About Harvard Business Review (HBR)
The Harvard University Management Magazine has been published for a century and gathers articles based on research and data. Its authors include the best international management and business experts in a variety of fields, including leadership, negotiation, strategy, marketing, finance and operations. Harvard Business Review articles are translated and published in Globes three times a week: on Mondays, Wednesdays and Thursdays (G Magazine).
Performance with a purpose as a vaccine against the future
Indra Noi Former CEO of PepsiCo, considered one of the most influential women in the world; born in 1955 in Chennai, India ● Married and mother of two ● Education: Master’s degree in management from Uni’ Yale
When I was appointed CEO in 2006, I was determined to manage PepsiCo so that the company’s performance improved in the short term and that it prospered in the long term. The company was already in good shape, but I dreamed of turning it into a corporation that would define the 21st century, be proud of its roots – yet global, flexible and responsible in these changing times.
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For six months or more, I quietly read everything I could about the major social trends affecting business, the consumer sector, and the food and beverage industries in particular. I examined purchase data, feedback from employees and the external noise in the industry and our fields. I also delved into the duties and responsibilities of public corporations. What grew out of all this is a vision for PepsiCo, which guided us in the following years. I called it “performance with purpose”.
Indra Noi, former CEO of PepsiCo / Photo: Reuters, Ryan Kobane/BFA.co
I have set three clear goals for myself: to feed the people and communities in which we live, to renew our environment, and to nurture our people. We wanted to change the way PepsiCo makes its fortune through the same goals – adding more nutritious products to our portfolio, reducing water use and plastic waste, and retaining the most talented people.
My motivation was to make PepsiCo “future proof” for the benefit of everyone – shareholders, employees, communities – by anticipating how the world will change in the coming decades. And it worked. In my 12 years as CEO, total shareholder returns jumped 149%, dividends increased 10% per year, and net income increased 80%.
We also cut the salt, fat and sugar in sodas and chips, added healthier brands and products, and reduced the amount of water needed to produce a Pepsi bottle by 40%. We have built a magnificent R&D department to continue to be innovative. Our design studios have won many awards. Our talent academy has been so strong that nine senior managers have gone on to CEO positions elsewhere, a “bittersweet” achievement that I am proud of.
I believe that leaders should commit to the hard work and think backwards from the future, even when things are going well. And now we have a framework that supports that. These criteria force us to hold a discussion about difficult truths for those who have ambitions to remain relevant.
“Performance with purpose” is not an easy approach to implement and I went through difficult moments in its development, including a moment when my finance manager scolded me: “Who do you think you are? Mother Teresa?”. But the skepticism faded when we committed ourselves to a collective task that included both the bottom line and far beyond. That was my hope from the beginning.
Backward planning: The tactic that helped develop a vaccine
Stephen Bensell, CEO of Moderna pharmaceutical company since 2011, about a year after its founding ● Born in Marseille, France, in 1972 to a doctor mother and an engineer father ● Married and father of two ● Education: Harvard University, USA
Most people think about the future of a commercial company from the present forward. As humans we have a natural tendency to think horizontally. However, this attitude limits our creativity and limits our ability to achieve things that were previously unimaginable.
Think of a better alternative, by thinking five to 10 years ahead, and then “playing the movie backwards”, free yourself from the limitations of what was possible at the time. You can imagine a vision for the tenth year and then figure out what happens in the ninth year, the eighth year and so on so that the vision becomes a reality.
Stefan Bansel, CEO of Moderna / Photo: Reuters, ARND WIEGMANN
I used this approach when I founded Moderna in 2011. As a young startup, we had no history to lean on, so it was only natural to think big about where the company wanted to be in the next decade and plan backwards from there. In the earlier years, this way of thinking allowed us to successfully build technology for preclinical research. We started by thinking about how much mRNA we would need to produce (in the thousands) and how long it would take us so that it would allow scientists to quickly experiment and learn. Then we worked backwards to understand what needed to happen without relying on past assumptions or models, and designed the platforms that fulfilled those goals. Recently, this tactic helped us develop the corona vaccine in less than a year.
