Bill Kerr: Covid-19 has made vaccine development and regulatory approvals front-page news. The pandemic has also underscored the value of resilience and adaptability. Remote and hybrid work models have helped drug makers and their partners step up their efforts. Cloud-based platforms and artificial intelligence have also sped the process. What can we learn from this stress test of the virtual distributed business ecosystem? And how can organizations help their highly skilled workers maintain work-life balance?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Bill Kerr. I’m joined today by Matt Wallach, co-founder and former president of Veeva, a cloud-based life sciences software company. Matt is a Harvard Business School graduate and continues on the company’s board of directors. On the program, we’ll talk about Veeva’s quick pivot to remote work, given its roots as a highly distributed organization, and its early adoption of video conferencing. We’ll also discuss the company’s approach to recruitment and retention in the highly competitive life sciences IT sector and its post-Covid return to work strategy. And we’ll talk about Veeva’s decision to become a public benefit corporation and what that means for its employees, customers, partners, and the communities where it operates. Welcome to the podcast, Matt.

Matt Wallach: Thanks very much, Bill. It’s my pleasure to be here.

Kerr: Matt, why don’t we start by having you tell us a little bit about yourself and what led you to co-found Veeva?

Wallach: Sure. So I grew up outside of Philadelphia and was basically a soccer player. And I was recruited to play in college and played at a pretty high level, and then went into business after college. Worked for a couple of years, and after business school, became a software guy and focused on the global life sciences industry. And in the first few years of my career, I was part of client-server software, kind of traditional installed software, becoming more and more verticalized going after specific industry segments. So that was something that I saw as a major trend. And then, after I was introduced to Peter Gassner, who really saw the same thing in his career, we thought it would happen also in cloud software. And that’s basically what has happened since we founded the company in 2007. But Peter lived in California, and I lived in Philadelphia. So we founded the company virtually, and we always had a virtual relationship. Less than 15 years later, Veeva is a publicly traded company, helping the pharma industry make the big shift to digital so companies can get new treatments to market faster and do a better job helping doctors get those treatments to the right patients.

Kerr: As a highly distributed organization, how have you decided who works where? And what’s been the role of the headquarters in that evolution?

Wallach: So in the beginning, headquarters was in California, near Silicon Valley, and it was really for product development—so the engineers and the product folks writing the specs so that they could be together in one place and iterate very, very quickly. And our finance and administration teams also grew up in headquarters. From the very beginning, our strategy, our sales, and our services people were always remote—to be closer to customers—because we were ultimately serving a global industry, and we needed people around the world so that we can make decisions quickly where they were making decisions. But very few people were required to be in the office every day. And the way that we started is really the way that we continue to think about things today.

Kerr: Matt, maybe we can start even pre-Covid with two of the questions that sit on everybody’s mind since March of last year. And the first is: How to help remote workers be effective? What training did you put into place? Were there any technological setups that you were requiring? And then second: We quickly learned that work-life balance can be hard to maintain in a remote environment. And so what has Veeva done or put into place to help foster that balance?

Wallach: Most skills training is virtual and self-guided, so a lot of online stuff, a lot of recorded stuff. But we do a number of things to make it easy to learn the culture and to appreciate the culture. So, for example, we don’t use outside recruiters. The hiring manager takes a very personal approach to getting to know every candidate from the time they’re sourcing them and screening them. We reinforce the culture as we hire. So a new employee doesn’t work for brand new manager. And we built our own internal employee networking platform. We call it OrgWiki. It’s basically our online org chart, so that it’s very easy to find and connect with people around the company. And in terms of work-life balance, we had a little bit of a unique start, where Peter and I were in our 30s and early 40s when we started the company; we had young kids; we wanted to get home for dinner. And so from the very beginning, work-life was an important thing that we were thinking about. And so what we learned is, people with specific schedules got respected. But, like, one of the things we do now is, there are norms around how you manage your calendar. And it is something that we had to deal with a bit with the move to everyone working from home suddenly and forcefully at the beginning of Covid, because for some people, it was, “Great, oh, I don’t have to commute anymore,” but that time was just spent working. And we had almost online classes and chat rooms and places that people could go to talk about best practices for separating your home office from your home life while still respecting that someone’s kids are going to run in and jump on their lap in the middle of a call.

