Defining Leadership as a First-Time CEO
Janice Ellig, CEO and founder of Ellig Group, sits down with real leaders in this series of game-changing conversations, bespoke to fellow champions of change. Heralded by Bloomberg Businessweek as one of “The World’s Most Influential Headhunters,” Janice is often consulted for her expertise and her commitment to gender parity, equity, inclusion, and diversity.
We are honored to present this month’s episode of Leadership Reimagined with Kristin Peck, Chief Executive Officer at Zoetis, board director, award-winning leader, and a champion for your “companion.” Zoetis is a Fortune 500 global leader in animal health with $6B in annual revenue and more than 450% shareholder return since its IPO in 2013.
Tune in as Kristin defines leadership in her very first year as CEO and during a global crisis! Leading by example, first-time CEO, Kristin Peck, shares her experiences, successes and challenges and what it means to be at the helm of a Fortune 500 company, guiding it through 2020, an unprecedented year.
Kristin Peck credits the entire organization for its dedication to Zoetis’ core beliefs: “Customer Obsessed, Run It Like You Own It, Always Do The Right Thing, Our Colleagues Make The Difference, We Are One Zoetis.”
Kristin further elaborates on the belief that “Our Colleagues Make The Difference” in saying “when our employees can be their expanded selves, challenge ideas, innovate and not just show up, but strive. There is very little, in my view, that a company cannot achieve.”
Kristin was appointed CEO of Zoetis in January 2020 after she served as the company’s Executive Vice President and Group President, U.S. Operations, Business Development and Strategy. After spending her early career in business consulting, she joined Pfizer where she was Executive Vice President, Worldwide Business Development and Innovation, before leaving with the Zoetis spin off.
Zoetis has an award-winning culture, has been named one of America’s Best Mid-Size Employers by Forbes, and, under Kristin’s leadership, named one of the top 75 companies for executive women by Working Mother Media. In addition to the company’s accolades, Kristin ranked 15th on Fortune’s 2020 Businessperson of the Year list, in her very first year as CEO and during a global crisis!
It is with great privilege we present to you this episode of Leadership Reimagined “Defining Leadership as a First-Time CEO” with Kristin Peck.
Leadership Reimagined is available on the following popular podcast stations:
Show Notes: Kristin Peck
Kristin Peck on her path to leading Zoetis
Animals have always been an important part of my life. Even as a little girl, my family always had at least two dogs, sometimes four, one or more cats, birds, and so on. My family actually raised Morgan horses. My sister rode and made it to the National Finals. So whether I was going to rodeos that my dad produced or going to horse shows with my sister or mucking out stalls, animals were definitely a key part of my life. In fact, my first job in high school was for a company called American Equine Products, which, as luck has it, is actually a legacy Zoetis company. You could say I was destined for this job from the beginning, but to be perfectly frank, I don’t think I could have imagined at such an early age what a career in animal health might look like. It has been more amazing than I ever could have imagined.
Kristin Peck on Zoetis’s business and purpose
Zoetis makes vaccines, medicines, diagnostics, and nutritionals for pets and farm animals around the world. If you are listening to this podcast on your couch with your dog or cat, or if you drank a glass of milk this morning or had some eggs, we’ve affected your life in some way. About half our business is on the pet care side. The other half is on the livestock side. We are, as you mentioned, the world leader, with over $6.3 billion in revenue. We have 10,000 colleagues worldwide, and we operate in over 45 markets. Our purpose as a company is to nurture the world and humankind by advancing care for animals. About half of our business is in the U.S., with the other half of our revenue coming from outside. So truly a global company.
Kristin Peck on adapting to the pandemic
China is our second-largest market, so we started seeing signs of the pandemic even in January. I don’t think we ever could have imagined what it would turn into. But first and foremost, the biggest challenge was ensuring our colleagues’ safety. And that has remained our number one priority throughout our approach. Our principle is that colleagues need to be safe, but just as importantly, they need to feel safe. 70% of our workforce around the globe went remote, but the other 30% needed to be safe working in manufacturing facilities and distribution facilities to make those vaccines and diagnostics that were so necessary, and ensure reliable supply to our customers.
I would say the second challenge – and I always see challenges as opportunities – was the virus. And the pandemic was felt differently in different markets around the world. And the ways you manage a workforce, whether it’s a salesforce or a site, are quite different from country to country. So our approach to that problem was that we would have global guidance, but empower our local leaders to manage their own teams. And a major unexpected benefit of this “global guidance, locally led” approach is that it made us more adaptable as a company, more agile and able to meet the different needs of our customers and of our colleagues throughout. We obviously moved much more into online and virtual meetings, not just with our colleagues, but also our customers. Leveraging e-commerce, investing significantly in our digital evolution, and really thinking differently about our supply chain. Ensuring we could get products in and out of China in the first quarter was actually quite challenging. But those efforts turned out to be really important for us. We also changed how we thought about inventories to make sure that we could keep a reliable supply.
