PepsiCo- session 11

      What is Pepsico’s strategy?

t      The strategy of PepsiCo is to change course with ever knowledgeable customer in this information age. The taste and demand of the customer has shifted to healthy drinks and healthy food in general. In addition the strategy of Pepsico is to expand through acquisition with diversification of their products in what they call fun for you, better for you and most importantly good for you products which are their healthy products such as Tropicana and Gatorade which is sports energy drinks. They are losing their ‘home customers’ to their arch rivals Coke and others as well as their stock shares are frozen i.e. stagnated which indicate the effects of these have not yet materialised due to their lack of flexibility with the age and technology, simply to rally 2012 may be little late in the game of healthy food, never the less they are on the right truck. PepsiCo seems to be stronger outside their home market such as China the world’s largest market to be in 10 years with the greatest buying power. With this new strategy Pepsico strategise to increase their overall revenues $10B to $30B per annum which seems to be more of rhetoric than reality as this is big jump of more than two folds. However their observation and couscous expansion to foreign cultures is strong point which is explained further in the next question. 

  

       What are the strengths and benefits of the strategy? What evidence is there that it is an effective strategy that they should continue to pursue?

      In this time of technological advances and the availability of more information to the consumer, people  are evermore literate in what they are buying and studies of consumer trend conducted by agencies like Mintel are showing that people are their most self conscience yet, which basically results shift from unhealthy beverages to healthy drinks and as time goes this trend will even get stronger as a result PepsiCo is responding to consumer change by investing more healthy drinks in their division of good for you which generates more than 70%  of their revenues. In addition they seem to realise whom so ever establishes their products in new markets such the fast growing markets in the Pacific i.e. China, Indonesia and Malaysia will position themselves in leading global companies, not to mention the acceptance of these market’s peoples as known products. Hence PepsiCo is giving this region a tremendous attention, with that, carefully penetrating into these markets by getting in line with the cultures of Orientals specifically using their crops and flavours.  

           Finally, what do you think they should do

PepsiCo has two major areas to improve which are interdependent to each other in some cases. Just like Carrefour had problems with their stake holders and stock market shares therefore could not afford to bare the fruits of their new changes because of anxious creditors and share holders, they need to communicate well to their share holders just like the Faslane management has done so, otherwise they will flip flop in their strategies just as they are doing with their advertisement fiasco in the NFL Super bowl add. Plus they may need to change their generic strategy towards to their marketing in the sense that people should be aware of PepsiCo is in the healthy products, because all the good success coming from in good for you division does not benefit the brand name of Pepsico as the customer is not aware of the Pepsico existence in them i.e. Customers are oblivious to Tropicana is part of PepsoCo. There is no telling the importance of brand value in the minds of consumers. Also they need to invest none sugary fizzy drinks because people want to maintain the test of regular Pepsi but not the health consequence and diet has been surpassed by zero sugar a product that Coke is proud of and Pepsi lacks.

Faslan- session 10

1. Why was the Faslane change successful? What did they do (or not do) that helped them to succeed?

John Howie and his team of Bapcok knew very well the purpose why they were there to achieve change of reducing cost and improving operational effectiveness as they executed very effectively. They knew that the change would be about the people as they did not own any assets in Faslane. Therefore as part of their agreement with MOD they set a target of 76 M savings without affecting the service provided to the Navy hence they had clear goal which is solidified by the scenario that their profit is correlated by the savings they make ‘no saving no profit’ was the bottom-line and this worked not only for them but also for workers because part of the reduction would be given to employees as profit ‘great motive’.

Changing people requires legitimacy being seen as ‘charismatic’ winning hearts and minds which they understood very well. The first challenge was to reintroduce the purpose of Faslane as to who is the customer rather than then keeping the status quo thinking of the faslane workers in which they thought they were there longer and focused on infrastructure in the expense of providing service to the Navy who is paying their salaries. In other words the culture of Faslane was that they were run as government department and needed to convert to private sector environment. Therefore Babcok shifted focus and importance from infrastructure to Navy.

Another great observation was identifying the underlying factors why the public sector managers had no interest in reducing costs which was rather destructive reward system in place as they had large budget in the first place and if they had not spent it all they would face cuts next year. Howie’s team saw this as problem precipitated by the way the system in place groomed them ‘ they way they were brought up’ had nothing in common with the mission of saving or efficiency achieving the goal with the minimum spending possible, the issue was ‘mindset’ which means culture.     

