What We Can Learn From the Management Shakeup at Pepsi

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PepsiCo recently moved a lot of people to different seats at their management table. Any time there’s change in a company as large and diverse as Pepsi, investors get nervous. So, did Pepsi do the right thing, and what can we learn about their management decisions? Let’s take a look.

Tom Greco, CEO of Frito-Lay North America is out, leaving to become CEO at another company in another industry. Indra Nooyi, Chairman and CEO of PepsiCo, sent Greco off with strong words of encouragement and appreciation: “Tom has been a strong and valued leader for more than three decades, and he has made lasting contributions to our business.”

But, regardless of the amicable departure, Nooyi and company needed to fill Greco’s spot. The Chairman seemed undaunted: “We wish (Tom) nothing but the best as he begins a new chapter in his career. PepsiCo’s deep bench of world-class leaders and top-notch talent allow us to elevate our next generation into bigger roles.”

This quote telegraphed the companies next move … well, series of moves. Several promotions followed. Al Carey was promoted to CEO of North America, where he will oversee North America Beverages and Frito-Lay North America, as well as Quaker Foods.

Kirk Tanner, the current COO of North American Beverage will move to president and COO of NAB. The promotion gives him more responsibility and decision-making power in a line of business he is very familiar with.

Vivek Sankaran, current COO of FLNA has been promoted to president and COO of FLNA. A relatively new Pepsi executive, Sankaran has made good use of his time, becoming familiar with brand strategy and business operations in many facets of the company. He is already a trusted brand advisor.

So, what can we learn? First and foremost, Nooyi is not sweating this move because everyone saw it coming and prepared accordingly. PepsiCo can promote from within because they took the time to invest in and develop their team for when it was time for them to step into senior management roles. Carey, for example, has been with the company more than three decades. His familiarity with various facets of operations will allow the company to put three major divisions under his supervision, streamlining both operations and accountability.

Tanner has more than two decades at the company and similar broad oversight experience. Sankaran is also a proven leader. Each of these individuals were trusted with responsibility where they flourished and showed themselves to be exceptional. Because they were given those opportunities they were ready when the boss needed them to do more.

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