PepsiCo

How do you equip tomorrow's leaders to innovate in a constantly changing world?

 

PepsiCo is a leading global food and beverage company with brands that are respected household names throughout the world. The PepsiCo culture was built on operational excellence and marketing.  CEO Indra Nooyi formed a strategy group to explore options for moving into healthy food and beverage businesses while continuing to reap considerable profits from its existing businesses. Moving in these new directions would require considerable investment and a vibrant innovative company culture. Ms. Nooyi decided to focus on the emerging leaders across the organization by making them the catalysts for change. Zoe Feldman of the new strategy group, Anna Muoio (of Fast Company and Monitor Institute fame), Dan Coleman(Big Sky Blue) and I collaborated on the design and delivery of the Fringe Innovation Lab Program.  

 

Objectives of the program

 

The program had multiple objectives. Participants were to:

 

• Personally experience the innovation process, practices and mindset.

• Develop the competencies to lead innovation efforts within the organization.

• Collaborate with others who have different professional backgrounds from across the PepsiCo organization.

• Work on the 3 strategic challenges facing PepsiCo as presented by Ms. Nooyi.

• Develop a set of novel concepts that could be the basis for new business to address these challenges. The concepts were to be vetted for further development after the program by the PepsiCo executive team.

• Interact with experts in various areas of innovation.

• Have a stimulating and memorable program experience to help build their loyalty to the organization.

 

Participants

 

24 emerging leaders were carefully selected from across the PepsiCo organization. They came from different functional areas such as operations, finance, marketing, strategy, manufacturing, and legal. To be selected they had to exhibit the following characteristics:

• Excellence in their current role.

• Advancing rapidly within their departments.

• Strong leadership skills.

• Belief that new approaches were needed to move the PepsiCo into the future.

• Desire to work with other emerging leaders from other departments.

• A strong interest in innovation.

• Actively pursuing their own development.

 

Program Approach

 

The Fringe Innovation Lab was a 6 month long action learning program. Working in 6 teams, the participants learned the innovation process, practices and mindsets from experts. They then applied what they had learned to 3 strategic challenges facing PepsiCo. These challenges involved uncovering unmet or emerging consumer needs that might drive the creation of new businesses for PepsiCo. The program consisted of 5 three-day in-person workshops and teamwork between workshops. The workshops were organized around the 5 phases of the innovation process:

 

Workshop 1 – Alignment

The teams were formed and assigned a challenge. They reframed these into broader challenge statements that allowed for more creative exploration.  This helped align the team members so they could move forward effectively. They created project plans and began gathering existing information about their challenge.

 

Workshop 2 – Learning

Experts shared qualitative research techniques for uncovering unmet consumer needs. The teams practiced these techniques then went out and used them with consumers in their homes and businesses. The teams captured their findings in various formats provided by the research experts.  

 

Workshop 3 – Synthesis

Experts shared various analysis and synthesis tools that could be used to assist in gaining insights from the findings the team gathered in the Learning phase. Because the Synthesis Phase of the innovation process is the most difficult phase, an expert practitioner was assigned to work along with each team. When their synthesis was completed each team shared their research findings and synthesis insights.

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Workshop 4 – Envisioning

Experts shared methods for envisioning new product or service concepts based on insights drawn from qualitative research findings. The teams then envisioned multiple product and service ideas that might be the basis for new businesses for PepsiCo. These concepts were then made into prototypes for testing with consumers. Between Workshop 4 and Workshop 5 the teams tested the prototypes with real consumers to understand the desirability and viability of the concepts.

 

Workshop 5 – Deployment

The teams refined their product or service concepts based on the testing. They then created formal presentations. These were presented to the PepsiCo senior executive team who then selected concepts to pursue further. The presentations were also placed in a gallery where any PepsiCo employee could view and provide feedback.   

 

During each workshop a different team member assumed the team leader role. The practices used within the innovation process required the use of leadership practices that were unfamiliar to the participants prior to the program. Working on real challenges with people from different backgrounds resulted in many learning opportunities for the participants and helped them develop the leadership skills needed to shape an innovative company culture.

 

Outcomes

 

The Fringe Innovation Lab was deemed a strong success by Ms. Nooyi, the PepsiCo executive team, the strategy group, and especially by the emerging leaders themselves. They indicated it was the most engaging and informative learning experience they had ever had. Many wanted to leave their departments and work this manner on a fulltime basis. Several did eventually transfer to the strategy group or set up an innovation group back in their departments. 

 

The executive team selected three of the product and service concepts for further resourcing and development. Teams were established and fully supported projects were undertaken that have resulted in PepsiCo investing in new healthy food businesses.

 

Ms. Nooyi held up the Fringe Innovation Lab Program and the work of the emerging leaders as an example of the vibrant innovative culture she desired for PepsiCo.