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First Person: Steve Reinemund

Steve Reinemund, Dean of Business and Professor of Leadership and Strategy at Wake Forest University, talked with Community Wealth Vanguard about staying focused on mission and being adaptable. He also shared lessons learned from more than three decades in business. Reinemund was previously the Chairman and CEO of PepsiCo, Inc., where one of his key areas of focus was diversity.

What approaches keep organizations focused on their missions?

It starts with having the right, well-articulated vision and mission. If the vision and mission are not well thought out and appropriately articulated, and repeated often, then it’s very hard to keep people aligned against those objectives. That’s probably one of the biggest single challenges a leader has, to constantly be ensuring that the vision is well thought out and appropriate, then well articulated, then repeated over and over and over. Oftentimes leaders get tired of hearing themselves talk about it, but the people who you’re leading don’t get tired of hearing about it. It’s important that they consistently hear the same message.

Is there sometimes pushback if people within the organization feel like the mission doesn’t match the day-to-day?

Well, you would hope there would be pushback. Oftentimes the most dangerous thing is when you don’t get pushback, and then people just wander. But certainly, if there is pushback toward an articulated vision, then the leader has to understand, what’s the nature of that? Is it well founded or is it a resistance to change? Or is it just a lack of understanding of what the vision is? That’s why it’s important to have an organization that will, in fact, speak up and articulate when things don’t make sense, or when the organization isn’t buying it.

Can you talk about communication and effective strategies?

Communication, regardless of the size of the organization, needs to be the type of communication that is inclusive, not directed. Communication that causes the person receiving it to feel that they had some input, some buy-in to it, rather than just a set of directives on paper, which seldom ever work.

One thing is listening to feedback when an organization is making change, or frankly, when it’s not making change. Having a good ear to the ground and making sure that the leaders have some forum that they’re comfortable with that allows the organization to communicate. Most individuals in the organization will respond if they consistently are led and they understand that there is a process from which communications can be two-way. I’ve seen a lot of different leaders use different methods of effectively communicating, but the key is consistent use of active communications that are two-way and that allow the members of the organization to feel that they’re heard and that they have the opportunity to be listened to.

That gets into leading with integrity; one element of that for you has been your work on diversity and inclusion. Why is diversity vital?

In the marketplace today, if your organization doesn’t reflect the community in which you serve, from the boardroom to the front line, then it’s hard to imagine that the organization can be successful. Particularly an organization like in my case, a consumer products company, where we’re trying to invent and market and sell products to the marketplace, which is diverse . . . Having people in the organization from the top to the bottom and the bottom to the top who recognize, appreciate, understand, and can communicate with the entire marketplace is critical. Most companies get that—the problem comes in the implementation of it. Creating a diverse workplace is hard work, but it’s absolutely critical. Frankly, I don’t know any organization that is completely perfect in diversity. Diversity has key components: one is just sheer representation, which is a little around numbers. The second is inclusion, which is a lot about culture, which says not only do you have a diverse culture, but you value it. You value every difference that an individual brings to the workplace. That makes the workplace more complex and it makes it more difficult to manage, but it’s much richer when you can, in fact, accomplish it.

Can you discuss ways that you helped Pepsi adapt to become more diversity friendly?

Achieving diversity starts with the culture recognizing why it’s important. Valuing and hearing from and acting on the needs and desires and backgrounds of the whole culture is absolutely essential. A large part of the diversity and inclusion effort is around setting appropriate goals, holding people accountable to those goals, and then, ensuring that they receive the benefits of it. . . . [Often] the people that you’ve brought in have made contributions that the organization may not have come to had they not been there, because they . . . didn’t have that experience and background. It’s important to celebrate wins along the road to diversity, to address issues along the road, and to make people understand that the journey is both the right thing to do for society and it’s also good for business, and to recognize that those two things work together. One really can’t be separated from the other. If you contrast diversity and inclusion to other strategic objectives, there’s a fundamental difference. And that is some strategies are very important, they can be very profitable, but at some point—because of their difficulty—an organization may decide to change that strategy. Whereas diversity, when you start down that road, regardless of the difficulty and the defeats and the frustrations, you can’t give up. Organizations that start down the journey, give it lip service, and give up oftentimes find themselves in worse shape than if they’d never made the commitment to begin with. It’s one of those commitments that is non-negotiable, like integrity, that you just have to constantly be working on. You have to recognize that it’s a journey that, in your term, may not end, but it’s worthy of the effort.

More so now than ever, people are looking for organizations that are going to be uncompromising in their commitment, even if it means short-term difficulties and short-term setbacks. People are willing to say the short term is not as important as the long term. The ability to stay focused on the long-term prize, the commitment to getting there with integrity, will create a workforce that’s much more dedicated, committed, and alive than one that changes the objectives on a convenient, relative-truth basis.

What are some of the biggest challenges you’ve faced, and how have you approached them?

The single biggest challenge I had as CEO of Pepsi—I had different jobs throughout the course of my career—but the biggest challenge of my CEO career was this whole area of diversity and inclusion. The reason was that you are dealing with people one-on-one, you’re dealing with complex cultural issues, and everything doesn’t go right. There are defeats along the road. You have an individual that you are committed to and that individual makes the choice to leave the organization. It’s a personal and organizational setback, but you have to say, “Okay, we’ll go on.” Or there’s some mistake made that crosses the line of respect to an individual, and it’s either intentional or unintentional, but if it happens, it’s a setback. I think that the road to leading an organization that is culturally attuned to this changing marketplace of culture is the hardest single thing I worked on. It came with some mighty memorable highs and some discouraging lows, but it’s the right thing to do. I believe we were a stronger company because we got better and better at it.

Can you talk about your role at Wake Forest and what you’re teaching?

Sure. Personally, my objective at this part of my life is to use what I’ve learned over 30 years of business and try to help young people find out what their calling in life is or their vocation is in a way that allows them to unleash all their passions toward their chosen field. It sounds like an easy task, but it isn’t. Oftentimes young people, particularly young people who are very talented and have lots of options, have a difficult time figuring out where do they actually fit and what is it that they are destined to do, versus what their peers or their parents or the society says they ought to do. So the overall driving vision for me in this phase of my life is to help young people figure that out. We’d like to see every graduate of Wake Forest Business Schools be able to leave Wake Forest with a clear understanding of their place in society and a vocation and a job that matches their best fit.

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