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LBP Diversity & Inclusion Case

An examination of the HBS Business Case on diversity and Inclusion at PepsiCo
by

Joel Eigege

on 17 May 2011

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Transcript of LBP Diversity & Inclusion Case

The Journey to World Class
Diversity & Inclusion Team Members Mark Abbott
Tom Arnett
Joel Eigege
Reneer Fisher
Eddie Garcia
Carlos Quintero Agenda Introduction -Diversity and Inclusion
Case Summary
Case Analysis
Parallels to Ryder
Research Review
Recommendations Introduction to Diversity & Inclusion Diversity - Who we are and what we bring to work everyday

Inclusion - Championing and leveraging the benefits of our differences Diversity & Inclusion began in the early 90's
D&I has become increasingly improtant with:
1. changes in labor demogrphics

11. increasing globalization and changes in the consumer dempgraphics

11. changing patterns of work organization, productivity and competition PepsiCo Diversity Case Summary The PepsiCo case study discussed the evolution of diversity and inclusion throughout the company’s history. The vast majority of the case focused on the journey of one particular CEO, Steve Reinemund.

The diversity and inclusion journey was faced with multiple challenges during the quest to align “the head and the heart” of the company. PepsiCo experienced a transformation from a primarily performance based/results driven culture to a culture that focused on people development as part of the diversity and inclusion initiative.

With a changing of the guards, PepsiCo focused on maintaining momentum and taking diversity and inclusion to the next level now that a woman of color, Indra Nooyi, was leading the company. Introduction Case Analysis How to make diversity a key element in PepsiCo's performance / results driven culture
Creating awareness of the importance of D&I on the business

How to align the head and the heart (diversity driven results vs the right thing to do)
Creating an inclusive enviroment where diversity is engrained in
everyday culture
A culture that is commited to D&I and individuals have "buy-in"

How to maintain the Diversity & Inclusion momentum with a "changing of the guard"
Impact of losing the "champion" for diversity
Impact of having a woman of colour as CEO Case Analysis - Key Issues Case Analysis - Evident Leadership Competencies Judgement : Strategic Agility - Pepsi was able to adapt to the changing consumer demographics, aligning their marketing campaigns to these changes.
Character : Approachability - The "authentic" conversations that menbers of minority groups were able to have with leadership lead to the enhancement of the Employee Resource groups which became an integral part of PepsiCo's D&I initiative
Results : Drive for Results - PepsiCo originially initiated their D&I intitiatives for the sake of improving business results by increasing penetration amongst under-represented groups
Relationships : Managing Diversity & Inclusion - In the end, it is not so much about having diversity, but managing diversity. PepsiCo was able to manage diversity by Parallels to Ryder Similar Culture:
PepsiCo was a performance / results driven culture

Similar Structure
Largely autonomous and decentralized operating units

Similar Employees:
Employee initiated Resource groups
Leadership commitement to D&I

Similar Diversity & Inclusion Journey:
Shift from divesity to inclusion
Increasing focus on people development vs representation Research Recommendations Characteristics of Diverse and Inclusive Organizations Awareness - organizations must be aware of the benefits of D&I

Persistence and Commitment - persistence to try mutiple things (especially
in the beginning), assurance from the top

Empathy - towards every individual and group

Tolerance and Understanding - of different cultures and groups

Adaptation to Change - ability to change with shifting business and
labor market environments

Inclusion - making minority groups feel included Effective Diversity Managment Just having diversity does not guarantee greater business success

Proper diversity management develops initiatives within a framework
that considers the follwoing variables:

1. Company culture
2. Corporate Business strategy
3. Inclusion of all groups - even the majority
4. The nature of work tasks

It also aims to emphasize the characteristics of successful D&I organizations

"It's Diversity Management Stupid!" Recommendations for PepsiCo Continue to reinforce initiatives for D&I journey
Continue D&I governenace council (Commitment)
Maintain employee resource groups (Tolerance and Undersatnding)
Maintain consistent messaging on the necessity of D&I (Awareness)

