Think Broadly About The Business Model — Uncertainty upends entire value systems. During times of uncertainty, business leaders must think deeply about vulnerabilities of the business model and candidly assess areas of risk before forces of obsolescence exert change exogenously. At PepsiCo, we are exploring new business models and partnerships all over the world (domestically and abroad) to complement our traditional growth categories and terrains.
As part of our series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times”, we had the pleasure of interviewing Parth Raval, Senior Vice President Corporate & Global Groups Strategy & Enterprise Transformation at PepsiCo. based in Purchase, N.Y.
A 16-year veteran of PepsiCo, Parth has worked across Corporate Strategy/Global M&A, the India Beverages BU in Sales, the AMEA Sector Sales Team in Dubai, Frito-Lay Field Sales in Texas, and led the Frito-Lay Walmart Customer Team. He is additionally the New York Executive Sponsor for the PepsiCo Asian Network (PAN).
Parth started his career in management consulting at Bain & Company based in San Francisco and London. He has a B.S. with high distinction from Stanford University and M.B.A. from Harvard Business School. Parth lives in Greenwich, Conn. with his wife and children.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
One of the things I have always enjoyed is connecting the dots across disparate domains in an effort to drive a path forward. At Stanford, I studied Symbolic Systems — which was an inter-disciplinary field of study between Computer Science, Philosophy, Psychology and Linguistics. Essentially this is the study of information and how it is encoded, interpreted and understood by machines and humans.
I started my career in management consulting — at Bain and Company — which served as a tremendous platform for learning about different industries, with the additional challenge of synthesizing/distilling a problem to its essence and driving others to action. That foundation was a springboard for my PepsiCo career, which has spanned 16 years, 4 continents, 9 moves and multiple functions and lines of business including Sales, Finance and Strategy/M&A. At every step of the way, however, I’ve tried to keep this theme of focus and drawing connections at the forefront of every challenge I have tackled.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Very early in my career I made the transition from Strategy/Staff roles to leading frontline Sales at PepsiCo. It was my first foray in people leadership. In the first few months during this transition, I never thought to consider the subtler elements of what it takes to generate traction in large, diverse teams. Small things, like not having lunch every day with the Sales team, was something that I didn’t consider as a valuable way to build a rapport with my team and establish trust. After getting some invaluable direct feedback, I realized something so simple, like taking the time to connect on a personal level, would go such a long way. This experience taught me an indelible lesson in leadership early on, namely the critical importance of situational awareness in different leadership contexts. This simple learning from early in my career has been something that I have carried with me throughout life and has enabled me to more effective as a people leader.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
An absolutely stellar leader that I owe a lot to is Steven Williams, CEO of PepsiCo Foods North America. I reported to Steven when he was the Chief Commercial Officer for PFNA and I led the Walmart team for the Frito-Lay business. Steven taught me countless leadership lessons about understanding the materiality of different types of decision-making, and valuable perspectives on flexing my style across different, high-stake situations. What is more, Steven’s support in high-pressure situations was unwavering, underscoring his commitment to ensure that people grow to reach their potential. Steven was instrumental in helping me develop my skills to get an organization to rally around getting the resources that you need to be successful and effective, skills that will be useful throughout many stages of my career.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
PepsiCo has always been an intentional and purpose-driven organization over the decades. Obviously, this sense of purpose has evolved to adapt to the external environment. Today, our organization truly anchors itself around creating smiles with every sip and bite across billions of consumers that enjoy our products. In order to get there, the organization has been deliberate about creating a clear and distinct framework that grounds our purpose / activities holistically across three key buckets: Faster, Stronger and Better.
Faster is all about ensuring that we are building a growth-oriented organization that is deeply consumer-centric. This involves getting to know our consumers intimately and ensuring that we bring to market a portfolio that delights their evolving needs and tastes.
Stronger ensures that PepsiCo builds best-in-class capabilities and culture, leveraging our global scale but also ensuring that we are locally enabled. In doing so, we will build a differentiated organization.
Finally, Better is about integrating purpose into the business strategy directly and doing even more for our planet & people in our communities.
The framework is powerful and guides everything we do at PepsiCo, and is particularly effective in its simplicity, yet thoroughness to ensure that we are the premier CPG company in the marketplace.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
Perhaps one of the most telling examples of leading a team through uncertain or difficult times is the stretch we are living through right now with remote-working across a global team during COVID. First and foremost, it’s critical to recognize that people all process and cope with remote working, a seemingly endless barrage of Zoom meetings and calls, and diminished social interaction in many different ways. There is no one-size-fits-all approach to leading teams during such times and as such I’ve found that it is helpful to go back to first principles: being available, over-indexing on trying to draw connectivity across teams, and bringing folks together (virtually) for non-work related interactions.