Kerr: One of the questions, Matt, that often comes up is also around using remote to access distributed talent even beyond full-time employees of the organization. As you built up Veeva, what has been your approach to full-time versus part-time versus contract? And how does that staffing strategy link into the remote capabilities?

Wallach: So in terms of strategy, our overall goal was always to provide an environment where employees are treated fairly, they’re fulfilled by meaningful work, and they have the opportunity to grow in their careers. So that last one was always important to us. We wanted people to build careers at Veeva. And so we actually have very few part-timers, we have very few contractors. I think, relative to a company our size, very, very few, because it’s hard to help someone build a career that is lasting if they’re working two days a week or they’re a contractor with three other customers at the same time. Now, it’s also hard to build institutional knowledge if people are coming and going. So nearly all of our employees around the world are full-time.

Kerr: Now, let’s go back to that Covid moment that you mentioned. What was the adjustment that Covid required? And have you seen additional changes from where you were in March of 2019 to where you are today?

Wallach: If you go all the way back to the founding of the company, with Peter sitting in the office in California and me sitting here in Philadelphia, we learned how to do things remotely from the beginning. And one of the things that we tried to use a lot in the early days was videoconferencing. And it was always really difficult until Zoom came along. And Peter found Zoom. And we actually were one of the first large companies to adopt Zoom enterprisewide more than five years ago. And Zoom was actually a big part of our being able to deal with having remote people around the world. So we really didn’t miss a beat when everyone started working from home. When we did company meetings with hundreds or thousands of people, we didn’t do it in a big auditorium and then the people that weren’t in headquarters listened remotely. Peter and I and the other speakers were at our desks with one camera to one face, so that everyone around the world had the exact same experience in a company meeting. Another thing was that, if anyone was on Zoom in a meeting, then it was a Zoom meeting. So you might still get together in a conference room, but each person would have a laptop with a camera in front of them so that the person who was not in the room had the exact same experience of seeing everyone with high fidelity. And then we did some fun things, too. One of the things we did when everyone was working from home is, we started a kids-tutoring-kids program. So children of Veeva employees were tutoring other children of Veeva employees. We have all these examples of kids getting new mentors around the world. But I think overall, because we started virtually, the start of Covid did not disrupt us in a major, major way.

Kerr: Matt, what about your relationship with either customers or suppliers—and probably most likely, customers—in that presumably, a number of them were less familiar with Zoom compared to Veeva before the pandemic began? Has that relationship changed as a consequence of Covid?

Wallach: We actually introduced Zoom to a lot of our customers before, because we would insist on doing video calls instead of just audio. But the thing, that I noticed that was very interesting and unexpected, was we were afraid that projects would stop, companies would stop buying software because they were afraid of starting an implementation project, and that our business would slow and that their business would slow. And that really didn’t happen. In fact, we almost saw the opposite, where pharma companies are paying 2 million people around the world high salaries. These are very, very skilled, specialized people. Companies didn’t want to lay these employees off because of a disruption in going into the office. So they basically said, “You’re still on the payroll, you’re still working. You can connect remotely. Run the project.” And when you take out all the travel costs and all of the extras around business travel and running around and standing around the watercooler and commuting, you can get a lot done. And so we found projects were efficient. We also saw that decision making at some of our customers was even faster than it used to be, because it used to be that the executives were on the road half the time, maybe opening up a factory, shaking hands, kissing babies. Well, now they’re sitting in their home office. And something comes across their desk, it doesn’t wait until they land on the other side of the world to look at it. They look at it right away. So we didn’t see a big change in productivity with most of our customers. And the ones that were working on vaccines, they went faster than ever. And I think we were a good partner to them, because we already knew how to do it.

Kerr: Now, do you have any stories that tell us about some of the vaccine development?

Wallach: We don’t take credit for the vaccines happening so quickly. But if you want to run trials faster, you better get rid of the paper. And helping these companies to do things digitally and to do them just as fast or even faster when people are working remotely, that’s where we came in. And so we had a number of companies where the best projects, the best systems, were the cloud-based systems, the cloud-based projects. And for some of them, the majority of those were Veeva. So there was no disruption in any of the mission-critical applications that the pharma industry uses from Veeva.

Kerr: We thank both you and also the direct vaccine developers for getting us to the point where we can ask this next question, which is, we are all looking at a post-Covid return-to-work strategy right now. Is there anything particular that Veeva is planning for?

