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Principles and Practices of Leadership and Management, Module Code: 6HR503

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Introduction

The oldest and the most relevant management and marketing mantra, that has been and will always remain is ‘Consumer is the King’. When Director Jorge Rubio of PepsiCo dynamically transformed the marketing and research unit at PepsiCo in to a more innovative and creative Consumers Strategic Insight, the aforesaid marketing mantra was the key to this transformation. The objective of the said revolution is to get a detailed proactive insight into what the consumers really want and convert them into foresights to prepare the organization to bring innovative products to satisfy this want. The key element here is “sensing” which consumer needs are under served both from a corporate and current perspective and responding accordingly. This proactive and innovative approach of leadership is a key to the out of box thinking and creative outcome of the team. Out of the various theories of Leadership which is the most apt for a particular organization is a matter of debate as the leadership has to be dynamic and responding to changes proactively rather than following set path of any particular theory. Thus, what PepsiCo has done in this case is a classic example of contingency and contemporary theories of Leadership sailing in the same boat together powered by the Traits of the leader and the intricacies of the situation.

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Critical evaluation of the Leadership theory

Collins (2010) has mentioned in his analysis of the Leadership style at Pepsi that its hardcore rival Coca Cola has to spend enormous financial resources in order to stay ahead in competition, whereas Pepsi’s effective leadership style often gains competitive edge in many aspects with optimum use of its financial resources. The Consumer Strategic Insight set up is a classic example of the innovative leadership style. Leaders play an important role in the success of any organization and their leadership flair takes the organization to greater heights. It not only has tangible effects on in terms of financial gains and competitive edge but also intangible optimistic effects within the organization such as energized environment and motivated employees.

In this case, the Consumer Strategic insight team members have been given a free hand for creative thinking, innovative approach to consumer demand analysis, data collection, interpretation and usage and to keep on trying new ideas and not fear failure. When looking up to Google’s corporate creativity center and having the idea materialize at Pepsi, the Director Gorge Rubio has projected the contemporary and transformational theory of leadership where the leader stimulates and inspires the team members to achieve extraordinary outcomes by transforming their vision and personality to change expectations, discernments and motivations for working towards common goal of the organization. This has resulted in provided PepsiCo the upper hand in competition and catering to its customers in a manner where the others fail. PepsiCo has many insights teams — at least 22 across North American beverages, corporate, the Frito-Lay group and so on. These teams comprise of about 16 members each and are powered with urbane market research function that uses focus groups, sales data and research to analyze who its customers are and what they want. This data is then sent to other Business Units and groups within the company — marketing or product, for example — so they can use it to make better decisions.

Leadership Skills and Competencies required

It is the work of the Leader to ensure that the followers are aptly motivated, stimulated and enthusiastic in achieving the common goal of the organization. As times and situations change, the leaders adapt to different leadership theories and styles to overcome the challenges and tap the opportunities making the team the key element of the organizations success alongwith the external factors. In this case, there are no formal targets or set guidelines which would provide a roadmap for the employees to follow and the leader to evaluate. Here, the style or theory of leadership which the management is following is subject to loose controls rather than monitored performance. Therefore, it is important to lead the team members in a way that would foster greater creativity as well as help achieve the goal of increased efficiency and innovation in Consumer Strategic insights.

The crucial competencies of leadership required in this type of open environment as in this case are –

  • Inspirational Motivation
  • Consideration for individuals : Emotional Intelligence
  • Intellectual Stimulation

Taking together these attributes are all about creating a productive and trusting environment which would self-motivate the employees to work towards the organizational success. The following paragraphs would discuss these skills and competencies in greater details.

Inspirational Motivation

Director Gorge Rubio, in this case of PepsiCo, aimed at creating an environment promoting creative ideas, energizing and creating a sense of purpose for employees and team members of the Customer Strategic insight team and motivating the employees to think innovative with excitement and momentum for change. These are the traits of inspirational motivation ensuring that all the members work collaboratively towards a shared purpose in their own unique way. It includes providing employees with the required resources needed to grow and empower them as well as place accountability on them of their own success. This is an important competency a Leader should possess in order to function in an open environment like in this case. The following levels of benefits are prominent for inspirational motivation

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  • It helps develop a culture of respect, equality and conviction and people feel valued for their unique contribution.
  • It helps the recognition of individual’s accomplishments, knowledge and competences.
  • It fosters an environment of openness to others ideas and learn, give and take feedback.
  • People feel free to suggest change paths and solutions when current solutions or plans no longer apply.
  • This facilitation of change empowers employees to grow.
  • Assigning decision making authority to the employees who are responsible for the outcomes gives a greater sense of responsibility and passion to achieve the set objective.
  • Supporting learning efforts that benefit self and others, thus creating a culture of continuous learning throughout the organization is an integral part of inspirational motivation.
  • The Inspirational leader is deeply zealous about the both the mission and vision of the organization. This zeal and passion drives the followers and they feel important to the mission beyond the tasks they perform each day.
  • Leader has to be listening to its followers as mere sharing the passion won’t work. Ideas and thoughts of the team members should have a proper channel of following to the leaders and of materializing in fulfilling the organizations mission.

