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PepsiCo Leadership Competencies / Model

Nov 08, 2014

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Leadership Competencies to provide a clear description of the
behaviors that form the foundation
upon which PepsiCo is building its
future. In short, these competencies
are an answer to the question,
“What is important at PepsiCo?”. They will serve as the framework
for leadership training programs, be
built into our 360 development tool,
measured as part of the performance
management process, and used to
guide people planning discussions.
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Page 1: PepsiCo Leadership Competencies / Model
Page 2: PepsiCo Leadership Competencies / Model

Q&Awith theCEO- Steve Reinemund

Q: Steve, what are the PepsiCoLeadership Competencies?

A: The previous LeadershipCompetencies were designed in 1998to provide a clear description of thebehaviors that form the foundationupon which PepsiCo is building itsfuture. In short, these competen-cies are an answer to the question,“What is important at PepsiCo?”

Q: Why were they updated?

A: This year, with the transition to anew senior leadership team, andwith the integration of Quaker, wemade the decision to refine ourthinking about leadership. Whilethe bedrock foundation of what isimportant has not changed, thereare some new components and shiftsin emphasizing the leadershipequation. These enhancementsreflect the changing needs of ourbusinesses and our employees.

Q: How were they developed?

A: One-on-one “business strategy”interviews were conducted withmembers of the senior teams in eachof the divisions, myself included, toestablish a clear line of sight be-tween specific leadership behaviorsand emerging business trends andchallenges. In addition, focusgroups and a survey were conductedwith a broad sample of managers topinpoint the behaviors most tightlylinked to performance and jobsuccess at different levels. Finally,focus groups and a survey wereconducted with a representativesample of our front-line and hourlyemployees to get a comprehensiveanswer to the question, “What kindof manager brings out the best inyou?” Each of these perspectiveswas used to identify, and weight, thefinal components in the model.

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Page 3: PepsiCo Leadership Competencies / Model

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Q: What is the result?

A: We now have a richer, more factualunderstanding than ever before of“what separates the best from the rest”in terms of successful leadership andmanagerial performance. We also havea clearer picture of what is important toour businesses and how our leaders cancontribute most effectively to thatsuccess.

Q: How will they be used?

A: The Leadership Competencies definewhat is important at PepsiCo. So, atone level, they communicate the kindsof behaviors that are linked to jobsuccess and, ultimately, to the successof the business. At a more concretelevel, they will serve as the frameworkfor leadership training programs, bebuilt into our 360 development tool,measured as part of the performancemanagement process, and used toguide people planning discussions.

Q: Do you have any final commentsabout the leadership model, orleadership in general, that youwould like to share?

A: Our success at PepsiCo did not justhappen. Furthermore, our continuedsuccess will not just happen…successdepends on our incredibly talentedpeople working together to make ithappen. This company needs leaders,at all levels of the organization, whocan work with their people to set a cleardirection and vision, build the talentaround them, find ways to achieveresults quicker, better, and moresimply, create a collaborative andinclusive culture, and so forth. Tomaintain our growth trajectory, wemust take the mystery out of leadershipand give all managers a roadmap forsuccess. The Leadership Competencieshave been designed to do just that.What you will find on the followingpages is the clearest definition possibleof the individual talents and behaviorsthat align with the future success of thecompany.

Page 4: PepsiCo Leadership Competencies / Model

Your PepsiCo Leadership ModelThe PepsiCo Leadership Model is outlined below. At the highest level, the model is organized around thethree Leadership Imperatives. The Imperatives are defined by seven basic Success Factors, which in turnare defined by the 17 Competency Dimensions. A summary definition of each Competency Dimension, andthe specific Leadership Behaviors that define each dimension in detail, are presented on the followingpages. You will see these 58 Leadership Behaviors again; they serve as the item content in our 360 feed-back tool.

In addition, a summary statement of why each competency dimension is important is presented fromtwo perspectives: the Front-Line and the Senior Leadership Team. Since the development of this modelfollowed a bottom-up and a top-down approach, we thought you might be interested to learn what indi-viduals thought about each competency dimension… from both a bottom-up and a top-down perspective.

LeadershipImperatives

SuccessFactors

CompetencyDimensions

SettingThe

Agenda

TakingOthers

WithYou

Doing ItThe

Right Way

Execution

Courageous Leadership

People Development

Savvy Communication

Integrity

Operational Excellence

12. Communicates Productively13. Negotiation

14. Inspires Trust15. Walks the Talk

16. Knows the Business17. Functional Excellence

1. Thinking Skills2. Innovation3. Strategic Focus

6. Change Leadership7. Motivates Others8. Collaboration

9. Builds Talent10. Inclusion11. Supports Others

4. Establishes Priorities5. Drives for Results

3

Planning

Page 5: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Setting The AgendaPlanning

1. Thinking Skills: Possesses the perfect blend of smarts and practicality.

Behaviors:• Sees connections in data, events, trends, etc., not obvious to others.• Quickly analyzes complex problems to find actionable, pragmatic solutions.• Makes the right short-term decisions without sacrificing long-term results.

