February 11, 2005
Base Leadership on the 6 Ps, says PepsiCo CEO
by Niti Dalal
Picture this, suggested Undergraduate Business Council officer Sheena Paul: You wake up one morning and pour a bowl of Life cereal and a glass of Tropicana orange juice for breakfast. On campus, you grab some Lay’s chips and a Pepsi during a break. After class, you go to the gym and buy Gatorade afterwards.
By mid-afternoon, you have already consumed five PepsiCo products.
This dominance is why PepsiCo ranks as the world’s fourth largest food and beverage company with annual revenues of about $29 billion. To run this empire, CEO Steve Reinemund relies on the 6 Ps: principles, perspective, passion, perseverance, performance and people.
Principles, he said, are critical for any serious leader, suggesting that leaders who have succeeded are those who have figured out their true norm. Reinemund challenged students to answer the question, “What is it that you really believe in?”
The second P, perspective, gives leaders the ability to look at opportunities and create vision. Reinemund exemplified Wal-Mart as a company that has stuck to its perspective, to be a low-cost retailer, years after the death of the founder. It is important, Reinemund said, to define what is trying to be accomplished in order to be successful.
Passion is also vital. And according to Reinemund, having “passion” isn’t the same as being “charismatic.” Passionate leaders have an inner enthusiasm that encourages others to follow. President Kennedy exemplified a passionate leader, claimed Reinemund, when his challenge to put a man on the moon changed the way people perceived their work.
When it comes to PepsiCo, Reinemund said he is passionate about four main things:
- Innovation specifically targeted to health and wellness.
- Creating a diverse company.
- Instilling values in employees.
- Working across businesses.
The fifth P, perseverance, is especially important for leaders during the hard times.
“There are some ideas in business that are instant successes, but not many of them,” Reinemund said.
Reinemund experienced the need for perseverance first-hand when he started his career at PepsiCo as senior operating officer of Pizza Hut Inc. At the time, Pizza Hut was the largest pizza company in the country, but its sales had been flat for a year.
Reinemund quickly developed a strategy to combat the stagnation, but sales began to decline drastically soon afterwards. It took an eight-person team to turn things back around.
“I was fortunate to work with someone who believed in what we did and gave us a second chance,” Reinemund said.
And those that are able to grow a company through the hard times have the potential to build a strong performance record, which is another important element of leadership, Reinemund said.
Finally, Reinemund said that as a leader, it’s important to show people that he cares for them. Reinemund recognizes that at PepsiCo, the 160,000 sales executives are important and that one mistake can be very costly.
Reinemund encouraged students looking for jobs to find a company
that has the winning formula and poses the least risk. This, he
said, is the best kind of job to have.
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