Audit Arrogance, Integrity and Energy
Defend a dominant position by auditing leadership signals before the results ever move
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 83%
Peter Gassner treats defensibility as an internal audit problem. Veeva set a goal roughly five years earlier, code-named being the leader in liked: not merely the market leader, but the market leader customers actually like. The mechanism has two parts. First, the goal is stated publicly to customers, which converts an aspiration into an external standard — customers do sometimes come back and say Veeva is not living up to it, which is uncomfortable and exactly the point. Second, the leadership team is audited on three specific things that knock dominant companies off: arrogance, which drives customers to look for an escape hatch; integrity issues, which cluster in well-established leadership teams; and energy. He audits himself alongside others. The rationale is timing — if you wait for the results to show these things, it is already too late.
Origin
Peter Gassner describing Veeva's leader-in-liked goal and its leadership audits when asked about defending the castle, on Acquired.
Core principles
- 01Results are a lagging indicator; by the time they move, the damage is done.
- 02Arrogance gives customers a reason to look for an escape hatch.
- 03Integrity failures concentrate in leadership teams that are already well established.
- 04Energy in the leadership team is a measurable asset that decays quietly.
- 05A public commitment to being liked holds the company to a standard it cannot quietly drop.
How to run it
- 1
Set a goal beyond market share
Define winning as being the leader and being liked. Share alone permits the arrogance that eventually costs you the position.
Pro tip Give the goal an internal code name so it survives leadership turnover as a shared reference.
- 2
Tell customers the goal out loud
Say publicly that you intend to be liked, not just dominant. This puts you on the hook to a constituency that will not let you quietly lower the bar.
Watch out Customers will use it against you, which is uncomfortable in the moment and the entire value of the commitment.
- 3
Audit for arrogance
Look for arrogance in how the leadership team talks about customers and competitors. Arrogance turns customers off and pushes them to find an escape hatch.
Pro tip Customer-facing staff notice this before the executive team does — ask them.
- 4
Audit for integrity, starting with yourself
Explicitly audit the leadership team for integrity issues, which become more likely once the company is well established. Include the CEO in the audit.
Watch out Exempting the founder from the audit invalidates the whole exercise.
- 5
Audit for energy
Measure whether the leadership team still has energy. Declining energy in a dominant company precedes declining results by a long margin.
Pro tip Run the three audits together on a set cadence rather than reactively after a bad quarter.
- 6
Create a creative outlet through expansion
Expand into genuinely new areas so creative people have somewhere to build. Otherwise they will do more in the established area than they should, disrupting a product that already works.
Watch out An over-served core product gets rewritten for no customer reason, which creates its own set of problems.
In the wild
Because Veeva told customers about its goal of being the leader in liked, customers occasionally bring it back at Veeva — pointing out that on this occasion the company is not living up to it. Peter Gassner describes the immediate reaction as regretting having said it, and then explains that this is precisely the mechanism: publicly setting yourself out there holds the company to a higher standard than an internal goal ever could.
→ An externally enforced quality standard that survives the company's own comfort.
Asked the same defensibility question, Eric Yuan framed it as a sport requiring both offense and defense. Even with a product currently better than every competitor, he argued you have to stay paranoid, keep asking what you can do differently, and keep innovating on new services and features — while simultaneously planning what comes next, moving Zoom from unified communications to a collaboration platform with multiple new departmental applications. In his framing the better offensive play is often the best defense.
→ A defensibility posture built on continuous innovation rather than on incumbency.
Common mistakes
Waiting for the numbers to show the problem
Arrogance, integrity failures, and lost energy all appear in results long after they take hold, at which point correction is far more expensive.
Keeping the standard internal
A goal customers never hear can be quietly downgraded whenever it becomes inconvenient. External commitment is what makes it binding.
Blocking expansion to protect the core
Without a new area to build in, creative people over-invest in the established product, rewriting things that work and disrupting what customers depend on.
Is it for you?
Best for
Leadership teams of companies that have reached a dominant or high-share position in their market.
Not ideal for
Early-stage companies still fighting for share, where the failure modes are different.
From the transcript
“we also have a goal that we set out about five years ago to be the leader in light that was our code name for…”
“because if you if you wait for the results to show those things it's too late”
“if you get a high market share in an area and you don't expand to another area what will happen just because the nature of…”
From the episode
Capital-Efficient Growth (with Zoom CEO Eric Yuan & Veeva CEO Peter Gassner)
Peter Gassner