Going Behind the Curtain: Integrated Talent Management at PepsiCo

Allan H. Church, Ph.D.PepsiCo Inc.SVP Global Talent Assessment & Development

Association for Talent DevelopmentSouthern Connecticut ChapterOctober 17th, 2016

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Agenda

• Context Setting

Talent Management and High-Potential Identification

Key Research Insights & Trends

• PepsiCo Application

Talent Management Strategy

LeAD Program Architecture

Sample Feedback & Usage

• Building and Sustaining an Integrated Process

Enhancing the Effectiveness of the Process

Understanding the Impact of Transparency

• Final Thoughts

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Focus on the “Few”(e.g., Identifying HiPos, Session C, BoD)

Focus on the “Many”(e.g., Culture, Structure, Performance)

Talent Management & Succession Planning

Organization Development & Change

Leadership Development as the Integrator

Leadership Development

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Setting the Context: War for Talent & Resources

Talent has been a scarce resource for

over a decade and it’s getting worse

Organizations have limited

resources for development

Differentiation and talent

identification is key for

successful TM

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Research on Assessment Practices

ASSESSMENT IS HOT!

Research on 100 Top Development Companies Reports that 70% Use Assessments

Church & Rotolo (2013)

Church, Rotolo, Ginther & Levine (2015)

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Research on Assessment Tools & Methods

High Potentials (75%)

Senior Executives (90%) Church & Rotolo (2013)

Assessment Tools Currently In Use (Average of 4 Together)

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Research on Maturity of High-Potential Programs

53% are Level 3 “standardized” today. Many in early stages are considering assessments, while 87% of those in later stages already use them

What is the Maturity Level of Your High-Potential Program/Process?

(5) Business Integrated: Strategy and processes fully integrated w/ strong Exec engagement; Long-term planning standard; Business impact

measured; HP talent visible and shared; high development

(4) Transparent: HP development implemented consistently; Higher Exec engagement and longer-term planning; Full disclosure regarding

status; HP transition support moderate

(3) Standardized: Consistently implemented and integrated w/ some processes; Moderate Exec engagement but mostly short-term;

transparency status inconsistent

(2) Inconsistent: Criteria exists but varies/determined largely by mgrs. Limited exec engagement, planning & integration w/ strategy

(1) Reactive: Ad-hoc processes w/out clear criteria; No targeted development

43% currently use assessments

57% are “in development”

87% currently use assessments

7% are “in development”

Church, Rotolo, Ginther & Levine (2015)

Majority of “top companies” are far from fully integrated, and those who are more advanced are more likely to use assessments

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Fundamental Question

Better Question:Potential for What?

Good Question:What is a high-potential?

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Agenda

• Context Setting

Talent Management and High-Potential Identification

Key Research Insights and Frameworks

• PepsiCo Application

Talent Management Strategy

LeAD Program Architecture

Sample Feedback & Usage

• Building and Sustaining an Integrated Process

Enhancing the Effectiveness of the Process

Understanding the Impact of Transparency

• Final Thoughts

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Applications

Global Beverages

Global Snacks

Global Nutrition

Brands

22billion-dollar

brands

Performance

More than $63 billion

revenue

Scale

>200 countries

& territories

People

More than 250,000

employees

PepsiCo is a global food and beverage powerhouse.

Our broad range of more than 3,000 delicious products offers consumers

convenient, nutritious and affordable options in nearly every country around the world.

