00:00:00 Crap.

00:00:17 What is this crap?

00:00:21 We're all busy.

00:00:26 Aren't there more important things to do?

00:00:28 This is a total waste of time.

00:00:32 Just now, we just got good news.

00:00:35 Things are going.

00:00:36 People are busy with 950.

00:00:38 People are busy with 702.

00:00:39 People are busy on kinases.

00:00:41 People are busy on lots of things.

00:00:44 We don't have time for this crap.

00:00:47 Those overpaid Vertex executives got nothing better to do than to drag us all in the rain

00:00:55 in the winter to the MIT hotel and waste their time.

00:01:02 This must be some HR plot.

00:01:09 Wrong on all counts.

00:01:13 What we're going to do over the next hour is talk about the most important things that

00:01:20 we have to pay attention to over the next couple of years, which is the vision of the

00:01:30 company and how we put that into practice.

00:01:32 Today is the first of three phases.

00:01:35 It's the rollout phase.

00:01:37 If you don't pay attention in the rollout phase, that's your loss.

00:01:46 The embed phase is where the rubber meets the road because in the embed phase, we're

00:01:52 going to talk about how what we talked about today actually is going to matter to your

00:01:57 pocketbook.

00:01:58 If that hasn't gotten your attention, I don't think anything will.

00:02:04 I suggest it's an exciting thing to pay attention to today.

00:02:10 This rollout phase is going to be over today.

00:02:14 The embed phase is already underway.

00:02:17 The sustain phase, where we keep this going, lasts forever.

00:02:22 This is a beautiful day.

00:02:26 It's the first day of the rest of our lives with the vision of the company aligned with

00:02:32 everybody in the company.

00:02:34 Our core purpose is to, and I'm going to explicate this in some detail, to innovate, to redefine

00:02:41 health and transform lives with new medicines.

00:02:43 You've probably heard that before or seen it before.

00:02:45 We haven't made a big deal out of it, but it's been around.

00:02:50 Innovate does not mean just novel.

00:02:53 Innovative is not just novel.

00:02:54 It's not just new.

00:02:56 Innovative has the connotation also of something that is needed and wanted.

00:03:01 It's not just novelty.

00:03:04 It's something that has a value.

00:03:06 Innovate to redefine health, the most strangest phrase in this core purpose.

00:03:11 What we're about is not just making pills for diseases, even if they sell.

00:03:16 We're actually trying to change what it means to be a person with a disease or a person

00:03:22 of a certain age.

00:03:24 My example is 30 or 40 years ago, there wasn't anybody in their 70s who considered that as

00:03:34 they got to their 70s, they'd still be doing vigorous physical activity.

00:03:39 I think the assumption of all of us is, absolutely, I'm going to be out there vigorous with my

00:03:43 faculties and scuba diving and mountain climbing and stuff like that.

00:03:49 That's because medicine over the last 30 or 40 years has redefined what it is to be 70

00:03:54 years old.

00:03:55 Now, we're not perfect yet on that redefinition, but we as an industry have changed what it

00:04:02 is to be 70 years old.

00:04:05 You change the prospect over the last 100 years of parents and children.

00:04:11 Parents used to have six, seven, eight children because two or three of them were going to

00:04:16 die on average.

00:04:18 Maybe four or five of them were going to die.

00:04:19 That's not the presumption anymore.

00:04:22 Medicine has redefined health.

00:04:24 We need to continue to redefine sickness and disease.

00:04:29 Are you a cancer patient or are you just a regular person who happens to have cancer?

00:04:33 That's a redefinition of health.

00:04:36 Transforming lives.

00:04:37 It's not just about taking a pill and forgetting about it.

00:04:40 It's about actually that medicine transforms someone's life.

00:04:46 Without it, their life was different.

00:04:47 With it, they feel transformed and with new medicines.

00:04:52 Medicines is what we do.

00:04:54 Innovate to redefine health and transform lives with new medicines.

00:04:58 You can unpack this a little bit.

00:04:59 By the way, you almost never show your core purpose outside.