We’ve tried to abide by two approaches during this time: 1) being transparent about sharing information about return-to-work and evolving corporate policy, frequently and clearly. Doing so has helped everyone plan their lives better. 2) Eliminating any stigma/concern about where people are, what time zone people are working in, etc.
Ultimately, there will be bumps along the way. Individuals are experiencing unprecedented levels of stress and burn-out as a confluence of factors impact daily life. Trying to understand where as much of your team is at is an obvious but critical first step, knowing that people inevitably process and manage through this time differently.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
Uncertainty, change and volatility impacts everyone differently and it is inevitable that individuals will go through ups and downs along the way. Personally, I do find motivation in working through the challenge to get to an “answer” or outcome and try to surround myself with individuals/teammates who are similarly minded. Having said that, it’s critical to ‘re-charge’ in the midst of challenges. Taking a step back and away from the problem — even if for a short amount of time — nearly always allows me to come back with a sharper and more focused view to the problem.
What would you say is the most critical role of a leader during challenging times?
Broadly, there are three key roles that a leader needs to play during very challenging times:
- Getting Resources & Removing Obstacles — First and foremost, the leader has to ‘clear the board’ to enable the team to get done what it needs to accomplish; the real work happens in the trenches and it is critical for the leader to have a pulse on what the root causes of problems/obstacles and working through removing them actively. As opposed to creating more “overhead” — particularly when tension is high — it’s important to prioritize progress over perfection and for the team to feel empowered to do their work.
- Thinking Through “Option Value” — Second, it’s really important to think through contingency plans & to constantly work with the team to triage these options. When things start moving very fast, it is really important to think ahead and solicit the views of the team to anticipate what could go wrong and find ways to ‘de-risk’ the future
- Demonstrating “Visible and Available” Leadership — Thirdly, and I’d submit most importantly, is visible and available leadership. Leaders have to be really present themselves as accessible and there for those that dependent on their perspective and decisions. We cannot under-estimate the power of simple questions such as “How can I help?” The best leaders I have worked with consistently demonstrate this mindset during times of difficulty and it makes a world of difference to the teams.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
As simple as it sounds, celebrating even the smallest of wins/progress along the journey means a lot to teams. When a leader recognizes great effort and progress, it can keep the team going. Time and time again, you see how change is toughest ‘in the middle’ of the effort itself, and celebrating the small wins becomes incredibly important.
Additionally, I have found that constantly reinforcing the ‘end-state’ is critically important for teams. All of us have a basic need to understand and feel part of a broader context and sense of purpose. Especially during times when the future is uncertain, doubling back on the ‘true north’ that orients the work is of the utmost importance.
What is the best way to communicate difficult news to one’s team and customers?
Difficult news is inevitable, and I have always found that — first and foremost — this sort of news is communicated early and directly. It’s important to prepare and reflect before communication, but critical to do so in a way that is authentic and timely. If teams and/or customers feel that the news has been overly processed or managed, they can tend to draw their own conclusions and ‘fill in the blanks’ in a manner that can actually be counter-productive. Furthermore, it is important that there is a two-way dialogue during the communication of tough news. Doing so creates the ability to further refine news as you continue to cascade the messaging more broadly, incorporating broad feedback and concerns to make the communication even more impactful and effective.
How can a leader make plans when the future is so unpredictable?
It is becoming more important than ever to leverage scenario-based thinking and planning in an increasingly uncertain world. Thinking through a ‘cone of possibilities’ allows for leaders to think through conditions that will allow for the most appropriate decisioning in the face of so much certainty. At PepsiCo, we are leveraging this sort of approach more broadly across our businesses, coupled with clear “leading indicators” that enable us to gauge which actual scenario we find ourselves in.
Furthermore, it’s important to place several “small bets” that support the emerging scenarios. Doing so allows for any organization to be “fast to the future” as actuals unfold. The bets should clearly be ‘no-regrets’ moves, allowing us to learn and be ready to scale as leading indicators get stronger over time. Additionally, at PepsiCo, we are looking towards the future with a digital-first mindset as we continue our digitalization journey by innovating across the organization.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
This is a great question. While there are multiple vectors that a company needs to manage during turbulent times, leveraging “systems thinking” to drive outcomes is one of the most critical of broader organizational principles to ensure is in place. Specifically, it’s important to get the right people in the room — across functions, geographies and/or other relevant layers in the organization — to bring the collective together to think towards a more complete and robust solution. In times of extreme uncertainty, the best solutions/path forward can come from multiple places. Furthermore, taking a systems approach can help to generate adoption and buy-in early on in the process.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
Perhaps one of the most common mistakes during times of uncertainty is the lack of both short-term tactics and long-term vision. Oftentimes, we see companies that have one but not the other. Having the long-term view in mind without near-in tactics makes the enterprise susceptible to shocks and can shake broader confidence (and organizational patience). Perhaps just as woeful is when organizations are only thinking short-term, without a view to how the ‘new normal’ could look and preparing for a new opportunity set on the other side of the storm.
