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I'm Martin Reeves,
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Chairman of the BCG Henderson Institute.
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And I'm very pleased to be joined today
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for our Leaders on Imagination series,
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by Peter Gassner, who is the founder and CEO
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of Veeva Systems, which is a leading provider
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of industry cloud software solutions
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to the life sciences industry.
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Veeva's a very interesting company.
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It's consistently ranked
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at the top of the Fortune Future 50 index,
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which is an index that we pioneered with Fortune
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to calculate the companies
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which had the highest growth potential.
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And in fact, last year,
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Veeva was number two on that list.
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So it must have something special going for it.
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And I'm gonna try and decode that today with Peter.
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So welcome, Peter.
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Thanks Martin. Thanks for having me.
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So tell us a little bit about Veeva's business.
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So Veeva, we're a 14-year-old
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cloud-based enterprise technology company.
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We provide solutions to life sciences companies
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like Pfizer, Moderna and Lilly
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in both the R&D and commercial areas.
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So our customers, they make medicines, vaccines,
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medical devices
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and Veeva, we enable them with cloud technology.
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And with the growth of genetics and precision medicine,
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it's a really exciting time in life sciences,
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it's a time of innovation.
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And we're really happy to be part of that.
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Life sciences, as you know, is a very important industry
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to society and we take that role supporting it
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really seriously.
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And so in February, we became the first public company
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to convert to a public benefit corporation.
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So there's a lot of firsts there, Peter.
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First public benefit company
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and first industry-centric cloud solution company.
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Some very imaginative moves.
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What is business imagination to you
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and why is it important now?
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I think it's always important.
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It always has been important throughout history.
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But business imagination,
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it's the ability to create new ideas
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and turn them into business value.
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So creating ideas, that requires proactively seeking,
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you know, the adjacent possible,
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inviting the random chaos of conversations
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with interesting people, developing relationships,
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having meetings.
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Conversations that might not seem aligned and structured,
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those are the ones that can spark ideas.
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But generating the idea, that's actually the easier part.
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Executing on them, that's the harder part.
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Of the hundreds of ideas, I think you generally need to say
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no to 80% of them, focus on 20% of them.
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And if you have 10% success, you can count yourself lucky.
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In our survey work, about 90% of CEOs say that
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imagination is vital to renewing businesses,
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but they also, similar proportion says that it's very hard,
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especially in established or large companies.
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What is, what is hard about realizing business imagination?
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You know, CEOs, I think they're frustrated
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because they want innovation to happen,
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but it's not happening.
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And so that causes the frustration.
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Now, if we look at the why behind that,
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many management teams, especially larger
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and more established companies,
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they're focused on efficiency and,
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and they struggle to foster imagination.
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And I think if you have an imagination problem,
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you actually have a company leadership problem.
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And humans, you know, we're creative.
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Humans are creative.
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The ideas are there but management can stifle those ideas.
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The company itself and the management team
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needs to make space in their operating model for innovation.
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That means embracing chaos and inefficiency.
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And that's much easier said than done.
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So Veeva has been very successful at this so far
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judging by your track record.
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What are some of the approaches that you personally take
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as a leader to foster imagination in the company?
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First, we hire for diversity of thought
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beyond just race and gender, you know.
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Hire for diversity of life experience, style,
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diversity of location, that's key.
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People are the ingredients into the company.
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And then second thing, you need to make sure you have
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intuitive leaders that stay in the details
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so that they can sense opportunities.
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And then third, your company operating model
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needs to embrace the chaos and be okay with inefficiency
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as the price for innovation.
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So if you think back on the 14-year history of Veeva,
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what would be an example of a,
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a concrete example of an imaginative move
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you'd like to share with us and tell us how that happened?
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I guess one of the biggest one has to be
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the founding of Veeva.
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And that's why I think that imagination is in our DNA.
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We started with this very contrarian idea
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of creating a cloud solution
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exclusively for life sciences in 2007.
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And I can tell you, 99% of the people thought
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it was a bad idea.
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I was encouraged by that.
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I thought we could be first.
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But a more recent example would be
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spring of last year, 2020.
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We realized that COVID was really gonna fundamentally
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change things for the pharmaceutical industry
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and it could be a long-lasting change.
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And so of course we had hundreds ideas
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and we decided the right place to focus
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was an app, to make a new app that made it easier
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for people to participate in a clinical trial.
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And so we moved a senior person from another part,
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an established part of the business,
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a great person to lead this, this self-contained startup.
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And we allocated critical resources to it
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and we said no to other things.
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And from that, we launched My Veeva for Patients
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in February of this year.
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And now we have a whole digital trials initiative
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that could grow into a billion-dollar business over time
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and really change the world.
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But it really started with a decision.
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"Hey, let's take Steve and let him create a new team
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and let's see what happens."
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So having ideas is one part of imagination,
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but of course we have to translate those ideas into,
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into growth and value.
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Tell us about the executional,
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the physical part of realizing the value of imagination.
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Yeah, the hard part.
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You need to create an operational model
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for scale and innovation to grow.
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It's hard.
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You have to separate your innovation zones
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from your production zones from your core revenue producers.
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And these innovation zones,
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you need to give them autonomy to innovate,
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but also pick the right leaders.
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That's hard.
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And focus on short-term goals and learnings
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rather than revenue or profits.
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You really have to embrace the chaos
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and you worry about the alignment much later.
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That's how ideas are given the oxygen they need to survive.
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And if they survive,
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some of them will grow.
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If they don't survive,
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there's no chance for growth.
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So just one more question if I may,
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we discovered this very interesting relationship,
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which is for every doubling of age or size of a company,
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its growth potential decreases by about
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three percentage points on average.
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So it appears to be hard
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to maintain the capacity for imagination with scale.
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Do you, is that something you worry about?
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What are your thoughts on maintaining this capacity
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as you become more and more successful?
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Oh, I think about that a lot.
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I guess Andy Grove said only the paranoid survive.
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So I think about that a lot.
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We've done a good job to get to this point,
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but how can we maintain that innovation
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in 2025 when we have 10,000 people?
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So I feel we have to continue to value this autonomy
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over alignment, continue to push that.
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We have to keep our core values
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and we have to stress the need for change
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in operational procedures.
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Stagnation will kill innovation.
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You know, in this way we can run a big company
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that doesn't feel like a big company.
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And I think that's the best shot we have at it.
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Well, thanks very much, Peter.
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It's been fascinating.
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And thanks for sharing your insights
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on imagination and business with us today.
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Thanks very much, Martin.
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Thanks for having me.