00:05:03 I don't think we will destroy Yamaha ever got outside of Honda.

00:05:09 Sometimes you do unpack it a bit and describe it as a positioning statement.

00:05:13 We've actually made the positioning statement version as well, which is to those invested

00:05:18 in health.

00:05:19 That's a cute little pun.

00:05:21 We're all invested in health and investors invest in health.

00:05:24 Get it?

00:05:25 To those invested in health, Vertex is the innovator of new medicines.

00:05:30 The innovator.

00:05:32 Not one of the innovators.

00:05:33 Not one of 50 innovators.

00:05:35 The innovator of new medicines that transform lives.

00:05:39 Transform lives again.

00:05:40 We succeed.

00:05:42 Why should you believe this about us?

00:05:44 We succeed by applying our passion for science.

00:05:47 It's a passion for science that drives us to the challenges of disease.

00:05:52 Challenges.

00:05:53 We go after problems that are challenging.

00:05:57 That tells you a lot about our core purpose in a positioning statement.

00:06:03 What's the BHAG for Vertex?

00:06:08 We gave a lot of tries at that.

00:06:10 Frankly, you might want to take a try at it, too.

00:06:15 We took a try at bigger than Pfizer, just 10 to 30 years, $10,000 a share.

00:06:22 There are actually people on the outside who have heard that one.

00:06:27 They call it the Vertex 10K run.

00:06:31 $10,000 a share.

00:06:34 Most admired company in the world.

00:06:37 We went on and on with those.

00:06:38 You know what?

00:06:40 Those all seem just too small.

00:06:47 What we realized was that our core purpose was a BHAG already.

00:06:54 Our core purpose to innovate to redefine health and transform lives was already a BHAG.

00:06:59 We didn't need to make another one up.

00:07:01 Having said that, if you want to write your own version of the 10 to 30 year BHAG, take

00:07:08 a crack at it.

00:07:13 It really is about having a clear sense of where we're going in the long term.

00:07:19 You're going somewhere forever with your core purpose.

00:07:21 Where are you going?

00:07:24 You're going somewhere far away.

00:07:26 10 to 30 years away is where companies should be aimed.

00:07:29 That's where they should be tacking their sailboat or climbing their mountain to.

00:07:34 That's called a BHAG, a big, hairy, audacious goal.

00:07:38 It's always 10 to 30 years away.

00:07:39 If you start getting near it, you just set another one.

00:07:42 Those of you who climb mountains know that, especially from the base of the mountain,

00:07:47 there's always a mountain that's higher up.

00:07:49 You never get to your BHAG, but it's where you're headed.

00:07:54 What's in between this BHAG and the core purpose?

00:08:04 You can think of these as the base camps.

00:08:06 You know what?

00:08:07 We're not so good at Vertex.

00:08:09 We could be a lot better at describing these base camps, these intermediate points.

00:08:14 We're pretty good at one-year goals.

00:08:16 We're actually not bad at 10 to 30-year vision.

00:08:19 We're not so good in between.

00:08:21 We can all do better at that.

00:08:22 I kind of mirror up when I say that.

00:08:25 One big base camp I propose is the one shown here.

00:08:29 It's sort of a statement of medium-term strategic intent.

00:08:33 To become a research-driven, commercially growth-oriented company developing and selling

00:08:38 our own drugs to provide value to millions of patients as soon as reasonably possible.

00:08:45 Get drugs on the market that count soon.

00:08:50 That's our next base camp, I would propose.

00:08:53 We need more base camp.

00:08:55 We need clearer descriptions of those base camps.

00:08:58 We can all work on that.

00:09:03 What about the underlying core?

00:09:05 What's underneath this core purpose?

00:09:07 What are the Vertex values?

00:09:10 What do they do?

00:09:11 What's the purpose of them?

00:09:13 Because they underlie everything.

00:09:15 If they're not accurate, not right, then you're not going to be able to climb that mountain.

00:09:21 How were the Vertex values?

00:09:22 What are the Vertex values?

00:09:25 What is a core value?