3. Strategic Focus: Is future focused and sees big-picture business trends, implications and possibilities.

Behaviors:• Looks ahead to reasonably anticipate business opportunities and obstacles.• Creates long-term strategies and plans that reflect a thorough understanding of how the business operates.• Demonstrates an understanding of the cross-cultural implications when conducting business or executing

initiatives around the world.• Demonstrates an understanding of the organization’s global market position, opportunities, capabilities and

competitive threats.

2. Innovation: Is a source of fresh perspectives and breakthrough ideas.

Behaviors:• Generates innovative ideas, fresh perspectives and creative solutions that add value.• Actively seeks and takes advantage of ideas, best practices and solutions developed elsewhere.• Fosters an environment that supports innovation and breakthrough ideas.

4

Nobody has cornered themarket on insight. If youare really smart, you willinclude and leverage the

insights of others.

We hire, and depend on,incredibly smart peoplewith superior judgment;

it’s why we’re good.

FrontLine

Sr.LeadershipTeam

FrontLine

Sr.LeadershipTeam

Don’t forget, some of thebiggest ideas come from those

closest to the customer,consumer, work process,

or technology.

The key to driving growthis innovation (product,

marketing, work process,etc.). Everything else will

fall into place.

Let’s make sure time spentlooking forward doesn’t get

brushed aside so easily in therush to get period-to-period

results.

Don’t get too internallyfocused. We need executivesto be externally oriented andhungry for knowledge about

the world.

Page 6: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Setting The AgendaExecution

4. Establishes Priorities: Keeps work directions logical and crystal clear.

Behaviors:• Translates strategies into plans that can be effectively executed.• Establishes clear responsibility for action against clear priorities.• Minimizes bureaucracy and process inefficiency that distorts a focus on customers or results.• Balances competing priorities without losing momentum behind execution.

5. Drives for Results: Has laser-beam focus on end results.

Behaviors:• Sets challenging but attainable performance goals.• Provides timely and direct feedback to others regarding performance or workplace issues.• Demonstrates a passion for winning in the marketplace.• Demonstrates perseverance and resilience in the pursuit of goals.

5

None of us has a crystalball in our heads. Tell us

where you want to go, andwe will help you figure out

how to get there.

Business consistencydepends on great execution.Great execution depends on

efficient effort againstpriorities.

FrontLine

Sr.LeadershipTeam

Give us a challenge, andsome room to work, andlet us show you what we

can do!

This company needs peoplewith an insatiable appetite

for accomplishment andresults.

Page 7: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Taking Others With YouCourageous Leadership

6. Change Leadership: Embraces change as a natural part of business.

Behaviors:• Champions breakthrough ideas and initiatives.• Takes appropriate, well-reasoned risks.• Confronts and works to resolve tough issues.• Takes the initiative to find ways to get better results.• Demonstrates courage and optimism during times of crisis or change.

8. Collaboration: Leverages the ideas, learning and expertise of others.

Behaviors:• Collaborates and makes compromises for the greater good without sacrificing personal principles or business ethics.• Proactively shares information, best practices and ideas with others throughout PepsiCo.• Builds cross-functional, cross-divisional and global partnerships that create synergy across PepsiCo.

7. Motivates Others: Energizes and inspires others.

Behaviors:• Articulates a compelling vision, purpose and direction that inspires others to follow.• Inspires passion and excitement around shared goals and values.• Builds a sense of urgency in the team to get results.• Projects a credible and confident executive image.

6

Change can be eitherthrilling or threatening;

make sure we see theopportunity in change.

Every single manager andexecutive needs to be on a

mission to make thingssimpler, faster, better.

FrontLine

Sr.LeadershipTeam

FrontLine

Sr.LeadershipTeam

The spirit of a workplace canbe a competitive advantagethat is difficult to replicate.

Being passionate aboutthe business, and being ableto inspire passion in others,is an indispensable leader-

ship characteristic.

Maybe you can get resultsas a solo act. But think about

how much more might beachieved if you work effec-

tively with others!

If we are going to win overthe long haul, we have got towin as a team. Learn to share

insights, best practices,people…everything.

Page 8: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Taking Others With YouPeople Development

9. Builds Talent: Feeds the organization’s talent pipeline.

Behaviors:• Gives constructive, actionable feedback to help people improve their performance.• Encourages and coaches people to build their skills.• Hires and develops people who fit the organization and have a positive impact.• Provides others with challenging assignments and training experiences to promote their development.