Again, 50% of our business is in livestock. And that meant in the pandemic, ensuring there was a safe, affordable food supply on people’s tables throughout the world. And so this was really important to us, and we’re quite proud of how we did that. And really, at the end, it was anchored in our purpose, which is to nurture the world and humankind by advancing animal care. We’ve always felt strongly about our purpose, but I would say throughout the pandemic, it served as a really important guiding light for our colleagues.
Kristin Peck on the secrets to Zoetis’s success
One of our core beliefs is that our colleagues make the difference. They come here for the purpose, for who we are. But I really think our performance –beating market growth continuously and delivering over 450% total shareholder returns since inception – really is because we’ve allowed our colleagues to bring their full selves to work. I think when they can be their expanded self and challenge ideas and innovate and not just show up, but strive, there’s very little, in my view, that a company cannot achieve. I’m also a firm believer that to have a delighted customer, there has to be an engaged colleague on the other side of that transactional relationship. An engaged salesforce is listening differently to its customers. It’s making sure they can meet those needs. It’s giving feedback to different divisions of the company on how we can further delight those customers. And when you have delighted customers, you have a profitable and sustainable business. If that is a company’s core belief, which it is for us, then you have to measure it and ensure you’re living up to it. So we’ve measured engagement since our very inception as a company. We have had a world-class engagement level in the high eighties to nineties over the last few years.
Beyond just measuring engagement, we’ve invested in two-way communication, which we’ve consistently done with surveys. But it’s also important to keep thinking differently about communication. Not just surveys, but also podcasts, videos, two-way emails. I respond to every email that I get from every colleague around the world, personally, not just when it’s someone on my team. And that’s part of our culture at Zoetis.
And then lastly, we also invest in programs, policies, and benefits that demonstrate to our colleagues that this is important. We have to be willing, as we learn new things, to evolve those benefits and policies. So for example, through the pandemic, we enhanced some of our benefits in things like child care, elder care, and tuition reimbursement. Most recently, we’ve also really been investing in wellbeing. How do we think about the mental health of our colleagues and what that looks like? I think a colleague has to be able to share their great days and their challenges and believe the company’s going to have their back throughout. That’s been incredibly important since our inception, and certainly during the pandemic we found new ways to invest in that.
Kristin Peck on DEI at Zoetis
We are fortunate that we’ve had a legacy of a diverse leadership team, which my predecessor, Juan Ramón Alaix, built. We were 50% women even before I took over, just to be clear. And it was important to Juan and to our board. And I think it goes back to what we were talking about before. If our core belief is that our colleagues make the difference, having a culture where everyone can thrive and succeed and they feel valued, heard, and respected is incredibly important because the challenges businesses are facing are really difficult. If you want to innovate and beat your competitors, being able to think differently about the challenges you face is incredibly important. And having a diverse set of colleagues helps you do that. We also serve diverse communities, and I think it’s important that our colleagues reflect the communities that we serve. So a greater range of voices at the table, I believe, helps us innovate and continue to lead in a world where the pace of change continues to grow.
Some of the things I’ve emphasized since I took over are investing more in DE&I, colleague research groups, new benefits, and really thinking differently about partnership with our communities. We’ve announced new partnerships with groups like Inroads and MLT to make sure we continue to do that, because at the end of the day, we want to make sure that Zoetis supports equity of opportunity both within our company and within the communities that we serve.
On a global scale, diversity means different things from country to country, but we firmly believe that an inclusive culture is relevant everywhere. Making sure that someone can bring their full, expanded self to work every day is relevant, no matter where you are. With the diversity metrics that we’ve launched in the United States, we announced over the summer where we currently stand and what our aspirations are. We are one of the first animal health companies to do so.
Kristin Peck on building a new culture and language at Zoetis
One of the exciting things as we were splitting off from Pfizer was that we got to determine our own culture. And when we were part of Pfizer, animal health performed very well. But we weren’t seen as very relevant to the overall company, given our size. So we wanted to make sure that when we split off, that we built a culture and a set of values that were relevant to our industry and to the people and culture that we thought we needed to succeed. So we started a global process, which actually took us many months, to form what we thought were core beliefs. Part of that was intentionally, choosing a unique language for talking about ourselves and our company that we thought would make people engaged, want to be here, have purpose, and matter.