Wallach: Our post-Covid strategy basically is called “work anywhere.” So we started this during Covid. We thought that it might be a temporary option, basically allowing employees to have the freedom and flexibility to work at home or in the office on any given day. We decided to make it permanent, including the large engineering teams that are building this mission-critical software. So anyone at Veeva, anywhere in the world, can work from home, from Starbucks, or from an office on any day. For teams that need to work together, we group employees by team and location. But it’s basically time-zone related. So you won’t be put onto a working team with people more than one time zone away from you. It just becomes too hard. And that’s for things like product development. We still will maintain office hubs when employees want to get together, either for fun or for collaboration. We have a program where you can sign up for speed-networking sessions—it sort of simulates watercooler talk—where you actually get randomly selected with another Veeva employee, and you get 10 minutes to hang out. I think this feels like the future of work. It used to be that, in Silicon Valley, you would compete on in-office amenities—massages, people do your laundry for you, there’s free food. I mean, all kinds of stuff. I think the ability to work from anywhere can be a new competitive advantage for companies that do it particularly well.

Kerr: Matt, let me build upon that final thought about, what is the competition for talent. And if I think of the two markets you’re operating in—IT and life sciences—both are characterized by vigorous competition for top talent. So you’ve mentioned the work-from-anywhere component. What are other ways that you have approached recruitment and retention in this competitive landscape?

Wallach: So it’s always been competitive in Silicon Valley. The last 15 years have been like no other in California for technology talent. We decided from the beginning that we didn’t want to get into an arms race for talent. LinkedIn, Google, Facebook—they were always going to be able to pay more and have cooler amenities. So we decided that we wanted people to come to Veeva because they believed in our mission and they bought into the culture and because they wanted to see their work create tangible value for customers. So we have an equity program where, except with certain geographic restrictions, everyone in the company has stock. We have a 1% Giving program, where instead of making a decision on behalf of all of our employees and giving donations, we give every employee 1% of their salary to give to whatever nonprofits they would like to support. We’ve supported diversity from the beginning. We don’t make employees sign non-competes. And then, recently, we became a public benefit corporation. So there’s a number of things that we think make Veeva different. But it’s not that we can pay the highest salary, because that’s kind of a race to the bottom, ultimately.

Kerr: Let me just double-click on a couple of those. And I’ll start with the 1% Giving. It’s a very different strategy in terms of leaving it completely at the employee’s discretion. How did that come about?

Wallach: So Peter really believes that a corporation has a certain role in society. And one of the things that always rubbed him wrong was corporations making big donations and doing marketing around it. And while that wasn’t bad for the nonprofit receiving the donation, he always thought it was wrong that that corporation was making a decision on behalf of all the employees. We went a few years without giving any donations. And then, when we started the program, we matched employees’ charitable donations up to 1% of their salary, but we got some feedback that, for some of our employees, they needed that 1% of their salary. And in order to take advantage of it, they needed to give a donation. And not everyone was in a position to do that. So a couple of years ago, we changed the program so that you don’t have to match it; we will just give the equivalent of 1% of your salary. So it shows respect for the individual. And we thought that that felt like the right way to do it.

Kerr: And then the second one is the non-competes. In California, you cannot enforce a non-compete clause. That’s obviously a big market for you labor-wise. But more broadly, to take that stance—and oftentimes, the opposite side of the argument is that having non-competes allows companies to invest in employees—they can also be sure that their trade secrets are not lost to competitors. How did you come about that stance?

Wallach: So growing up in the life sciences IT market, I saw companies use non-competes as offensive weapons. I’ve competed against companies my whole career that basically scared their employees into never leaving. And it was damaging to the employee, and it was damaging to our customers, because it limited innovation. We hired some people early on, and their employers went after them like you wouldn’t believe. And it was terrible for those employees. And they were trying to protect things that were not trade secrets to that company. And they were also telling those employees, “We don’t trust you to be able to keep our secrets a secret.” We don’t support non-competes. We will hire you if you have one, unless someone has paid you to have it. And we’ll defend you if your old employer sues you. But in return, don’t take anything from your former employer, don’t use anything you learned from them that is a trade secret, and don’t take any files or anything.

Kerr: Matt, a little bit earlier, you mentioned Veeva becoming a public benefit corporation. I’d like you to first educate all of us a little bit on what are the basics of being a public benefit corporation, and then walk us through the decision to transform Veeva into one, and how has that affected your organization?