Additionally, we often see situations where organizational biases emerge during times of crisis or uncertainty that can, in fact, cloud an entire enterprise’s ability to react and course correct as needed. Whether it be group-think, confirmation bias or recency effects, many otherwise stellar organizations can go astray during periods of intensity. We have seen in this in our industry numerous times. The organizations that are acutely self-aware and pro-actively seek out a balanced set of perspectives (including bringing in talented leaders from the outside) tend to do well in the long-term.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
In our industry in particular, a maniacal focus on the consumer is a key principle to drive growth and profitability. At PepsiCo, we have redoubled our efforts and focus to build even deeper and broader consumer-centricity — understanding changing needs, perspectives, willingness to pay, cost-to-acquire and serve and more. Furthermore, becoming even more collaborative with key partners & customers becomes essential. Tough economic conditions create tremendous dislocations, changing growth and profit pools. Understanding how to work jointly with customers to find truly ‘win-win’ solutions helps to shore up execution against emerging/new opportunities.
On the cost side, volatility creates an essential need to think holistically across all cost lines, not only to drive out unessential cost, but also to provide oxygen for growth investments. COVID, in particular, has re-shaped thinking in unprecedented ways — what do we really need? What can we do without? Uncertainty creates the opportunity to re-think long-held notions of what is critical. At PepsiCo, the resiliency and ingenuity of our teams to drive market-leading performance with a new operating model has demonstrated to us that we can surgically think about cost without compromising top-line growth and executional excellence.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
There are numerous elements that business leaders need to think through leading and managing through such turbulence. A few of the most salient things to bear in mind would include:
- Think Broadly About The Business Model — Uncertainty upends entire value systems. During times of uncertainty, business leaders must think deeply about vulnerabilities of the business model and candidly assess areas of risk before forces of obsolescence exert change exogenously. At PepsiCo, we are exploring new business models and partnerships all over the world (domestically and abroad) to complement our traditional growth categories and terrains.
- Assess Organizational Capability, Today & For Tomorrow — During times of change, organizational mettle is tested from the C-Suite to the frontline. It’s critical to assess organizational capability along numerous vectors, from strategic to tactical capability. Leaders must develop a good view of what their organizations do well and where there are gaps. We have deeply considered the enterprise capabilities that we as an organization are building at PepsiCo, including broad-based commercial and strategic capabilities across the value chain.
- Focus on Your People and Associates — Frequent communication and connectivity with key leaders and associates in the organization is always important but takes on another worldly importance during periods of uncertainty. From the very top of our organization, PepsiCo has dialed up the communication frequency and transparency across all levels of the company. We remain committed to connecting the enterprise in new and novel ways, including virtual ways-of-working, which has facilitated this in a very real manner.
- Keep An External Orientation — While being externally oriented is always a good idea, leveraging external networks to find solutions during times of uncertainty is essential. The ability to drive novel business combinations during such times can create entire new pools of value to exploit and layers of competitive advantage.
- Transform into a Learning Organization — Uncertainty changes the “rules of competition” and commonly held beliefs of how to get things done. More than anything else, it’s critical for business leaders to ensure that their organizations — structurally/functionally and at the level of individuals — are constantly learning. We at PepsiCo have become hyper-focused on prioritizing learning across all cohorts and groups of our associates. Doing so takes times but helps to ensure that we are constantly relevant and contemporary in our approach to our business.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
One of my favorite quotes is from Ben Franklin: “Tell me and I forget. Teach me and I remember. Involve me and I learn.”
I’ve always considered myself a learner and curious about many domains. I think a lot about how to get even more adept at learning and ensuring that others learn to the best of their ability and potential. Time and time again, I have been amazed by the power of involving others in the learning process to drive true internalization of any area of learning. In a sense, this quote brings together many of the themes discussed above, and to me becomes even more crucial during periods of extreme uncertainty to fortify business models, build unassailable resilience, and foster teamwork.
I try to do this with my teams and ensure that I am a part of broader teams that value this approach. In the process, I have seen just how powerful the collective can be in pursuit of goals.
Thank you so much for sharing these important insights. We wish you continued success and good health!