00:09:26 As I said, it's an unchanging principle to drive individual and collective behavior.

00:09:31 It's not something you stick on a wall and forget about.

00:09:33 If it doesn't speak to you about what you do every day, then it's inauthentic.

00:09:41 It defines our culture.

00:09:42 They define our culture.

00:09:44 How the results are achieved.

00:09:47 The core values aren't results.

00:09:49 They are how the results are achieved.

00:09:52 They are what we are at our best.

00:09:54 Again, they're not what we are every day, every minute, because none of us can live

00:09:58 up to that.

00:09:59 It's what we are, who we are, at our best.

00:10:03 Most importantly now, back to the first of this talk, the data confirms successful companies

00:10:09 live these values, and most of the people, or all the people in the company, actually

00:10:14 believe that these values drive their individual behavior every day.

00:10:21 How were our values discovered?

00:10:23 They were discovered.

00:10:25 As you may know, because many of you participated, there were seven focus groups in the first

00:10:30 quarter of this year across the whole company.

00:10:34 There were three in Cambridge, two each in San Diego and Milton Park, and it involved

00:10:37 almost a hundred people.

00:10:39 We actually involved a larger percentage of people in this than just about any company

00:10:43 that does this exercise, so roughly 12% of the people in the company actually participated

00:10:49 in focus groups.

00:10:51 What they were asked was exactly the question, who are we when we're at our best?

00:10:56 That's the simple question being asked.

00:10:58 What was surprising, and it was surprising the consultant we used for this, is that what

00:11:03 came out was very consistent across the sites.

00:11:05 Now, if you know our history, it's not apparent why that should be true.

00:11:08 In fact, it's kind of unusual, but it's a good thing.

00:11:12 Very consistent across the sites, and we took all this information, not as data, we didn't

00:11:17 plug it into an algorithm, there are no statistical methods being used here, but took all of this

00:11:22 data and brought it together as the sum total of all the discovered feedback from a hundred

00:11:30 people.

00:11:33 We got, as I say, very consistently things around the themes shown here on this slide,

00:11:42 with the starred ones really being almost ubiquitous in the feedback.

00:11:47 We took all of this, the raw data, all the comments, a lot of comments, a lot of stories,

00:11:52 a lot of anecdotes around this, to what was called the drafting team in late January of

00:12:01 2005, this year.

00:12:04 The drafting team was 11 people from across the company.

00:12:10 I participated in it, but it wasn't all useless management like me.

00:12:16 It was across the company from every site, but just 11, you couldn't do this in a group

00:12:21 of 30 or 20.

00:12:23 What we were basically looking at was what pops out.

00:12:26 We weren't making it up, we were just trying to see what pops out.

00:12:29 It turns out it was very easy and probably didn't need 11 people, because it was so consistent,

00:12:34 and that was, again, a surprising Vertex-specific observation.

00:12:40 But three values rose quickly to the top.

00:12:45 This values drafting team really had a very easy job to do.

00:12:50 The first value that rose quickly to the top was fearless pursuit of excellence.

00:12:57 Now, a lot of companies have excellence as a value, but again, the consultant tells us

00:13:03 that we're one of the few that has fearless so strong in that.

00:13:07 It's not just about being excellent, it's about fearless pursuit of excellence.

00:13:14 That characterizes who we are at our best.

00:13:17 You can give sort of epigram versions of this.

00:13:21 This is a game anyone can play.

00:13:24 Aim high and make it happen.

00:13:27 The courage to start, the passion to finish.

00:13:29 Ambition, our heartbeat, achievements are fun.

00:13:36 Write your own.

00:13:38 If those don't speak to you, write your own that incorporate this fearless pursuit of excellence.

00:13:46 A second one, again, with a sort of Vertexian twist on it, was innovation is our lifeblood.

00:13:54 Again, innovation turns out to be a core value in a lot of research-oriented companies.

00:13:59 But here, again, there was another twist to this at Vertex.

00:14:04 It's not just innovation is important, innovation is who we are.

00:14:09 Innovation is our blood.