Business Overview

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Performance: Mix of Net Revenue (2015 Data)

Food

Beverage

Outside

US US

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Integrated Talent Management Architecture

Learn & Develop

Perform & Reward

Attract, Select, Onboard

Growth & Succession

Business Strategy

Talent Strategy

Right People in the Right Place at the

Right Time doing the Right Work the

Right Way

1

2

4

3

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Standard Paradigm

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One Size (Leader) Does Not Fit All

C-

Suite

Senior

Level

Mid-

Level

Entry

Level

1

2

3

4 7

6

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Segmentation by Levels, Roles & Functions

Types of Roles• Developmental• Critical• Transition• Pivotal• Crucible

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One Size (Hipo) Is Unrealistic

Based on Silzer & Church (2009)

Industrial-Organizational Psychology

Segmentation by Leadership Potential and Destination

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Building an Integrated Talent System

Linking role segmentation with the Leadership Potential BluePrint…

(a) targeted assessments

(b) customized development plans

(c) actionable talent decisions

(d) accelerated and enhanced bench strength

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The PepsiCo Approach

Designed to facilitate the identification, assessment, and development of global high-potential talent to build leadership bench

• Multi-level design

• Multi-trait multi-method

• Theoretically grounded

• Empirically validated

• Integrated w/ TM systems

• C-suite engagement

• Internally designed & led

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General Approach

Assessment & Development Pyramid

One-on-One : Behavioral interview, Executive

360, Hogan assessment, Custom strategy simulation

Assessment Center:In-person simulations, behavioral interview, psychometrics (Hogan, Ravens), and career aspirations

Web-Based:Virtual simulation, psychometric assessments (Hogan, Ravens),

and career aspirations

Web-Based:Psychometric assessments (OPQ, Ravens), biodata, P-O fit, career aspirations, performance criteria

Consistent Framework with Increasing Levels of Focus

Confirm and

Develop

Shape and

Refine

Verify and

Stretch

Identify and

Differentiate

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Provide

feedback to

individuals

Identify

specific

development

actions

Implement

specific

development

actions

Monitor

progress

indicators

Assess

individuals

against

criteria

The SLDC and LeAD programs add consistency and rigor to the assessment, development, and tracking of key global talent using a basic consulting model

Assessment & Development Process

CoachingStretch

AssignmentOnline

Learning

Executive MBA

Programs

PepsiCo University Programs

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Assessment & Development Roadmap

Orientation

Raven’s

Online

Critical

Thinking

Business Case

Simulation

360/ Hogan Feedback

Session

Individual LeAD

Feedback Session

Development

Phase

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Sample BluePrintDimension

Cognitive Skills

PersonalityDispositions

Leadership Behaviors

Experiences & Learnings

Functional Capability

Summary of Capability

Assessment Method Test Self-Report 360 Feedback Interview SimulationWeightedAverage

Strategic Thinking

Problem Solving

Emotional Intelligence

Growth Mindset

Learning Agility

Ambition & Drive

Inspiring Followers

Developing Talent

Financial Savviness

Customer Focus

Sample Report

Significant Strength

At Standard Levels

Significant Opportunity

Not Measured via this Method

Foundational

Growth

Career

Sample data only

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Key Integration Points with Talent Management

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Talent Call Prior to

Program

LeAD Results:

Some Potential

LeAD Results:

Moderate Potential

LeAD Results:

High Potential

High-Potential 3 14 8

Key Contributor 5 7 3

Talent Review and Sample Insights

Insights and Implications:• 8 high-potentials “confirmed” – ensure talent / career plans are robust• 3 high-potentials “failed” the assessment – need to understand why• 5 key-contributors scored some thus are “confirmed” – remain in core programs• 3 key-contributors “blew the doors off” – need to review/reconsider why not HPs

Example: • 40 People are Assessed through LeAD• 25 HPs and 15 KCs• Results show 20% Some, 53% Moderate and 27% High Potential

73%67%38%

62% 33% 27%

Sample data only

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• Context Setting

Talent Management and High-Potential Identification

Key Research Insights and Frameworks

• PepsiCo Application

Talent Management Strategy

LeAD Program Architecture

Sample Feedback & Usage

• Building and Sustaining an Integrated Process

Enhancing the Effectiveness of the Process

Understanding the Impact of Transparency

• Final Thoughts

Agenda

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No noticeable impact (2%)

Minor (9%)

Moderate (37%)

Significant (28%)

Dramatic (5%)

Too soon to tell (19%)

Enhancing the Effectiveness of the Process

Impact Do Assessment & Development Programs Matter?

