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Converting Strategy into Results
The Promise of PepsiCo
San Antonio, TX
February 25, 2011
PepsiCo is one of the largest Food and
Beverage Companies in the World
Major Brands: 19 Billion Dollar Plus Brands
– Frito Lay
– Gatorade
– Pepsi Cola
– Quaker
– Tropicana
Global Distribution
– Businesses in Virtually Every Country in the World
– 700 Company Owned or Licensed Manufacturing Sites
High Visibility
– Water
– Energy and GHG
– Land Fill
3
Support From the Top: Performance With Purpose
“Performance with Purpose” mission: our belief that our financial success — Performance — must go hand-in-hand with our social and environmental responsibilities — our Purpose. We call this “the Promise of PepsiCo is a manifesto that includes ambitious global goals — 47 commitments in all — that will guide our company this decade”
The Challenge of Alignment and
Implementation
Integrated in
Business
Strategy
Headquarters Field
Aligned
with Core
Values
Compliance
“We have set targets for the Field”
“Global Tools with Local Solutions”
“This is a company mandate”
“Work through the Regional and Site
Captains”
“Sustainability can be self serving and
whole serving”
“It’s in our AOP and
Evaluation”
“We will do it our way”
“It’ll Never Work”
“We have to imbed sustainable practices or
we wont be doing business in the future”
“We Need Help”
Dr. Peter Senge: The Creative
Tension Model
The gap between vision and current reality creates the “creative tension”
The larger the gap between vision and reality, the more tension exists
ENERGY to
CHANGE
•Dr. Peter Senge
o Founder of Society
for Organizational
Learning (SoL)
o Author, The Fifth
Discipline (1990) and
The Necessary
Revolution (2008)
o Professor at MIT
Converting Strategy to Results
Create the Vision
Create the Tension
Enable Success
Recognize and Reward
The Promise of PepsiCo Creates and
Enshrines the Vision.
7
• Leading Innovation in Water Stewardship – Achieving 2015 Goals and
enabling Positive Water Impact
• Minimizing External Waste – Zero Landfill
• Innovation in Carbon Reduction – Enterprise and Product Level reductions
• Building Community Trust – Human Right to Water, Sustainable Agriculture
Create the Tension with Globally Aligned
Objectives
First Universal Operating Targets in PepsiCo
Tracked at Every Level in the Organization
Water Reduction Targets are ahead of Plan, Fuel and Electricity are on flight plan
-8-
MFG WATER L/L or KG MFG FUEL per Unit MFG ELEC per Unit
20%
Reduction
‘15 vs ‘06
25%
Reduction
‘15 vs ‘06
20%
Reduction
‘15 vs ‘06
Build Capability : ReCon is the Most Widely Used
Tool within PepsiCo and its Supply Chain
STAGE I
Common Priorities
Climate Change Water Land/Waste
Awareness
Energy Efficiency People Practices
Water Value
Water Conservation
Awareness
Waste Reduction
Recycling Practices
Waste Value
STAGE II
Critical Systems
Combustion
Compressed Air
Refrigeration
Water Treatment
Process Water
Waste Water
Packaging
Product
STAGE III
Enterprise Solutions
Absolute GHG
Enterprise Solutions
Life Cycle Analysis
Watershed Mgmt.
Water Balance
Enterprise Solutions
Zero Landfill
Enterprise Solutions
STAGE IV Supply Chain Reapplication
Energy Efficiency
Absolute GHG
Water Risk
Mitigation
Supply Chain
Waste Reduction
Waste Value
Zero Landfill
From “In House” to the Supply Chain
Today
2011
Future
ReCon has established PepsiCo’s leadership,
from fundamentals to breakthrough research.
STAGE I
STAGE II
STAGE III
STAGE IV
Walkers 34.5 grams
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
Pepsi 2L
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
Pepsi 2LWalker’s 34.5 gm
CO2e Content
Agro/Ingredients
Packaging
Transportation
Processing
End Of Life
Legend
1070 Gm CO2e80 Gm CO2e
Enabling Tools, Metric Indicators
Best Practice – Broad Deployment
Go Deep on the Critical Systems
Best Practice – Targeted Deployment
Expert Partnerships (TNC, WRI)
Enterprise-wide Impact Drivers
Research Partners ( Columbia, MIT)
Supply Chain Impact
All Stages of ReCon are supported
by Universal Tools
PI Xpert Diagnostic ReCon
Scorecard
On Line Profilers
for Energy, Water
and GHG
The XPERT Diagnostic is the
Single most applied tool
In the program – 200 sites
In all Sectors, Multiple Co-Packers,
Suppliers and Franchises. 27 Audits
In First 3 Weeks of 2011!
Hotlist
Building Capability in “Green Design” :
Sustainable Engineering
Identify and Deploy New Technology
Promote Good Ideas from Local to Global
Leverage Knowledge Management Systems to Spread Expertise and Capability
Support LEED Certification and similar programs
Aligning Sustainable Engineering with LEED
Certification.
Nanchang
Azov
Chongqing
Monterrey
PepsiCo has earned 19 LEED
Certifications and has more in progress.
Complete In Progress
Building Capability through
Knowledge Management Tools
Sustainable Engineering Guidelines
– On-Line LEED Guidance
– Green Product Search
– Best Practice Library
– Credit Submission Examples
Certification Support
– In-House LEED AP Guidance
– Consultant Support
Low Cost Certification
– Minimize Consultant Reliance
– Overcome Cost Objections
Reward and Recognition: At the Site
and for the Individual
Demonstrated Sponsorship
Excellence in Implementation
Impact to the Business
Creativity in Sustainment
Center of Excellence Award
• Above & beyond to achieve breakthrough business results.
• Outstanding performance with purpose in core accountabilities.
• Recognized leader and role model by management, peers, and/or customers.
Success Criteria
Invest in Alignment – it pays off
Avoid Shortcuts – not sustainable
Stay the Course
Recognize and Reward – Early and Often