As the head of a company best-known for soda and chips, PepsiCo's Steven Reinemund might be finding his job tough these days. But Reinemund doesn't worry about Americans' obsession over carbs and sugar. For him, it's just another opportunity to further expand PepsiCo's product family. Senior writer Diane Brady recently spoke with the PepsiCo (PEP) chairman and CEO, who is one of BusinessWeek's top managers of the year. Edited excerpts of their conversation follow:
Q: What do you think are some of your biggest accomplishments this year?
A: I think the operating performance of the business has certainly been gratifying this year -- not without its challenges, but it has been strong and balanced in all of our businesses. That gives us confidence that we've got the right business formulas going forward.
The international business is really coming into its own now. A couple of years ago, we consolidated our international businesses into one organization. It has given us scale in lots of parts of the world.
Q: Do you find talent development more of a challenge overseas?
A: The principles transfer around the world. My role is to be the enabler of growth. That growth is business growth, but more importantly, it's people growth and helping to develop the leaders that we have around the world.
There are a couple of ways that I try to focus on it. One is to be accessible and be in the marketplace and get to know the leaders we have. I teach a class once a year for a subset of our middle managers.
Q: Why is it important for you to be involved in the teaching component?
A: It keeps me relevant on what's going on and what our people are thinking. It gives me a chance to influence and mentor our up-and-coming leaders. Out of those classes come the CEOs of the future.
But it also says to all of them that we all need to take a role in developing leaders. Leaders train leaders in this company. We believe in management development, and leaders do that. The most effective way to hire people, train them, and retain them is for the line leaders to get involved. We also want their feedback on what's important to them, and what will keep them motivated and involved in PepsiCo.
Q: What, to you, are the hallmarks of great leadership?
A: I think all of us as leaders should have a dynamic idea of what a leader is. I don't think you can copy it. You have to mold it yourself and change it over time. The value of listening to other leaders is to hone your model. Every leader has to have a foundation of who they are and what they value and look for in others. Mine involves the six Ps of leadership.
Q: What are the six Ps of leadership?
A: They're not meant to be the Holy Grail. They're just my view. The first P for me is Principles. You have to have a moral compass as a leader. It starts with basic beliefs and values. It's important to make clear to the people in the organization what those are, so you're transparent. They have to be consistent with the values of the organization, or there will be a problem.
If you look at all the issues that have happened in the corporate world of the last few years, it all boils down to a basic lack of a moral compass and checks and balances among leaders. We as leaders have to check each other. We're going to make mistakes. If we don't check each other on them, you get into trouble. Most of the companies that got into trouble had a set of stated principles, but the leaders didn't check each other on those principles.
The second is Perspective. That's an ability to dream, visioning that leads to strategies. It starts with a broader view of the world you live in. The example I use is Sam Walton. His vision lives today long after he's gone. It's about value to the consumer.
The third one is Passion. Passion is not style. There are a lot of different styles -- charismatic, quiet, confident. But it all comes down to this motivating sense of commitment to what you do. I remember when I was a kid, Kennedy made the announcement that he wanted to put a man on the moon and bring him back safely to earth. That was so motivating and passionate. Nobody believed it could happen, but he inspired them with his passion.
The fourth one is Perseverance. That's sticking with it through the good times and the bad times -- mostly the bad. It means picking yourself up every day to go after it. The example I use is Roger Enrico, my predecessor, and the transformation that he did in the business in the mid 1990s. Very few people saw his vision. It didn't take right away, but he stuck with it. As a result, we have the possibility to be in a business today that's far better than it would have been had he not had that perseverance.
The fifth -- and these are not necessarily grammatically correct, it's just how I remember them -- is Performance. As I'm looking to select other leaders, it's important to remember that results count. If you can't get the results over the goal line, are you really a leader?
The last and probably most important one is People. If you can't build the people, if you can't leave an organization stronger than you found it, with more capable people than you inherited, then I question whether you're really adding value. I look at my predecessors -- Don Kendall, Wayne Callaway, and Roger Enrico -- and I think all three of them left the organization in a better place than they found it.
Q: How important have mentors been to you?
A: Absolutely critical. I can go back to being seven years old with my first mentor, and I can track through my whole life people who have had significant impact. My second-grade school teacher stepped in right after my father died. It was her first year of teaching, and I keep up with her all these years later. She stepped in and gave the extra care that made a difference.
I look at my seventh-grade social studies teacher who, when I didn't have a jacket to wear for a speech, gave me his so I could be up there with other kids who had sports coats on. And certainly in military and business, I've met many people who gave of themselves to share a bit about life and about their own experiences in encouraging me along the way.
Q: What are the challenges of your job?
A: You can never get complacent. The day that anyone says "Nothing keeps me awake," that's the day you're not trying to get better and looking over your shoulder. The shorter-term challenges going forward are to attract, develop, and retain great leaders.
Medium term, one of our greater focuses is diversity. To be a leader in consumer products, it's critical to have leaders who represent the population we serve. We're making progress in this area. But it's a marathon, and we're at mile 11. We've got a long way to go.