Diversity at Pepsi
"Although creating a diverse workforce is important, we must also create an inclusive environment where everyone -- regardless of race, gender, physical ability or sexual orientation -- feels valued, engaged, and wants to stay and be part of our growth. It is only through inclusion that we will fully unleash innovation -- and growth for our business and associates."
~ Pepsico’s view on Diversity
Yesterday, I attended a case discussion on the Diversity Challenge at Pepsico, a program at the Wake Forest University Schools of Business that explored why it took Pepsico so long to figure out and develop a diversity agenda. The event, held on campus, also delved into the diversity strategy employed by Steve Reinemund, the dean of our business school, while he was the company’s chairman and CEO.
Here are some key highlights:
- The pace of change was slow because Pepsico was a stable company.
- The strategy included two phases – The first phase was involved meeting retention and diversity numbers and the second phase focused on inclusion and creating a culture change to accept diversity and make it part of the organization.
- Many top-level executives did not understand why the diversity agenda was important during the year 2000 time era. They classified it as “Steve’s project.”
- The need of diversity was crucial due to the changes of the market place.
- With diversity, you don’t know what you don’t know but having intent at the table is a crucial component.
- It was important that Pepsico kept trying with diversity, using several tactics. They did not give up.
After the case discussion ended, Dean Reinemund provided his comments. Here are the highlights:
- Three distinct ways you can take the case:
- How a leader sets vision
- How a leader takes the vision and executes change management
- Diversity by itself
- How Dean Reinemund rated the strategy:
- Grade on setting vision: A
- Change management side: C+/B-
- Diversity: Unsure how to grade
- Vision setting: Big advantage that Dean Reinemund had with Pepsico was that he had 20 years of experience at the company. He understood the organization and had time to assess its strengths and opportunities.
- Cultural change at an established company takes a long time.
- Dean Reinemund wanted to focus on three cultural changes during his time at Pepsico:
- Move the company in health and wellness
- Focusing on the values of the company
- Winning with diversity and inclusion is one of the value statements
- In 2000 diversity was not a clear picture for corporations. The need of having a diverse workforce was needed due to the rapid rate of growth of seven major urban markets.
- Having the phases was important because there was not enough diverse mass in mid- management and senior management in order to start the discussion process.
- Major change cannot be democratically changed … major change occurs when there is a rival.
- Dean Reinemund had an awakening after his implementation of phase 1 and the reviews he received from Stanford University. He learned that diversity and inclusion are a learning journey. It forced him to change the way he delivered the message about diversity as he had to think deeply about the motive for diversity.
As an employee of Pepsi Beverages Company, a division of Pepsico, the case discussion was a great experience. Diversity is a journey and Pepsico remains on that journey. As a young professional, it is often frustrating when I understand the importance of diversity, due to my own experiences, and when others around you at the workplace are still not quite there. As Pepsico tried and tried and did not give up on the diversity agenda, similarly, bringing others along to see your point of view can be a challenge, but can yield great success. The key is to communicate and learning how to deliver the message.