The existing structure of Faslane had to be retuned in order to empower the officials to make speedy decisions to enhance efficiency; there were very steep vertical seven layers of organizational procedure which compromised the officials autonomy as government elected representatives could question every decision made by the in-house officials, this created attitude of avoiding ‘political accountability’ hence was ‘handle turning’ exercise ie they had to prioritise to explain why they made a decision rather making proper decision itself the very essence of management.  

There was reluctance to change and complacency from the employee’s point of view that Faslane is the manufacturer of nuclear deterrent for the nation, as a result there is no need to change, no need to save hence they were ‘ring fenced’ however these perceptions were rather cosmetic fear, the genuine underlying fear was the uncertainties associated with change, they were even more concerned with when the change is strange and radical as MOD brought private company to enforce it.

However Mr Howie and his team dealt with this challenge ‘fear’ in pull style rhetoric similar approach to that of Mr Robinson of the NHS except it was one step further as they brought in their old employees of Babcock who went through similar situations to be a  model to Faslane in order to ease the transition, where they lacked experience such as running a naval base they sought assistance from MOD who provided the expertise but Bapcock brought different way of management ‘innovative’ management just like IDEO had different processing systmen.

They also achieved efficiency without sacrificing the core operation of the firm by carefully examining the way money is spent via focusing on things that are important to the Navy. For instance they reduced the time spent on the documentation of change as officials had a period of 14 days to do review which they reduced to two days. However they asked what to be done and built legitimate consensus rather than appearing to be embossing unlike David of Energix who by passed the culture of the organization this is the important lesson.  

Consequently it became clear that the number of review points were not adding value except adding more delays to the already exacerbating bureaucratic process, because they functioned on basis of ‘I am letting it through you because you may be interested in’ this had remarkably reduced what was 56 days work into just six days a simple ‘process reengineering’.

 By including people to contribute the process of their own change what they called ‘removing the shackles’ enabled them to receive interesting ideas although it posed limitations of people avoiding anything that might fire their colleagues. 

They ultimately reduced the seven layers to three , reappointed jobs, consulted with companies that had significant changes before and as a result learned that unless the structure was changed the people ‘transformational’  would not be changed, hence prioritised in that order. Their philosophy had been start with low level changes and work your way up which earned them saving of £14M first year against target of £3M a remarkable accomplishment. 

After that they focused on transformational changes of the work force, which were more complex matter, however already slashing 250 managers onto half that were not adding value, they made sure that the various stake holders were on the same page with them. They knew who they needed to be allied with such as Base commander and other important players including their parent company and the local council.

The fundamental factors of success are included the fact they were honest and authentic in their process of transformational, they never communicated with baseless soothsaying style to the workers as they told good and bad news in their holding dialog in ‘event in tent’ style which is far from the leaders of Nasa in the challenger case which led to the employees accept the decisions because they knew why and more importantly they were part of it.

The management of  Faslane identified their purpose which was reduction of expenses and synergised  management models such as 7s model to reach their goal as it has been applied to every sect of the organization as well other models have also been applied ie Kottery 8 step , lynch and transcendent model.

2. What can we learn about effective strategic leadership from the Faslane case study?

What we can learn is having good communication system include people to make their own change, approach the issues that are easier first such as structure, rather the workforce, be honest, authentic and fair do not lean to one side only. Make sure the stake holders are on board.

3. How did their strategic leadership approach compare with Lynch’s model?

It compares with Lynch models in good communication and dealing with stakeholders.

4. How was their strategic leadership approach different or similar to other case studies? e.g. Carrefour, NHS, Madonna, Challenger, IDEO, Energix

They succeeded where Carrefour failed which is dealing with the stakeholders, surpassed where NHS pointed out possibility of achieving change, levelled with Madonna’s self leadership, did not compromise any safety where challenger came short, had innovative management engineering just like IDEO and did not make plans before including people the process where David failed in Energix.

 failed in Energix.

Energix- session 9

1. Does effective strategic leadership depend on the situation or is there ‘one right way’? Why?

Effective strategic leadership does not have one silver bullet, or one road map. The definition of wisdom tells us that wisdom is placing the right idea at the right place however that is not it, but also crucially important at the right time, in other words right idea + right place +right time = wisdom, in the case of Energix not only the strategy has to be right when and where it ought to apply is equally important for the strategy to be successful, when to apply and how to apply determines the ultimate success of strategy. This needs two important things in addition to ‘luck’ luck meaning possessing divine touch, clear and objective observation as to ‘whom’ the strategy intends to change and intuitiveness as to possessing the right intuition ‘right instinct’  which goes back to ‘luck’ as it may mean ‘trait’. Examples will be applied below on question 2. As will be explained below the culture, expectation and priorities of the employees of Energix did not conform to the vision of David.