00:14:11 We die without it.

00:14:13 We can't stand it.

00:14:14 We cannot get up in the morning without innovation being what's driving us.

00:14:19 It's not just a choice, it is sort of, I apologize, it's who I am, I'm innovative, I'm sorry.

00:14:28 I can't help it.

00:14:29 It's in my body.

00:14:30 I can't help it.

00:14:32 That's the nuance here that's really particularly Vertexian.

00:14:36 Again, these epigrams push back the frontiers of medicine, believe the impossible can be

00:14:42 done, and the slightly too cute innovate cubed, which was the compact form of innovate, innovate,

00:14:51 innovate.

00:14:52 Third value, again, perversely expressed, as is our want, we wins.

00:15:02 As opposed to Nordstrom and Sony, a core value here is about a hyperbolic cooperation.

00:15:11 It isn't just cooperation, it is an interdependence that we actually seek out.

00:15:18 It's more than just we cooperate when we need to, or most of the time we do what we

00:15:23 want by ourselves, but when necessary we can get groups together to work together.

00:15:28 It's stronger than that.

00:15:30 It's more we seek out cooperation, we organize around the need to cooperate, and we celebrate

00:15:39 that.

00:15:41 Success is not singular.

00:15:44 Participate, your two cents can be worth a fortune.

00:15:49 For the Latin scholars, innovation happens at the vertices.

00:15:52 Vertex, as you know, is a mathematical term related to the intersection of lines or planes,

00:16:01 and the plural of that is vertices.

00:16:04 Again, a game anyone can play.

00:16:07 You can write these as well.

00:16:11 We end up with three values that I'll come back to.

00:16:15 We got these values really out of a series of stories.

00:16:20 People didn't say, I think the three values are, and they wrote a list.

00:16:23 They sort of said, here was a good day, I remember, a month ago, and let me tell you

00:16:28 about it.

00:16:29 Then they talked about it, and we pulled this description out of it, or they pulled this

00:16:34 description out of it.

00:16:35 I'm going to tell you one of my stories, and then we're going to hear a few more stories.

00:16:39 This story takes place in 1989.

00:16:42 That's Vertex front door in 1989, which, as you know, still exists.

00:16:47 There's me in 1989.

00:16:50 I now just recently moved to my third office at Vertex.

00:16:53 This was the first one.

00:16:54 Some of those papers on the desk are still on my desk today.

00:17:00 You can see it's in 1989 because I had a little more hair.

00:17:04 The story also involves Al Vaz, who actually still has about the same amount of hair.

00:17:12 This was before our labs actually opened.

00:17:14 They were about, I don't know, 11 or 12 of us were getting paid for reasons that defy

00:17:20 human understanding because there were no labs.

00:17:23 We had no labs.

00:17:24 They were being built.

00:17:25 Al was building them.

00:17:27 We hadn't actually opened the laboratories yet.

00:17:30 We're spending all our day thinking about science, writing on boards, and doing landing

00:17:38 flight simulator.

00:17:44 We got this call from Al from the back of the building.

00:17:46 As you know, the building's small at the back of Alston.

00:17:50 Al said, I need everybody.

00:17:52 We all stopped playing flight simulator and went to the back of the building.

00:17:57 There was the loading dock, which is tiny.

00:18:00 There was this truck there.

00:18:01 It was a big truck.

00:18:03 Right on the tail of the truck was about a 1,000-pound freezer.

00:18:08 This truck didn't have a lift.

00:18:11 It was just sitting on the back of the truck.

00:18:13 The driver was standing there looking at his watch going, I'm leaving in 30 minutes.

00:18:17 I don't unload this stuff.

00:18:18 I just drive it.

00:18:19 He went to the cab, and there's this 1,000-pound refrigerator up about this high off of the

00:18:24 back of a truck.

00:18:25 We're sitting there going, how do we get this thing off?

00:18:28 We immediately caucused, and people started talking about whether you could use the techniques

00:18:33 that were used to build the pyramids backwards.

00:18:39 There were discussions of Easter Island, and raising kids, and rolling, whether you could

00:18:44 use those techniques.

