PepsiCo | Driving HR Transformation
Driving HR Transformation ideally requires the unwavering support of the Leadership team.
At PepsiCo, Indra Nooyi, cited by many as one of the most influential women in business, is a Leader that has formed a strong Leadership team. A Leader that empowers HR to drive transformation at an unprecedented rate.
Indra Nooyi does this by giving HR an incredible presence on the Global Leadership team.
Whilst there have been many articles over the past decade that talk to the challenge of HR having a full seat at the Leadership table – at PepsiCo, HR doesn’t just occupy one seat, it holds four very important seats alongside the Chief Executives and Presidents of all of the major operating units.
This case study below tells the story of PepsiCo and how four important HR Leaders are driving HR transformation.
PepsiCo | A Company on a Mission
If you asked most people what PepsiCo sells, they would probably say Pepsi Cola, the drink – not realising that over 50% of PepsiCo revenues come from food products like Doritos, Walkers Crisps and Quaker Oats.
These acquisitions are just the tip of the iceberg – with PepsiCo during the 70’s, 80’s and 90’s owning brands like KFC, Pizza Hut and Taco Bell to name but a few – brands which PepsiCo eventually spun off as Tricon Global restaurants, now renamed as Yum!.
Today, Yum! employees over 1,500,000 people and has annual revenues in excess of $13B. What PepsiCo did when it spun out Yum! was to put in place a lifetime contract for PepsiCo to supply Yum! with beverages in nearly all of its restaurants – a lucrative move that is typical of the ingenious Leadership at PepsiCo.
So the PepsiCo story is much broader than many of us imagine and goes way beyond the Cola Wars of the 1980’s.
With more than 275,000 employees operating across 200 countries, generating over $65B in annual revenues, PepsiCo is an amazing story of transformation – currently at number 137 in the Fortune 500. PepsiCo is on a continual journey of transformation – through acquisitions; divestitures, new products and new, emerging markets.
So with the constant business transformation, how do PepsiCo HR Leaders align strategy to investment in HR Services?
One Ethos | Three Pillars
Indra Nooyi joined PepsiCo in 1994 and was promoted to the role of CFO in 2001 and then promoted to CEO in 2006. In 2006 Nooyi introduced a new vision for PepsiCo – a vision called Performance with Purpose.
Whilst introduced as a vision, now nine years later, ‘Performance with Purpose’ can now probably be viewed as an ethos at PepsiCo.
Performance with Purpose has three supporting pillars; Human, Environment and Talent. Aligning investment initiatives to this Talent pillar enables HR to acquire the funding required to transform HR.
So who are the PepsiCo HR Leaders driving HR transformation?
HR Leaders | Driving HR Transformation
Notable is the prominence of ‘Talent’ as one of the three key pillars that support the ethos of PepsiCo.
To drive and execute the strategy of Talent – PepsiCo doesn’t just have a single HR Leader on the Leadership team, they have four accomplished HR Leaders that are driving HR transformation.
- Cynthia M. Trudell – EVP and CHRO
- Umran Beba – SVP and CHRO, PepsiCo AMEA
- Ruth Fattori – SVP, Talent Management Training and Development
- Deborah Rosado Shaw – SVP, Chief Global Diversity and Engagement Officer
These are key leaders of PepsiCo empowered with significant investment and bold goals to keep PepsiCo at the forefront of being to attract, develop, engage and retain great talent.
This absolutely sends a message to the PepsiCo organisation, that they take their people seriously and are making the levels of investment needed to help individuals make the most of their opportunity.
What HR Services drive the Talent agenda in PepsiCo?
HR | Strategy Alignment
The ‘Performance with Purpose’ ethos drives strategy across three pillars; Human, Environment and Talent.
From all of the research I have undertaken on PepsiCo, the talent pillar has an incredible amount of investment and is the vehicle for driving HR transformation.
For example, PepsiCo has invested over $100m into an HR transformation initiative focused on harmonising business processes globally; moving to a shared services model with functional centers of excellence.
Harmonisation of business processes talent which includes includes recruitment, performance management, compensation & learning. Harmonisation across transactional HR is also well under way, incorporating employee self service at Tier 0 – and Shared Services through tiers 1 to 3.
For recruitment PepsiCo has implemented a Global solution across 41 countries, enabling them to consolidate 30 separate country portals on a single multi-lingual platform.
PepsiCo has also established the PepsiCo University with 5 underlying Universities and a raft of colleges within each University.
The PepsiCo University started with Finance, but has now broadened out with Universities for R&D, Customer Management, Procurement & Human Resources.
On page 95 of the 2012 GRI report, PepsiCo refer to a “Global Learning Architecture’ and it’s clear that PepsiCo continues to try and improve the way in which career paths are made available to all associates across all functions.
This is also reenforced by the numbers of associates that are taking courses outside of their current functional role – for example in 2013, nearly 3,000 associates outside of Finance enrolled in the PepsiCo Finance University courses.
Having this level of Professional Development available increases engagement, improves retention and probably drives better decisions across the business.
What Service Innovation is PepsiCo HR considering?
HR | Service Innovation
Two key initiatives that can be seen at PepsiCo are the establishment of a 3 year roadmap to ‘reinvent performance management’ and the establishment of a global career architecture where multiple centres of excellence will come together to produce a consistent philosophy & structure.
Reinvention of performance management is going to be very interesting as we have already seen a number of large organisations including Adobe, Microsoft and Expedia radically reinvent they way in which they manage performance.
In their Global Human Capital Report last year, Deloitte was one of many to state that organisations are seriously reviewing the annual evaluation cycle; replacing it with ongoing feedback and coaching, designed to promote continuous employee development.
In addition, like many other global organisations, PepsiCo references the establishment of a global career architecture. With the global career architecture under the remit of the same person responsible for reinventing performance management – we expect that learning, career development and performance will be fully integrated.
What role does technology play in the ongoing transformation of HR services?
HR | Process Improvement
Like many leading organisations, PepsiCo HR employs a high number of process experts whose purpose is to improve existing processes through automation; fewer hand offs; error reduction and time reduction.
Technology continues to play a pivotal role, enabling PepsiCo to embark on simplification and globalisation whilst still maintaining the ability to cater for local needs.
PepsiCo HR continues to invest significant sums in new technologies, that improve the operational efficiency and effectiveness of HR services. With significant advances in HR technologies – PepsiCo have been bold, switching courses to take advantage of simpler and more cost effective solutions.
In this video, Shakti Jauhar from PepsiCo describes the investments that PepsiCo have made in technology, why they have made them and why they had to switch course.
If you’vemade it this far, let me close by saying thank you for reading this story – hopefully its given you some useful insight to consider, in whatever role you play in our industry.
And please feel free to connect with me on LinkedIn, as I’m fortunate to work with some amazing brands – and in their transformation programs they often look for great people – and I often look across my network to introduce folks.