One of those phrases I’ve discussed already is “our colleagues make the difference.” The second was “customer-obsessed.” Not just focused, obsessed. We were the first independent public animal health company of any size, and we were proud of that.
The next principle is to “run it like you own it.” Before we split off from Pfizer, the joke was, when we hit 4 billion, could we get more than one sentence in their earnings press release? But after the split, we decided that things we did before didn’t matter. Everything we did now mattered. Every colleague at every site around the world mattered. So let’s run this company like it’s ours, because it is.
The next one, simply, “was to do the right thing.” We’re making products that go in animals, whether they be our pets or whether they turn into food on our table. What we did mattered, and we had to always do the right thing.
And then lastly, and this has been really important, is “One Zoetis.” Our competition is outside the walls of this company. Together, we are one Zoetis, and we will succeed together. And we are here to support each other.
Kristin Peck on lessons from the pandemic
Given how differently the pandemic evolved in different markets around the world, we really saw that empowering our local leaders allowed us to adapt to local market conditions, or local site conditions. Moving forward, I think this is one of those areas where we need to think of new ways that we can give global guidance, but empower our local leaders to act because their markets really were different. I mean, if you looked at China in 2020, it was a very different situation than in the U.K. So global guidance on how we’re going to approach things when China is largely back to business as usual and you have a lockdown in the U.K.
The second thing we learned is that virtual engagement is more effective, honestly, than we thought it could be. I think there are significant opportunities now to bring more virtual engagement into the relationships we have. I personally really miss the ability to see my customers in person and to see my colleagues in person. And I don’t really think there’s any replacement for that. But I don’t think that I need to be on a plane as often as I was in the last few years for every meeting with every customer. Nor do I think our customers are going to expect that anymore. So I think it’s about understanding the right mix between in-person and virtual. It’s not just a cost issue and effectiveness issue, but a wellbeing issue too.
The last one, which I think all companies grappled with, was, what does an agile, efficient supply chain look like in the future? I think we’re starting to realize that some of our supply chains were too lean, to be honest. If you don’t have enough redundancies, these black swans or pandemics or things like that may come up more often. So we need to think differently about inventories and redundancies. We are looking at investing in ways to create a more flexible model for us across our supply chain.
Kristin Peck on work-from-home empathy lessons
The first one for me over the last year is being more personal and empathetic, and I would say, more vulnerable. I think it allows us to bring more humanity into leading our teams. The one thing about everyone seeing into your homes, into your kitchens, sometimes into people’s bedrooms via Zoom, is that you see a different side of leadership. And I think that the pandemic made it an expectation that leaders would be more personally empathetic. And I’m grateful that I don’t think this is going away. I think colleagues and customers, they want to feel you understand and appreciate their personal and professional lives and that there’s a balance. I think in the old world, it was almost as if we didn’t have families or pets or children. We were just at work when we were at work and at home when we were at home.
I’m a mother and a wife, and you see my children come through every once in a while or my dogs barking. And that’s just reality. But we’ve also seen so many families face different challenges. And I think being able to understand that, to empathize and to be more flexible about how we manage our colleagues is incredibly important, at least for me. I felt like over the last year it’s been helpful for our colleagues to see me as a mother and see me in my home and the things that I have to balance too, and to share that. And I’ve been really careful to make sure that I am listening to what’s going on in colleagues’ lives, that I’m noticing those things. And that if I feel someone’s having a challenging day, that I’m reaching out. Colleagues and leaders had been more reluctant to show that vulnerability at first. But I think being able to do that more is going to be incredibly important.
Some of these issues around wellbeing are ones that I don’t think CEOs are always comfortable talking about. But I think it’s never been more important. I think it’s actually one of the greatest challenges corporations and organizations have moving forward is how to support our colleagues, our customers, in our communities through these times.
Kristin Peck on business leaders’ role in addressing social issues
I think that people’s expectations of business leaders have really changed over the last few years, and I think they’ve changed for the good. I think there’s an expectation now that colleagues want to work with companies who share their values and they want to work for companies that shape and serve a social purpose in addition to the business purpose. And you’re seeing this come out around many of these social issues globally. The solutions to so many of the challenges we’re talking about around equity and inclusion, these are problems that require multiple stakeholders to engage, where you have to find a way of identifying a common ground. And I think corporations are part of this. If you’re going to create greater equity of opportunity in the U.S., you need corporations. You need to think about jobs. We need to think, as a business in animal health, how do we create more equity of opportunity around the health of pet owners of different backgrounds? So I do think in every business, you need to think about first, what are those social issues that are really important to my colleagues, what are the ones that are important to my customers and therefore my communities? And what’s the unique role the company can play and that each of us as CEOs can play? And I think what you’ve seen over the last year are some of my fellow CEOs really stepping up and talking about the role of the company. And I think there’s an expectation from colleagues that leaders are going to speak up on some of these issues. And it’s not to be partisan, but it’s to say, I share your values. These are important things. And Zoetis, as a company, or whatever the company is, can contribute to improving this issue. And I do think this is going to be expected of corporations going forward.
