I'm very pleased today
for our Leaders on Imagination series
to be joined by Kristin Peck
who is CEO of Zoetis
which is the world's largest animal health company.
Thanks for joining us Kristin.
-: It's great to be here Martin,
thanks for having me.
-: So what do you make of imagination in business?
How would you define that?
-: For me imagination is bringing to life
a whole new world of possibilities
and the imagination is the beginning of innovation
and it starts with listening, watching, processing
the world around you in new ways.
I really think if you look at innovation
it's really the lifeblood of business.
-: And why is that particularly important now?
I hear a lot of CEOs stressing imagination.
Why is it important right now?
-: Well, I think it's always been important
but I think while you probably hear a lot of CEOs say
is it more important now
is because the pace of change is accelerating
and the cost of standing still is increasing.
I think the expectations of our customers just
for what their experience with this can be
for the innovation we need to bring, keep increasing
And we've seen
as you look at what happened in 2020 and 2021 with COVID,
the types of disruptions that we're seeing across industries
are just accelerating and therefore companies, CEOs,
leaders at all levels
need to really think about imagination and innovation
in whole new ways.
-: So our research on Fortune 500 companies suggests that
it's essential, regarded as essential by CEOs
but 90% say it's very important.
And also about the same number say
that it's actually quite hard
especially for large and established companies.
What are some of the things that get in the way of
taking an imaginative fresh look at your business.
-: It's sort of ironic Martin, the point that you make
because you'd think the larger you get
the more resources you have, the more risks you can take.
But I have found the same thing
that you've seen in your research
which is the larger a company gets, the harder it is.
And I think there's two main reasons why that's the case.
The first is the cost of disrupting yourself
just seems too great to take anymore.
So if you've become incredibly successful
at doing something in a certain way
or being attached to a certain product,
the thought of losing that,
of disrupting that and destroying that
just seems incredibly too high for many organizations
and therefore they think what got us here
will continue to get us there.
But I also think as organizations get larger
there's often more layers
and bureaucracy often sets in and it's much easier to say no
than to take a risk and say yes.
And as new disruptive ideas,
because they require imagination,
there's the counterfactuals you talk about in your book.
So there's no facts to prove they're gonna work
and therefore as you have to get through
lots of stage gates,
there's lots of reasons that someone can say,
"I'm not so sure that's gonna work."
And shut it down.
When you have a flatter organization,
and smaller,
the risks seem less and the cost of trying it seems less
and so counterintuitively,
it's actually easier for smaller organizations
with less resources to be more imaginative sometimes
than it is for large organizations
that really need to ensure
you ironically put process in place
to make sure that you can unleash the imagination
of the organization.
-: Well, Zoetis of course is a very big organization
but I know that the imagination is something
you talk about in your leadership team
and think about a lot and thought about a lot
especially during COVID.
What are some of the strategies and techniques
and leadership moves that you deploy
to keep imagination alive?
-: It is critical to a company like Zoetis.
We make medicines, vaccines, diagnostics and devices.
So we constantly need to be disrupting ourselves.
And I think it starts
with something you talk about in your book
which is being curious, being a frustrated optimist,
always asking questions.
Why did this work?
Why did this not work?
What could have worked differently?
And I think the second thing we really focus on
both in how we think,
what we read about and who we hire
is looking at diversity,
diversity of perspective.
So people who come from different functions
and even within the company
so as you put a team together
let's not have all the people
who are biologists or chemists,
let's have some manufacturing colleagues,
some commercial colleagues.
Really looking at a problem from different perspectives
but not just different perspectives within our industry
really looking at models of other industries
and how have they faced similar challenges
or what are they doing that maybe
we can learn something from.
So I think it's really looking at diversity of perspective.
And I think then the last thing we've really tried to do
and it's arguably never been more important
than it has been over the last year and a half
is taking time to reflect.
It's been such a stressful time where
you constantly had to be adjusting your operations,
in new ways constantly
which might've been a little bit of imagination
but it was tiring.
And taking a step back to look at your business,
to look at your product or your service in a different way
is something we've really had to remind ourselves for
certainly at Zoetis over the last year.
Take time to not just take a vacation
but to step back from the work you're doing
so you can look with a fresh perspective.
I think that's incredibly hard
for many leaders to do
when they feel like this is sort of 'always on' lifestyle
but as you talk about in the book,
I really think the ability to reflect
is absolutely critical.
-: Do you have a story for us
about a particular imaginative move,
a counterintuitive move that Zoetis took
and what is the story of how that happened?
-: I would actually argue
one of the greatest parts of imagination
that Zoetis has done
is the creation of our entire group of products
called monoclonal antibodies for animals.
This was really a cutting-edge technology
in the human space
and many people believed
it could never be brought to animal health
for a host of reasons.
I think the first of which really was that
it was gonna be a way too difficult
and expensive R&D process.
Then it was well manufacturing
you'll never get it at a cost that
a vet or a pet owner could really ever use.
And then even if you could
getting a vet to be comfortable
with an injectable monoclonal antibody meant
you'll be a very small market
so not terribly profitable
'cause really it would be specialists.
And I think what we did at Zoetis
was prove the industry wrong on every dimension.
And it was a significant risk for us to take,
to believe that A, we could develop products -
that when we did, those markets would be big enough.
In other words if it was just specialist
you can never have justified it.
And then we could produce it at a cost
that a pet owner without insurance
would be willing to pay for
and today that story we've proven with
a product called Cytopoint for atopic dermatitis
itchy sort of dogs.
We've also just launched two new ones
in pain for cats and pain for dogs
and Librela and Solensia
and created markets that nobody knew even existed.
Dermatology as a market didn't even really exist.
It emerged six or seven years ago
in the animal health space.
So I think it's sort of believing and taking a risk,
believing a market would be there
if we could come up with a product.
So I'm incredibly proud of that legacy.
-: Those two examples they'll probably both become
the new norm, the new ordinary,
was there a point where you took this apparently flaky idea
and said, "Why not?"
What was the turning point that said
"Maybe monoclonal antibodies could work
as a commercial business in animals?"
-: Well, I think it started with our scientists to be honest,
to believe that they could easily discover these
and that they could bring it
and that they have unique characteristics
and it was worth taking the risk.
So they believed from a safety and efficacy perspective
this new class of drugs would be a game changer.
And I think sometimes you're inspired
by someone willing to take a risk
so manufacturing decided they could figure it out
and get it at a cost that might make sense.
And then the last one which was really interesting
was the challenge of commercializing it.
Even if you could discover it, which we did
and manufacture it at a cost,
could you convince a general practitioner vet
who has to practice across specialties
to be able to prescribe
and actually utilize monoclonal antibodies.
Even if you look at human health,
this is generally not done by your primary care physician,
if you're getting a monoclonal antibody.
So it was really to believe
that something existed in animal health
that at the time really didn't exist in human health.
It was mostly in the purview of specialists.
And this was really sitting side by side with our customers,
getting a conditional license as we did on Cytopoint
and teaching them that the efficacy and the safety profile
was exciting enough for them to try it
and then holding their hand through the process.
And now they've been some of the biggest proponents
and accelerators of the space of monoclonal antibodies.
But I think it took each different group
being willing to take the risk and watching someone else
and realizing if they could do it
then they'd figure out a new way in each of them.
So it was I think probably a number of steps
that got us there.
-: That's a great story,
a great example of imagination, Kristin.
Thanks so much for sharing time with us
and your views on imagination today, much appreciated.
-: Thanks so much for having me Martin.