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