11. Supports Others: Is committed to making this a “great place to work.”

Behaviors:• Creates a work environment that makes work rewarding and enjoyable.• Recognizes and celebrates the significant achievements of others.• Balances a concern for results with a concern for the needs of individuals in his/her work group.

10. Inclusion: Promotes inclusion and fairness as core business imperatives.

Behaviors:• Treats all people with respect and fairness.• Values and leverages people with different perspectives and experiences.• Recognizes diversity as a business imperative and takes specific actions to drive it.

7

We are on a path to biggerand better things too; we

are counting on you tohelp us get there.

The biggest challengethis company has is finding,

and growing, enoughtalented people to fuel our

plans for growth.

FrontLine

Sr.LeadershipTeam

FrontLine

Sr.LeadershipTeam

When you treat us withrespect and value our uniquedifferences, you set the tone.

In the chair you are in, youcan never not lead.

Our ability to operateeffectively in a global

marketplace is driven byour inclusion mindset.

If you don’t show us youcare, we will conclude youdon’t…and then we will

stop caring too.

We want PepsiCo to beTHE employer of choice, andone part of the equation is

ensuring this is a GreatPlace To Work.

Page 9: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Taking Others With YouSavvy Communication

12. Communicates Productively: Is a clear, simple, persuasive communicator.

Behaviors:• Clearly communicates ideas, plans and priorities to others.• Encourages the honest expression and debate of different views and ideas.• Keeps others informed so there are no unnecessary surprises.

13. Negotiation: Builds and uses work relationships to get results.

Behaviors:• Communicates persuasively to win support.• Can be direct/forceful as well as tactful/diplomatic.• Understands and uses informal networks to get things done.

8

Be confident enough tocommunicate clearly andlisten to opposing views;don’t hide behind jargon

or convoluted logic.

FrontLine

Sr.LeadershipTeam

A “selling” approach canbe even more effective

than a “telling” approachwhen you want us to take

action.

The ability to inspire trust isthe foundation upon which

all the other executivetalents are built.

You either have it or youdon’t; there is no such

thing as varying degreesof integrity.

Page 10: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Doing It The Right WayIntegrity

14. Inspires Trust: Inspires trust, both up and down the organization.

Behaviors:• Is trusted by those with whom he/she works.• Makes decisions based on what is best for the company, rather than personal gain.• Makes people proud to be part of the company because of his/her personal standards.

15. Walks The Talk: Delivers on commitments without sacrificing personal or business ethics.

Behaviors:• Acts consistently with his/her words.• Does not compromise personal principles or business ethics to win.• Can be counted on to do the right thing.

9

We will forgive good-faitherrors of judgment, butintegrity mistakes are

forever.

The ability to inspire trust isthe foundation upon which

all the other executivetalents are built.

FrontLine

Sr.LeadershipTeam

When you tell us you’regoing to do something,

we have to be able toconsider it “done.”

You either have it or youdon’t; there is no such thing

as varying degrees ofintegrity.

Page 11: PepsiCo Leadership Competencies / Model

FrontLine

Sr.LeadershipTeam

Doing It The Right WayOperational Excellence

16. Knows the Business: Is passionate about understanding the business, both now and for the future.

Behaviors:• Demonstrates a passion for mastering the details of the business and the marketplace.• Leverages understanding of key business drivers (customers, consumers, competitors, costs & people)

to get results.• Creates customer/consumer-focused strategies and plans.• Works to understand the current and future needs of customers/consumers.

17. Functional Excellence: Possesses superb functional/technical expertise.

Behaviors:• Demonstrates functional/technical mastery of the current job.• Leverages technical/functional expertise to solve broader business issues.

10

If you really want tounderstand the business,

join us in the trenchesonce in a while.

Nothing can replace a deepunderstanding of the businessand an almost instinctive feelfor how the company makes

money.

FrontLine

Sr.LeadershipTeam

How can you understand usif you don’t understand

what we do?

Being a leader doesn’t meanone is at the plateau of the

learning curve.

Page 12: PepsiCo Leadership Competencies / Model

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For Your Information

FYI #1: There are several “FYIs” about the research underpinnings of the new leader-ship model that may be of interest to you. First, part of the work to update the leadership modelinvolved one-on-one meetings with 38 of the top executives of the company to discuss (A) theCompany Strengths we must leverage and (B) the company weaknesses we must overcome if weare to maintain our growth trajectory. Those things that most everyone agreed on are listedbelow; the tie-in to the leadership model should be clear.

FYI #2: In addition to the above, the updated leadership model included input from 578front-line and hourly employees across our divisions. These employees provided detailed input viaa survey designed to answer the question, “What kind of manager brings out the best in you?” Asyou can imagine, there were a lot of interesting differences of opinion. However, from the Ameri-cas to Europe to China, there were three Defining Characteristics that stood out as being univer-sally important.