Inspirational leaders are thus, perceived as effective role models who establish emotional connect with the employees, setting clear vision with effective communication, foster group cohesion and enthusiasm and welcoming new and creative ideas.

Consideration for Individuals: Emotional Intelligence

Ideas and creativity foster in an environment of enthusiasm, passion and openness and this was the reason why the entire concept of the Customer Strategic Insight team and their office set ups had been unique and unconventional. Each team member of the CSI alongwith the BU representatives were involved in the market research and innovation by Director Gorge Rubio. In such team setup’s where the hierarchy and management controls are loose and not adhering to the general management and employee review systems, it is further more critical for the leader to ensure that the team members are aptly considered as equally important to the success of the whole organization and its mission.

Here, the Leaders emotional intelligence plays a pivotal role in establishing a creative and winning culture within the team and leading them in cohesion towards the desired outcome. Emotional Intelligence is the ability or skill of the Leader to effectively understand and manage his own emotions as well as of the people around him. This makes them listen to their people, trust them, be approachable and make careful informed decisions. The following five are the main elements of emotional intelligence –

  • Self-Awareness – Being at a leadership position means one has to be fully aware of your own strengths as well as the weaknesses. This self-awareness is the first step of emotional intelligence. It helps the leader to behave with humility and make him an idol for others to follow. It is important for the leaders to slow down when experiencing strong emptions liked anger or anxiety. No matter what the situation is, one can always chose how to react and this trait is prominent in the Leaders.
  • Self- Regulation- Staying in control and maintaining a serene state of mind is a virtue of leaders which the followers look upon. This is Self-regulation which makes effective leaders who do not make rushed decisions, stereotype people, verbally attack others or compromise their values.
  • Motivation - Motivated Leaders are always optimistic irrespective of the situations or problems they face. This trait makes them successful and also passes on the same motivation to their followers. Motivated teams work wonders and this is critical for all businesses.
  • Empathy – Considerations for individuals, listening to them without preconceptions and being fair in responding to their feelings are the competencies each leader should possess in order to be successful. Put one’s self in other peoples place and understanding their body language and feelings makes the Leader extraordinary.
  • Social Skills – Effectively communicating in Social groups, Learning effective conflict resolution and prompt and appropriate appreciation of the team members form an integral part of the Social skills of a successful Leader.

Intellectual Stimulation

The key element in the formation of the Customer Strategic insights team was the intellectual stimulation of the team to come up with innovative and creative ideas of reaching the customers and getting to know their needs and wants in a way to directly help the intricacies of the future products. Intellectual stimulation in the true sense involves the employees in developing groundbreaking solutions to common problems and achieving the outcomes in new ways.

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The idea of Director Gorge Rubio of creating a the CSI and maintaining a culture of openness and creativity is a classic way of intellectually stimulating the front end employees to come up with creative and more productive ideas of collecting, organizing and putting to use the valuable consumer survey and research data and presenting them in ways making enormous impact and helping the Business largely. According to Northouse (2001) these type of leaders stimulate followers to be more creative and innovative challenging their own values and beliefs as well as of the leaders and the organization. It helps the team members to try new approaches and develop inventive ways of dealing with the market and organizational issues. The members are not dependent upon the leader for each and every decision making and engage in careful problem solving on their own.

Conclusion

According to Malloch (2004) honest and effective leadership, has been the key factor of PepsiCo’s success and competitive edge in the Market. It aptly concludes that an Organization which has leaders, who can bring out the best ideas from its people and exemplify the organizational mission through its innovative leadership competencies, is surely to take the organization to greater heights. The level of achievement within the organization rises increasing the depth and breadth of the impact when the followers and team members are appropriately motivated and inspired to work in cohesion. Organizations with strong transformational Leaders are more rooted in stimulating the performances of their employees. This leadersip trait has been growing in its popularity and recognition because of its seemingly pervasive application. This case of CSI of PepsiCo also makes it visibly clear that the Leaders leading with empathy and openness are more likely to foster a culture of innovation and creativity among the members.

References

  • Koss, Johann Olav. "Interview with Johann Koss at Claremont McKenna College."
  • Interview by Kyle Weiss. Koss, Johann Olav. "Kravis Prize and Transformational Leadership." Personal interview. 12 Mar. 2014.
  • Kristof, Nicholas D., and Naka Nathaniel. "Reader Responses to 'The Age of Ambition'" Editorial. The New York Times. 28 Jan. 2008.
  • Web. 16 Oct. 2013. Meehan, William, and Kim Jonker. "Rural Development Institute: Should It Tackle the Problem of the Landless Poor in India?" Stanford Graduate School of Business (2007): n. pag.
  • Stanford University. Web. Neirbauer, Nickolas. "Kravis Prize and Transformational Leadership." Personal interview. 11 Mar. 2014.
  • Northouse, Peter Guy. Leadership: Theory and Practice. Thousand Oaks, CA: Sage, 2004. 6th Edition, 190.
  • "Johann Olav Koss | Ashoka - Innovators for the Public." Johann Olav Koss | Ashoka - Innovators for the Public. N.p., n.d. Web. 23 Apr. 2014. "
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