Building an Integrated Architecture for Leadership Assessment and Development at PepsiCo

Introduction

Over the last several years, PepsiCo, one of the world’s leading food and beverage companies with over $63 billion in revenue, has been involved in an organizational change effort to enhance the level of objectivity, consistency, rigor, and impact of its talent management processes at a total systems level (Trudell & Church, 2016). This effort has resulted in a number of significant changes and a fundamental realignment of the HR function to enable growth and development across the employee life-cycle. One key component of this shift has been the introduction of a fully integrated, evidence-based assessment and development process designed to identify and build the leadership pipeline of the future, while informing the organization’s talent decision making and succession planning efforts of today. This process, called the Leadership Assessment and Development (LeAD) program, is based on the latest thinking on leadership potential in the field of Industrial-Organizational (I-O) Psychology (e.g., Church & Silzer, 2014; Silzer & Church, 2009), and leverages a best in class multitrait multimethod (MTMM) design.

More than just a new set of assessment tools and development practices, the LeAD program represented a major cultural shift as well. In short, it represented the introduction of a new comprehensive and predictive data-driven process for evaluating talent. While the organization has a long history of using feedback methods for its core individual and organization development (OD) processes, with the rollout of LeAD, we focused on using new forms of data to: (a) ‘level the playing field’ for talent when it comes to identifying future leadership potential (not just reinforcing leadership competencies as in the past), (b) drive the digitization and integration of assessment data into our core HR talent management systems to be used as an input into talent discussions on demand, and (c) build new capabilities with managers and HR professionals on how to interpret and maximize the value of the feedback for both individual development and organizational decision-making. Although the journey has taken more than 5 years since the program was launched, the timing was necessary to ensure we had the key components in place required for success. These included (1) the measurement rigor and validity needed for using data-based tools in talent decision-making (Scott & Reynolds, 2010), and (2) the critical mass and positive impact from the first waves of participants which created significant pull for more. Over time we have seen a major change in the way the organization has embraced the new approach to assessment and development as a result of the change effort.

The purpose of this reflective case history is to provide an overview of the LeAD program and the results obtained at the individual and organizational levels. Following a brief overview of the background and design of the program, metrics from several different sources are presented demonstrating its impact, followed by a summary of key lessons learned during the change process. The discussion concludes with a summary of where the program is headed in the future.