00:18:45 Actually, I remember someone calculating, if we drop this thing from two feet and it's

00:18:50 under someone's foot on the edge of it, it'll cut your foot off in less than three milliseconds.

00:18:55 There was physics going on.

00:18:58 While we were talking about this, two people, and I forgot who they were, actually, disappeared,

00:19:03 and then came back in a minute with a forklift truck.

00:19:11 This was highly innovative, because we didn't have a forklift truck.

00:19:16 They had gone to what is now Fort Washington 1, which was an engineering company called

00:19:21 AS&E.

00:19:22 They had somehow bribed them into loaning them.

00:19:25 Can you imagine loaning them a forklift truck?

00:19:29 They drove the forklift truck across the driveway.

00:19:31 We got the refrigerator down quickly, but then we spent literally the rest of the day

00:19:35 moving that bloody refrigerator through doorways into where it was to be plugged in.

00:19:41 You know what?

00:19:42 That was one of the best days of Vertex's existence.

00:19:46 We solved the problem.

00:19:48 Everybody worked on it.

00:19:50 Nobody said, not my job.

00:19:53 I've introduced to you the Vertex vision, and I hope even now it resonates a bit.

00:19:59 We've talked about the vision in the practice process that we're starting here today.

00:20:08 Let's just once again remind ourselves, core purpose, to innovate, to redefine health,

00:20:13 and transform lives with new medicines.

00:20:17 This is where we're going forever.

00:20:19 This is the direction.

00:20:20 This is the directionality of where we're going forever.

00:20:26 The values that underlie that are strong enough and unusual enough, I think, and authentic

00:20:32 enough to be worthy of Vertex, and vice versa.

00:20:37 Fearless pursuit of excellence.

00:20:40 Innovation is our lifeblood, and we win.

00:20:42 It's not going to fit Sony.

00:20:44 It's not going to fit Disney.

00:20:47 I think it fits us, and I hope you agree.

00:20:49 I'm going to close with a question in the form of a cartoon.

00:20:55 One of my favorite cartoons, not drawn anymore, is Calvin and Hobbes.

00:20:59 For those of you not Calvin and Hobbes fans, Calvin is a boy.

00:21:06 He's a little boy in the cartoon here.

00:21:09 Hobbes is his tiger.

00:21:11 His tiger is a stuffed tiger when adults are looking at it, but it turns into a real tiger

00:21:15 when adults aren't looking.

00:21:18 Something else magically happens when that happens, which is when Hobbes is a real tiger,

00:21:23 Hobbes is the child, and Calvin turns into the adult in terms of his thoughts.

00:21:28 Here we have a typical Calvin and Hobbes.

00:21:30 Here we stand peering down the dizzying depths of doom drop.

00:21:35 Do we turn around and retreat to the stupefying security of home and hearth, or do we brave

00:21:40 the descent, risk demise, and experience the flood of somatic sensation that screams, we

00:21:46 are alive, gloriously alive, however temporarily?

00:21:55 And of course, when he turns around, Hobbes is gone.

00:22:02 And knowing Hobbes, he suspects where he is, and he's right, Hobbes is by the fire.

00:22:10 And says, I thought that was a rhetorical question.

00:22:14 And Calvin says, yes, but the other way.

00:22:18 So it's not a rhetorical question.

00:22:21 It's a question that we all have to answer every day we get up and come into this place,

00:22:27 and I hope you answer it in a different way than Hobbes chose to answer it.

00:22:34 It's not a rhetorical question.

00:22:38 It's our destiny.

00:22:39 I think we are destined, if we want to be, if we choose the right answer to that question,

00:22:45 I think we're destined to be a great company.

00:22:51 But we have to choose the right answer to that question, and we have to celebrate and

00:22:56 maintain and live those values, really live them, really incorporate them into our choices

00:23:03 every day that we make.

00:23:05 Every day as we interact with our fellow employees, every day as we decide whether to go after

00:23:09 that tough experiment or that tough vendor or that tough business problem.