Backward planning can be a powerful management tool in any organization. It encourages thinking without limitations that leads to big ideas and two tracks that move companies, industry and human society forward. This approach is of course not without problems. It can be delayed for any number of reasons, including failure to unite shareholders around a clear vision, or creating a plan that lacks details. You can achieve extraordinary achievements only if you coordinate people and give them time to be involved and create a stable plan of action.
A future-focused way of thinking will continue to be an important engine of Moderna’s growth in the coming decades. We want to be the most influential life sciences company in the world, and playing the movie backwards will help us achieve that goal.
The great advantage of glocalization
Nicholas Hieronymus CEO of L’Oreal since 2021 ● Born in 1964 in Paris, France, father is a television producer and mother is an aeronautical engineer ● Education: ESSEC business school
One of the biggest challenges for any multinational company is how to stay relevant. In an article published in 1983 in HBR, marketing professor Theodore Levitt of Harvard Business School argued that standardized products should be produced for the whole world. His contemporary, sociologist Roland Robertson, wrote in HBR and elsewhere that the solution instead was “glocalization” – that is, adaptation of international products, services and business procedures to local laws, customs and preferences.
At L’Oréal, we tackled this dilemma with an approach we call universalization: a strategy led from the center, given life through implementation at a local level. Concretely, this means that our teams in certain markets have a large degree of autonomy, but operate under a clear and coordinated global framework.
Nicolas Hieronymus, CEO of L’Oreal / Photo: Reuters, Lafargue Raphael/ABACA
To support this, we have a worldwide network of manufacturing sites, research and innovation centers, and marketing design centers, to develop, manufacture and distribute products in different geographies around the world.
Our teams allow us to quickly identify new trends and issues in local markets, such as consumer concerns about dark spots in Southeast Asia and Latin America or the increase in the number of hairdressers in North America. They also help us identify promising opportunities to support local initiatives.
The trust and close cooperation between our global and local teams also helps to navigate crisis situations. For example, during the coronavirus pandemic, we relied on our teams to identify disruptions to global supply chains. As the world becomes increasingly volatile, uncertain, not to mention fragile, I am convinced that his approach will give us the adaptability we need to continue to succeed.
Whether you call it glocalization or universalization, it can benefit any organization that aims to serve multiple markets.
Above all, a leader must listen
Rosalind (Rose) BrewerCEO of Walgreens Boots Alliance ● Born in 1962 in Detroit ● Married and mother of two ● Education: Holds a law degree from Stanford University
Listening is a fundamental rule for proper leadership and good management. Over the years, I’ve learned that active listening helps identify problems that need to be solved, opportunities for innovation, process or policy changes needed, new product ideas, ways to improve customer service, and more.
As the CEO of Walgreens Boots Alliance, which deals with the management and operation of a chain of pharmacies and convenience stores in North America, and in previous leadership positions in retail companies, I was always visiting branches and looking for ways to improve their conduct. I learn from our customers and our employees. When I meet with the front line team, the wheels really turn starting to turn around.
Rosalind (Rose) Brewer, CEO of Walgreens Boots Alliance / photo: company website
When I introduce myself on store tours, I always make it clear that I’m there to listen – not to play “football from the bench” or a game of “got you guys”. I want to hear the employees in the branches in the discussion and listen to what they have to say. I want everyone to know that they have my full attention. We talk about problems openly and then create action plans to fix them quickly.
Even after I review data to understand a particular issue, and work with my team to find a recommended solution, I meet with branch managers to put the proposals in front of them. I ask: “Did we do it right? I’m listening.”
I also encourage the managers under me to visit the branches. Sometimes they come back and share what happened to them and point out an outdated policy or process, and say: “I can’t believe we acted like that. Did we really think it was a good idea?”.
After visiting the branch, I often send a message to the staff members I met. I thank them for sharing their perspective and explain exactly how and when we intend to make changes as a result. Then, when they see the changes coming, they know their voice makes a difference and solves problems. As management experts have written in HBR over the past decade – a leader needs to listen. Active listening can be one of the most powerful tools.