2. Why was David successful in one role and not in another?

David had adopted an analytical approach to examine the productivity and the operation of the company as COO, had gathered all the data and facts he needed by going through the record of the company and expressed his concerns to the CEO and despite all these right approaches he did not fit into Energix based on his lack of understanding towards the culture of the company. From his appearance and both body language as well as aggressive rhetoric to enforce his policies created communication barrier between him and his followers, he may have had the right ideas but did not possess the right recopy to apply them.

All the successful leaders are good listeners  and able to read between the lines, let alone doing this, David failed to even listen to the CEO when the CEO told him to use more soothing tone and less tough military style language like that of the NFL. Another major blow to David was change does not take over night it has to run its course, he was not patiently persistent in his quest of hasty ‘Zeal’, knowing the company never hired its leaders from outside before should have been strong indication to him how conservative the culture of the company is. The priority of the company had been to finish already overdue turbines rather than going to change the long term productivity of the company. One has to deal with the short term issues first before the long term comes. Neither his observation was thorough nor has his intuition as mentioned in question one and ultimately one has to adopt in an environment first before he leads which David never did. Although those who hired him could have eased the pain for him it is my opinion that person with the celebre of COO with experience should have known adopting in the corporate culture of the firm first is very wise.  

3. What have you seen other people do in other case studies that might have worked well here? e.g. NHS, IDEO, Challenger, Madonna, Carrefour

David’s short comings had a lot do with his appearance, how he is perceived by his followers, he appeared he had nothing in common with the very people he intended to lead and change which means he is perceived to be outsider rather than insider. For example Mr Robinson and the IDEO leaders both have appeared to their followers as insiders although Mr Robinson was ironically just as outsider as David had been to Energix. Also Madonna knows her audience precisely which means in addition to her intuition her observation of the psychic of her followers seems to be spot on. David could have said ‘people are just people’ just like Mr Robinson and they need to be listened and respected, people want to be appreciated even if they need to be rehabilitated or changed. Therefore he should have employed persuasion tactics such as Mr Robinson’s.    

IDEO- Session 8

1. How does the organisation foster creativity? Be specific

The organization fosters creativity by unleashing the workers minds, because through discussion and free thinking are achieved innovative ideas or invention for that matter. IDEO as a company is in the design industry and therefore be comprehensive at it by integrating form & function which equals to be good design. The most important thing IDEO established to achieve creativity is the makeup of the team with amazing and diversified backgrounds as they are five members physiologist, MBA graduate, Biologist, Engineer, and exceptional team player who can glue the team together. The more wild and different one’s idea may be the more maverick they are in fact the better that individual is valued and this is the one of the ways the company fosters creativity as a result the wild the idea is the better the idea evolves. Culture of creativity is another important factor present in IDEO which means fostering habit of creativity from people, the DC3 wing, umbrellas, and the   bicycle on robes constantly and vividly remind people in IDEO not only this place is place of creativity but it comes from you, from your minds and thinking. Challenge is something that brings best from people and nothing challenges more than one’s own failure and in IDEA failure is not seen entirely as a failure “fail fast” fosters creativity in other words failing early on is okay it has high probability to evolve something has utility and design. Finally people are encouraged to be playful and have a fun in what they are doing  as well as 'deep dive' because of these flexibilities IDEO was able to be creative company.     

2. What is deliberate, systematic, logical or rational about their approach to innovation?

At the beginning the boss informs these highly qualified and diversified team of employees the task and equally important the deadline when this is expected to be ready. Following this, people brainstorm in discussion and all the wild ideas are brought forth the idea of “fail fast” is to my understanding, each idea proposed will be considered and the best elements of the idea will be selected, by doing this, the best elements of everyone’s idea is probably the best and most creative phenomenon which will be consequent to the approach. In the event of disagreement lock ups the team resorts electing the best idea but this is not frequent as the members of the team are objective and team players.   

3. What is most effective about the leadership style of the organisation?

The most effective about the leadership style is the degrees of flexibility exercised together with the degree of horizontal management in existence which allow and give people autonomy in their thinking thus enhance their capability of forwarding not only innovative products but one that is in line with health and safety.   