Kristin Peck on sustainability in animal health
Sustainability is incredibly important. One of the values that I think matters to our colleagues, matters to our customers and matters to our communities, is to nurture the world and humankind by advancing animal care. So we’re fortunate to start with, as you think about sustainability and food supply, you know that our business purpose is really a social purpose and it speaks to many people. We’ve always sort of done this in the background, but one of the things that I’ve been focusing on with my leadership team is to formalize those strategies that we’ve had over the last few years and some of those programs and to start measuring sustainability, because just as was the case with diversity, equity, and inclusion, we had it, but we needed to measure and publish it. So we were the first animal health company to issue a comprehensive ESG review based on the leading frameworks out there.
We’ve created three pillars where we think we really uniquely contribute on sustainability. The first is around care and collaboration. And this is around our colleagues, our customers and our communities. Certainly in natural disasters, Zoetis plays an incredible role in product donation, bringing veterinary care to wild animals, livestock, you name it. The second pillar is around innovation in animal health. This is critical because 70% of the infectious diseases that affect humans are zoonotic, i.e. they have an animal origin. To reiterate, 70% of infectious diseases are zoonotic. In other words, they can move from one species to another. Well if you look at the pandemic we’re facing, it was certainly zoonotic. So we need to be innovating to create better efficiency and more sustainable farms, but also address some of the real infectious diseases in animal health that have a huge impact on human health as well. And lastly, it’s protecting the planet, making sure the way we operate our business, in terms of carbon, water, you name it, is improving year after year.
Kristin Peck on being a “frustrated optimist”
I call myself a frustrated optimist. Some people love it, and some people don’t really get it. What it means is that anyone who knows me knows I’m an optimist at heart. I think part of that is just believing in a brighter future. It’s also believing in positive intent. I believe there’s always a better way that we can do things and I don’t think we should just accept the status quo as good enough. The world is constantly evolving. The needs and expectations of our colleagues, of our customers are constantly changing. And so I think having an attitude that’s positive, that sees the challenges we face as opportunities, sees the uncertainty in situations, again, as an opportunity, is really important. And I think as a woman, I’ve been optimistic throughout my career that I could achieve more and get there and that I wasn’t going to be comfortable or happy with just wherever I was. So I think about it both personally and in terms of my own development as a leader, as a mother, as a wife. But I think it’s really important for organizations as well to never just accept the status quo, to constantly be looking at how they can provide better experiences, greater innovation. So it is pretty fundamental to the way I think about my leadership.
First and foremost my advice is to do something you love because you’ll work so much harder at it. I think what’s challenging for many women, and certainly was for me, is that if I’m ever asked to choose between my family and my job, my children and my family will always win. But my husband changed the way I thought about that seven to ten years ago, when I was offered a big opportunity. I came home and said, “I don’t know if this is going to be possible. I mean, how am I going to manage my two children and all these responsibilities?” And he said to me, “I think you’re asking the wrong question. Instead of asking if, ask how. How can we as a family, how can we, as a team, work? I think if more women asked the question “how” instead of “if,” there’s little they can’t accomplish. So if you do what you love, and you believe that you will find a way – you’re a frustrated optimist – it will work out, and there is a way. If we just think differently about this challenge, there’s really very little, I think, that women and men cannot achieve.
Kristin Peck’s parting advice
From a leadership perspective, I would encourage people to be frustrated optimists. I do think there’s a bright future. There are certainly lots of challenges and uncertainty, but really those are opportunities for each of us to think of new ways to innovate and to delight our colleagues, our customers, and our communities. But I think as you look ahead, it’s really important that we find ways to create more flexible and agile organizations, because there is still great uncertainty and the ability to empower our leaders and to pivot quickly has never been more important. If you look at some of the changes in consumer behavior during the pandemic, no one could have fathomed that, and it means organizations just need to be a little more flexible. But the big thing that I think leaders need to focus on is that it’s not all about efficiency, that in the end, humanity is incredibly important. Customers and colleagues will stay with companies they think value them. So I hope we don’t get to a world where everything becomes virtual and online, because at the end of the day, I think so much of the value that we can provide each other is some of that human interaction.