Wallach: A public benefit corporation, a PBC, is a different type of Delaware corporation. There are C corps—that’s the normal one. And in a C corp, the articles of incorporation state that the Board of Directors’ job is to maximize shareholder value. And that’s almost every company you think of. Now, we thought from the beginning that the sole focus on shareholder returns does not really work for society, especially as corporations become larger and larger and more powerful. So that never sat right with us. What a PBC does is, it has additional stakeholders at the same level as shareholders. So for Veeva, in our case, it’s our customers and the industry that we serve. It’s our employees—so creating a highly valuable place for employees to work and to build their careers. It’s our partners—so the companies that are working with us on behalf of our customers. And the communities in which we live. And that is written into the articles of incorporation. And we were the first and largest-ever public company to convert to a PBC, once they were public.

Kerr: Matt, is there an example or two that you frequently give about why being a PBC allows you to do something different than if you’re a typical C corp? So imagine you’re talking with another executive from a company, and they’re like, “Well, give me an example of when the rubber hits the road. What does this let you do that I can’t do right now?”

Wallach: Well, so we couldn’t have done this if we didn’t think it was in our shareholders’ best interest, because as the board, that was our job. So a couple of examples where this helps shareholders that may or may not be obvious … so Veeva has about 35 products that we sell to life sciences companies. So we could be the single-largest technology spend for a large number of companies. And if you didn’t believe that Veeva had your best interests in mind, you might reach a point where you say, “You know what? We give enough dollars to Veeva. If those guys get bought by Oracle, we’re in trouble. Or if Peter isn’t the CEO anymore, who am I going to trust?” So this codifies it so that we can look a customer in the eye, and when they ask us, “Well, how many eggs can I put in the Veeva basket? What if you take advantage of me?” we can say, “Hey, we’re a PBC now; we can’t take advantage of you. We’re not allowed. Our board won’t allow it. We’re not trying to grow by increasing our prices. We’re trying to grow by creating measurable value for you and other companies in the industry.” Another example is in working with the health authorities. This is a hypothetical example—this isn’t necessarily happening—but if the FDA were to come to us now, we’re speaking on behalf of all of our customers. And we have proven that we care about the industry, and we want to do things that help the industry. And in areas where we have high market share for something—for example, where a regulatory submission—all of our customers that use our product for regulatory submissions have to export all of the data and send it to the FDA through a gateway, an electronic gateway. Well, that could actually go away completely if we just gave the FDA a login to the Veeva Vault Product. Now, it would be highly structured with lots of security, but that movement of files is totally unnecessary if the files are already in the cloud. I think our ability to work with the FDA on something like that, which would literally save months in getting products to market, is markedly different as a PBC than it is just as a company trying to maximize shareholder value.

Kerr: Thank you for those great examples. Let’s turn to artificial intelligence. And with this backdrop of being a PBC, how do you think about AI at Veeva and also just in life sciences more broadly?

Wallach: So I actually think it’s similar for us and our customers. So for many industries, people look at AI as a way to replace people. For Veeva, that’s not how we look at it. We look at AI as a way to make our products work even better for customers. So we can automate repetitive tasks, because we know what the user is going to do next, and we can give users specific suggestions on how to be productive based on how other people use the product. And so we look at AI as a way to make our products more valuable to customers. And I think for our customers, the life sciences companies, it’s also not about replacing people, but it’s about using huge amounts of data to make those people more productive. There are numerous examples—in drug discovery, in drug development, in clinical trials, and in sales and marketing—where AI helps individuals make better decisions faster based on more data than they could possibly understand on their own. So I think that AI is an enhancer in this type of software and in life sciences more than a replacement of labor. I don’t think that’s where it’s going to end up here.

Kerr: Another big topic on many executives’ minds right now, Matt, is diversity and inclusion. And Veeva has, on both gender and minority representation, very high both worker shares and then also managerial shares. Talk to us about how you’ve approached diversity, and has that been also influenced by being a public benefit corporation?

Wallach: I do think that actually the events of 2020—a lot of the rallies that we saw and a lot of the unrest—that affected our approach to diversity more than becoming a PBC. We were deeply affected by that. And it made us look inward and ask ourselves, “Are we doing enough?” And that caused us to really reevaluate how we were doing. And we’ve put a lot of new systems in place. We have a chief diversity officer for the first time in the history of the company. And so it made us realize we actually had a lot more work to do there than we realized. And I think that that additional focus on diversity was good for us. I think it’s good for the world.