4. How does this organisation differ from the Challenger shuttle case?

The main difference is the above mentioned. IDEO is run by horizontal system of management both what the technical employees say and health and safety are never compromised in other words no one takes off the engineering hat in IDEO. Also there is no bureaucracy creating communication barrier as it happened in Challenger case, plus employees don’t need to ask permission in IDEO “ ask forgiveness later  not permission”  and failing fast is fine.  As long as the end result is in line with the mission of the company which is bring  creative product that is safe in a given deadline.

Session One - Strategic Leadership

Write down one thing you’ve learnt about Strategic Leadership

I learnt that as the world is becoming more globalised and complex in a very dynamic environment, organisations and leaders need to have comprehensive approach to plan for their companies and ethics is becoming very important in the wake of human caused financial crisis.

I also learnt  there are various definitions to Strategic Leadership catering for today's dynamic environment and  there is a need to research the literature further.

Session Five Challanger

1. What can we learn about effective or ineffective strategic leadership from the Challenger case?

In the case of Nasa and the shocking explosion of challenger we learn that the leadership of Nasa followed the common mistake of over prioritising productivity and in the process compromising quality or ethics which when one looks at it deeper will realise there no point or profit for organizations to press ahead with quantity only. It always results greater damage to the reputation of the company and the revenues. For example Nasa’s operations were suspended for years as the result of the challenger explosion not to mention the irreversible of loss of life and reputation. Therefore we learn good strategy must  be synonymous with balance which plays crucial role  in the long term success and survival of any organizations ‘balance of productivity and quality’ in the case of Nasa it is safety. Another example of this rather routine mistake can be seen in the clothing giant Gap as they outsourced their production to Chinese and Indian manufacturers whose human rights record is low and practice child labour and eventually stained their reputation to ever literate consumer in this information age.

2. What are the underlying reasons why the mission went ahead? Who or what was to blame?

Indeed there are factors that pressure the administration of organization like Nasa such as datelines, gov’t expectations, public expectations and even world expectations that Nasa is the world leader in astronomy, hover the leadership knew very well what they compromised in their secluded meeting when they said “ put managerial hat on and take off engineering hat”  meaning lets prioritise and expedite production and assume or hope the best whether the rocket is actually fit for mission despite clear and dangerous warnings from the engineers who has first knowledge of the subject matter, which is complacency as well as lack of transparency from the Nasa’s management.

3. What else should the engineers have done to stop the mission?

Where there is evidence or high probability of loss of life such as the case of challenger with major safety issues the employees or the engineers in this case should stop the catastrophe from occurring by all means available including leaking the fault to safety agencies like the FDA in the US, the press and/or even the police.

 It is matter of training /informing employees in their inductions preserving the right to life outweighs any management decision which was clearly gambled with when the engineering hat was disposed, consequently the safety of the shuttle crew was disposed and the engineers knew the magnitude and the repercussion of the information withheld from the knowledge of the public and those whose lives were directly involved and did not do enough to stop it.

4. How are the sort of issues that Carrefour or the NHS or Madonna face similar or different to the Challenger case? (Is it possible to compare them at all?)

There are similarities in the NHS and Carrefour, in the case of NHS there were no legitimate communication between management consultants and nurses as a result management does not have any power to lead the company to satisfy the need of patents which again is issues of lack of transparency, which again involves health and life of people.

In the case of Carrefour the company’s goals and strategies were trapped in short term circle as it was giving in to the pressures of creditors just as Nasa’s  strategies were driven by the issues of satisfying the publicity and expectations resulted by the external environment which driven both strategies of these companies to be overwhelmed in short term goals hence compromise the ultimate vision.       

Session Four - Madonna

Madonna has always managed to be modern ,contemporary, relevant and re-invented herself. This has allowed her to have sustainable success.

Madonna has always used her image effectively a sex iconic to attract wide customer base. However, Madonna at the age of fifty must realise to maintain competitive advantage she needs to find new talents and recruit them, in other words, she should be a producer and develop her own prodigy.

Icons like Madonna applied the true sense of flexibility, staying relevant to her industry by adopting culture of constant renewed challenges to status quo and hence remaining relevant in the minds of people which is the essence of why she is the highest ever paid female singer. What is unique about Madonna is her recopy for success is un-replicable by her rivals.