What Has Been the Impact of the Assessment and

Development Process on the Business Performance

of Participants Within 12-18 Months of Assessment? Senior Leader Development Center

• SLDC Launched in 2013

‐ Over 120 senior leaders have started the process in successive waves

‐ 50 have completed the 18 month process

• All participants received:

‐ Custom MTMM report

‐ Individual feedback sessions with I-O Psychologists

‐ Development plan support and coaching

‐ Follow-up feedback survey (DCI)

‐ Follow-up participant program survey

Church & Rotolo (2013)

Church, Rotolo, Ginther & Levine (2015)

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Enhancing the Effectiveness of the Process (cont.)

Impact What Types of Results Have We Seen?

Higher Potential & Higher Performance

Ratings(3 Yrs Average)

Exiting the Organization

(Lower Ratings on 11/19)

Outcomes Over TimeProgram Feedback

I put in significant effort toward

completing the assessments 77%(92%)

My reaction following the feedback

session was positive

(negative/neutral/positive)

74%(96%)

Feedback I received gave me

insights into my leadership

capabilities

52%(96%)

Working sessions with COE to

create my development plan were

effective

44%(88%)

I have taken action toward closing

my development gaps63% (100%)

My involvement in the program

shows that the organization is

invested in my growth as a leader

67%(92%) Strongly Agree (“5”) Only XX%

Agree & Strongly Agree (top Box “4” & “5”) xx%

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Understanding the Impact of Transparency

Transparency Should We Tell People if They’re a HP or Not?

What is Your Formal Policy About

Sharing HiPo Status with Employees?

Church & Rotolo (2013)

Church, Rotolo, Ginther & Levine (2015)

LeAD Potential Leader

• Potential Leader launched to ~3,900 associates in 11 languages in 2014

– Approximately 85% of those invited accepted

– 97% completed the assessments (n=3,335)

• All participants received a feedback report with 2 strengths/ 2 opportunities & their individual level of LIFT

– 4 levels of LIFT: some, moderate, great and very great

– extent to which associates are similar to more senior leaders in experiences and capabilities as indicated by assessments.

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Understanding the Impact of Transparency (cont.)

Transparency What Happened When We Did Tell People?

Program Satisfaction

65% 69% 72% 79%

62% 63%

71% 68%

Some Moderate Great Very Great

0%

20%

40%

60%

80%

100%

Some Moderate Great Very Great

Will improve my overall effectiveness

Shows org is invested in my growthand development

Program Satisfaction by LIFT

(% Satisfied/ Very Satisfied)

Perceived Impact of Program

Employee Attitudes

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Understanding the Impact of Transparency (cont.)

Transparency What Happened When We Did Tell People?

Overall Satisfaction by

Reports Feeling “Like Me”

33%31%

61%

84%87%

0%

20%

40%

60%

80%

100%

Not at all likeme

Not like me Neutral Like me Just like me

49% 44%59% 64%

Some Moderate Great Very Great

% Who Felt the Report was “Like Me” by LIFT

53%

average

Report Was “Like Me”

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Understanding the Impact of Transparency (cont.)

Transparency What Happened When We Did Tell People?

Some Moderate Great Very Great

Long-Term Rating

Short-Term Ratings

Performance

1 Year Later

Met Key

Objectives

Exceeded

Objectives

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Agenda

• Context Setting

Talent Management and High-Potential Identification

Key Research Insights and Frameworks

• PepsiCo Application

Talent Management Strategy

LeAD Program Architecture

Sample Feedback & Usage

• Building and Sustaining an Integrated Process

Enhancing the Effectiveness of the Process

Understanding the Impact of Transparency

• Final Thoughts

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• Final Thoughts

HR Strategy linked to the Business Strategy

Aligned set of frameworks (Hipo, Leadership, Functional)

Assessment, differentiation, and feedback creates energy

Data can be used for used and misused (content and validly matter)

Decision making systems have consequences (purpose, tools, targets)

Talent Management is About Making Decisions on People