Push personal responsibility and "buy-in" of D&I
Contniue and expand D&I education and training
Leverage the power of social media Reinforce the established culture of aligning the head with the heart
Increase community and charity involvement (Empathy)
D&I mentoring program
Conduct pulse surveys to assess alignment

Expand the diversity definition so that it is not only focused on "social diversity" but also "informational" and "value" diversity
This will help with the concerns around increased globalization
Improve problem solving and creativy to deal with changing competion Recommendations for PepsiCo Ryder D&I Recommendations for Ryder Employee Resource Groups
Strengthen groups to increase employee involvment in D&I

Talent Management
Recruit, develop, retain
Making Ryder the employee of choice for diversity candidates

Impactful to the across all segments (field & HQ)
Incresing scorecard relevance and accountability for D&I
Make community involvement part of succession planning

Feed diversity from across functional employees
Leverage resources across segments Recommendations for Ryder Publish Diversity and Inclusion measurments
Show commitment to D&I and increase awareness

Expand diversity and Inclusion measurments
Avoid misrepresentation of D&I progress

Cascade diversity and inclusion throughout organization
Sublet groups supporting D&I council
Increase D&I communication and education

Expand diversity and inclusion internationally
Current D&I initiatives, including training are focused on ony U.S. True diversity and inclsion occurs when we have aligned the "head" with the "heart" Ryder Diversity & Inclusion Diversity began in 2000. D&I initiative did not begin till 2008 with the creation of the D&I council.

Ryder defines diversity as who we are and what we bring to work. Inclusion is defined as leveraging

The key goals of the D&I council is to determine the D&I mission and vision and the strategies required to implement these.

Some of the key initiatives include, the President's Initiative, Diversity Slate etc The Journey to World Class
Diversity & Inclusion True diversity and inclsion occurs when we have aligned the "head" with the "heart" Driving Business Results Doing the right thing The Case for Diversity & Inclusion It's the right thing to do
Create an environment where indivduals feel valued despite their differences Drive business results
Improve productivity and creativity through perspective
Align company representation with consumer / customer demogrpahics The Heart The Head Changing patterns in labor market demographics
Increasing globalization
Changing patterns of work organization, production and competition Changes in Business Environment that make Diversity Imperative RESULTS Developing Direcet Reports: PepsiCo moved from a D&I initiative that was focused on measurement to one focused on people development

Drive for Results: PepsiCo originally initiated the D&I initiative for the sake of improving business results by increasing penetration amongst under-represented groups. Tying D&I to the bonus also shows their drive for results. RELATIONSHIPS Building Effective Teams: The marketing teams that were established are an example of how teams need to be created with the right perspectives to achieve a goal

Managing Diversity: In the end, it is not so much about having diversity but being able to manage it. PepsiCo was able to manage diversity and reaped the benefits in improved sales and creativity JUDGEMENT Strategic Agility : PepsiCo was able to adjust to the changing comsumer dempgrpahics and align its marketing campaigns to these changes.

Innovation Management: Pepsi managed innovation to create new products for the new markets they looked to penetrate CHARACTER Approachability: The "authentic" conversations that members of the Leadership had with the Employee resource groups examplify approachability

Integrity & Trust: These were necessary requirements after the "authentic" conversations. The employee resource groups must have trust in leadership to act on their integrity and do the right things with regard to diversity. Evident Leadership Competencies Building Effective Teams
Managing Diversity Developing Direct Reports
Drive for Results Approachability
Integrity Strategic Agility
Innovation Management Strengths Leadership Commitment
Diversity & Inclusion vision is very expansive (covers more than the traditional diversity groups)
People Opportunities Lack of Awarness (awareness of benefits of D&I, tools in place for D&I)
"Tangible" results driven culture
Diverse representation reduces as you go up in the prganization With all due respect...would you do it if it weren't good for business? Employee Resource Groups

Initiate employee groups to increase affininty
Use as recruiting channels for other diverse candidates Recommendations for Ryder Cascade D&I throughout Organization

Use sublet diversity councils to cascade
Increase communication on diversity
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