High Integrity(i.e., “Keep your promises because we’ve got to be able to depend on you.”)

Clear Communications(i.e., “Keep priorities clear and keep us informed; no surprises!”)

Being Supportive(i.e., “A focus on development, and an effort to make work enjoyableand more than ‘just a job,’ means a lot!”)

+ A laser-beam focus on growthand results

+ Our ability to execute

+ An ownership culture that promotesindividual accountability

+ Talented people/many functionalexperts

+ Incredibly strong brands

- Fostering a culture of innovation

- Proactively collecting and usingcustomer/consumer insights

- Collaborating and sharing bestpractices

- Developing future leaders withbroad business experience

��Company Strengths Weaker Areas

Page 13: PepsiCo Leadership Competencies / Model

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More FYIs

FYI #3: A third source of information used to guide the updates to the leadership modelcame from 2,312 PepsiCo managers. These managers, representing all bands, responded to asurvey that took a detailed look at which leadership behaviors were most linked to job performanceat different management levels. In other words, not all behaviors are equally important in differ-ent jobs and roles. However, we uncovered a few Super Behaviors that help define success regard-less of band, geography, or function. These include:

• Is trusted by those with whom he/she works.

• Makes decisions based on what is best for the company, rather than personal gain.

• Acts consistently with his/her words.

• Treats all people with respect and fairness.

• Establishes clear responsibility for action against clear priorities.

• Translates strategies into plans that can be effectively executed.

• Quickly analyzes complex problems to find actionable, pragmatic solutions.

• Takes the initiative to find ways to get better results.

FYI #4: The relative importance of the competencies and specific leadershipbehaviors do change as one moves up through the management ranks. A high-level summaryof these Shifting Priorities is presented below.

Emphasis onTechnical vs. Leadership

Competencies

Emphasis on Leadership ImperativesSetting The

Agenda

Sr. Leader:

Manager:

Entry LevelManager:

More Important

Taking OthersWith You

Doing It TheRight Way

Less Important

Page 14: PepsiCo Leadership Competencies / Model

Capstone Comments From

13

Roger Enrico, Vice Chairman of the Board

“There should be nothing mysterious about leadership and success. This definition ofleadership takes the mystery out of what’s needed to succeed. All of us are capable of beingleaders. The best leaders among us will get there because they work the hardest at it.”

Bob Morrison, Vice Chairman of the Board

“Our future demands that we develop leaders, and give them the tools to leadsuccessfully. It starts with articulating the behaviors we value — those that driveresults and inspire others to deliver their best.”

Indra Nooyi, President & Chief Financial Officer

“We need to improve the feeder system that cultivates people for bigger jobs.This leadership model is a big step in the right direction.”

Brock Leach, President & CEO, Tropicana Products, Inc.

“The new leadership model gives us a very clear answer to the first question I hearat every new employee gathering: ‘What does it take to be successful at PepsiCo?’This model allows us to answer that question in a consistent way that is supportedby our own experiences at PepsiCo. It’s a great development tool.”

Al Bru, President & CEO, Frito-Lay North America

“The new PepsiCo Leadership Model brings to life winning, ‘field-tested’ competencydimensions. The sharper focus on change leadership, thinking skills, collaboration,and inclusion highlights competencies essential to our success in building the World’sPremier Convenience Foods and Beverage Company.”

Page 15: PepsiCo Leadership Competencies / Model

Rogelio Rebolledo, President & CEO, Frito-Lay International

“The PepsiCo Leadership Competencies provide a useful tool for projecting ourcorporate values to employees, customers, distributors, and consumers worldwide.”

The Senior Leadership Team

14

Peter M. Thompson, President & CEO, PepsiCo Beverages International

“We now have a leadership model that reflects our global aspirations, and that willeffectively shape leadership in any corner of the world.”

Michael D. White, President & CEO, Frito-Lay Europe/Africa/Middle East

“The PepsiCo Leadership Competency Model paints a crystal clear picture of the leadershipskills and values that have consistently proven to be a winning success formula for PepsiCo inall parts of our global company. More importantly, this effort to update and refine thecompetencies gives us an enormously valuable tool for developing the next generation ofPepsiCo international leaders given how geographically and culturally diverse all of ouroperations are around the globe.”

Sue Wellington, Senior Vice President & President U.S. Beverages,The Quaker Oats Company

“Leadership without management is chaos. Management without leadership takes younowhere. I’m glad to join a team that recognizes the need for both.”

Gary Rodkin, President & CEO, Pepsi-Cola North America

“The leadership competencies in this brochure will support the professional develop-ment efforts we have underway at PCNA. They provide clarity on the leadership skillsour managers will need to develop and hone to achieve their career objectives. We’llincorporate these competencies in our professional development at PCNA.”

Page 16: PepsiCo Leadership Competencies / Model