Kerr: Matt, maybe we can turn the remainder of the podcast toward thinking about both the company’s talent and workforce development strategies. Maybe to start with, since 2007, when you guys got launched—and admittedly, you got launched already leaning toward the cloud, where a lot of the future technology was headed—but what have been the most relevant trends in terms of workforce development and skills for Veeva?

Wallach: So I think a couple of technology things were very important. We were one of the first companies to standardize on Gmail. I think of Gmail as the start of Slack and these other collaboration tools. That’s a major, major trend. And I think seamless email on a phone with seamless chat on a phone and messaging allows you to have remote employees, allows, even, you to have a big building with people that can’t find each other to get stuff done quicker. I think that was a major change in workforce development. I think the other one was Zoom. I actually think Zoom was a game changer, and the clarity of video and audio on Zoom was a game changer and a major trend. And then, the one nontechnology one—just maybe a little unexpected—I think one of the biggest trends in workforce development since we started the company in 2007 is that Silicon Valley got overpriced. It’s so expensive to live around San Francisco now that it has created satellite cities that are focused on technology. It has limited the ability of companies that are based there to hire enough people, so they’ve been forced to go elsewhere. That region has priced itself out from reasonableness. And given that you have really good online collaboration and really good video calling, you don’t have to have everyone in Silicon Valley anymore. And I think that those couple of technology trends, with the out pricing of Silicon Valley, combine to be the most important thing that we saw in the last 15 years. And it’s the reason why we have development centers in other places, it’s the reason why we’re able to manage the company completely remotely when we need to, and it’s the reason why we’re able to put people close to our customers, which is really good for them and good for the industry.

Kerr: Over 15 years, of course, that skill profile will have changed and have required new skills to be learned. How have you been approaching reskilling, training, and also just broadly professional development?

Wallach: So Veeva is a little nontraditional here as well. We don’t put employees on really rigid career paths. We don’t have very detailed training regimens. Instead, we try to empower our employees to lead their own individual career progressions. So instead of having lots and lots of training or sending people to classes or having long offsites for training, we give every employee 2% of their annual salary every year to invest in developing new skills. And they use it for things like taking a class, for attending a conference, buying books, doing their own online courses. And we don’t have any control or limits on how they use it. So 2% of their salary every year to basically help to build their own skills. And it’s been hugely effective, I think. I think a lot of companies try to put people into too many boxes, and they’re a little too rigid in terms of things like career paths and things you need to learn. And we have found that employees are pretty good at managing their own careers when they’re given the right tools and time and access.

Kerr: Final question, Matt. For the life sciences, and your particular, obviously, IT space within it, what do you see is key future of work trends from here onwards?

Wallach: I think that our move to being a public benefit corporation is indicative of what I would hope would be a larger move by large corporations to think not just in terms of shareholder value. And I think that this becomes a future-of-work trend if people looking for a new job think of this as an important criterion: “I want to work for a company that isn’t just there for their shareholders.” I think people’s movement to companies that are more mission-focused and care more obviously about the environment and about each other, I think the millennials are going to force us in that direction. And I think that that’s going to be good. I think the life sciences industry, because of their focus on patients, in many ways is already there. And I think that the effects of the lockdowns during Covid, some of them are going to be permanent, where a lot of people who didn’t think they could work from home actually prefer working from home, a lot of people who hated going to the office are jumping at the chance to not return. And the companies that are able to enable that hybrid of people who want to be in the office and remote, I think are going to be some of the winners going forward. I think that is a forever trend, because commuting sucks, and if you really want to get a lot of stuff done, you can’t have 12 watercooler conversations a day. And some people just do their best work when they’re in a room by themselves. That’s why people have offices and why cubicles have walls. So I think those are permanent changes that Veeva has embraced. And I think it’s ultimately a competitive advantage for us. But I think that’s something that companies can’t ignore. This is not a temporary shift in the way that people want to get their work done.

Kerr: Matt Wallach is the co-founder and director of Veeva. He is also, in addition to his former soccer-playing skills, the minority owner of the Philadelphia Union Major League Soccer club. Matt, thanks so much for joining us today.

Wallach: All right. My pleasure. Thank you, Bill.

Kerr: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.