CIO interview: Nigel Richardson, European CIO, PepsiCo

Establishing priorities

Richardson says the main reason he’s stayed with PepsiCo for almost two decades is because he’s had the opportunity to keep learning new things. He says one of the benefits of working for a big company like PepsiCo is its dynamic business environment.

“We have great people,” he says. “There’s an excellent culture across the business and the products we produce are fun. We make snacks and drinks that make people smile. Of course, we’re a business – we need to grow and we need to be successful. But we try to do it in a way that has a purpose.”

Here, Richardson refers to Pep+, which is the company’s overarching strategy that aims to bring sustainability to every point of PepsiCo, including its technology department. This focus informs his day-to-day roles and responsibilities, too: “I always think about how I can help the business to grow sustainably.”

Operationally, Richardson reports to PepsiCo’s European chief executive, Silviu Popovici. Functionally, he reports to Athina Kanioura, the company’s global chief strategy and transformation officer, who spoke with Computer Weekly last year about her digital strategy for the business.

Richardson has three main priorities in his role. First, using digital and data to grow the business sustainably in a range of key areas, such as customer engagement, supply chain relationships and back-office operations. Second, dealing with core IT concerns, including infrastructure, enterprise resource planning (ERP) technologies, and the modernisation and simplification of systems: “That’s about making sure the IT backbone that supports the selling of our products is seamless.”

Richardson’s third priority is developing capability. He manages a European IT team that draws on disparate human resources from around the world, including global delivery teams. He bolsters this internal talent through external partnerships, such as with vendors and startups.

Leading people

When it comes to leadership style, Richardson refers to a conceptualisation from US writer Daniel H. Pink, which suggests there are three main ways to engage with the people who work for you: purpose, mastery, and autonomy.

“I always think about how I can make sure my team feels a sense of purpose so that everything they’re doing is part of something much bigger,” he says. “For us, it’s about linking each individual’s role to the purpose of the business and, with Pep+, I think our purpose is strong, whether it’s positive agriculture, positive choices, or creating a positive value chain.”

“If you put autonomy together with purpose and mastery, and you get those three things right, you create a very empowered and healthy organisation”

Nigel Richardson, PepsiCo

Richardson says mastery is about helping his staff to be great at whatever they do: “I want people to feel they have the ambition.” Autonomy, meanwhile, is about supporting the concept of freedom within a delivery framework. He says that, while autonomy can be a tricky goal to achieve in a big company, it’s also an essential success factor.

“Within my framework, people have a lot of autonomy to do what they need to do to achieve the right things,” he says. “And if you put autonomy together with purpose and mastery, and you get those three things right, you create a very empowered and healthy organisation.”

Richardson says the results of this three-pronged leadership style can be seen inside and outside the IT department. One of the key projects he’s led is the development of a frontline system that helps the company’s sales staff boost their operational efficiency. The system also supports big trade customers who want to complete orders online.

“That technology, which we call PepsiConnect, has provided a big win for us,” he says. “The digital platform is all about connecting with our customers. We developed it in one market and we’ve now rolled it out across many countries in Europe.”

Another of his achievements has been fostering a culture internally to raise the business’s awareness of the power of digital and data. A recent internal survey highlighted the benefits of his technology-led approach: “We’ve seen a massive uptick in people saying that technology is helping them do their jobs in a better and simpler way.”

Producing results

Richardson is using a mix of in-house and external talent to deliver innovative technology. Sometimes, those initiatives take surprising directions.

Take the example of Doritos Silent, which uses crunch-cancellation technology that has been developed in partnership with interactive design specialist Smooth Technology. Gamers download the software to their PC. Once the technology is turned on, the application detects and silences crunching sounds, while keeping the gamer’s voice intact.

“Our research shows that one of the most annoying things as a gamer is other people eating snacks,” he says. Almost half (46%) of UK gamers dislike the sound of other people eating. In Portugal and Spain, 68% and 64% of gamers respectively rank crisps first when asked which food items create the worst noise while they’re gaming.

Another innovation from the European IT team is focused on mobility. Richardson’s team has helped to develop a customer engagement app in Turkey that has been downloaded 10 million times. The app allows customers to get up-to-date product news and offers that are connected to their local stores. That product was developed locally and is now being rolled out globally.

“PepsiConnect has provided a big win for us. The digital platform is all about connecting with our customers. We developed it in one market and we’ve now rolled it out across many countries in Europe”

Richardson is also eager to point out that innovation at PepsiCo isn’t just centred on customer-facing products. He refers to research that suggests global food systems account for about 30% of the world’s greenhouse gas emissions. The aim for his company and the farmers it works with is to find new ways to produce food more sustainably.

“Technology is certainly part of the answer,” he says. “We’ve been working with our farmers for a number of years by using machine learning to help them. One of the key areas we’re working on is fertilisers. We take millions of data points from different farms about things like crop yields, soil health and weather,” he says.

“It’s a classic machine learning-type problem. And we use all that data to give our farmers insights that enable them to reduce the amount of water they use, because people typically overwater, to reduce the number of pesticides they use, and to cut the amount of fertiliser, which is crucial because it helps reduce ammonia.”

Richardson says the initiative also provides benefits to PepsiCo, especially around the company’s ambition of reaching net-zero carbon emissions. He says it’s vital to work towards reducing Scope 3 emissions, which cover the company’s external operations.

“You can’t get to net zero without helping the whole supply chain decarbonise, so the work with farmers is crucial,” he says.

Across all areas of innovation, Richardson says his team reaches out regularly to startup communities to help develop ideas. “It often makes sense to work with other people who are already solving challenges,” he says. The European IT organisation works closely with David Schwartz, vice-president at PepsiCo Labs, who explained to Computer Weekly previously how the company has developed a four-step approach to exploiting innovation.

Driving change

Richardson says PepsiCo’s European business remains on a long-term transformation journey. While the almost constant emergence of new technologies means delivering digital transformation remains a work in progress, he wants to help the global IT organisation move towards its desired destination during the next two years.

“We want to change the underlying platforms, so they are completely scalable,” he says. “I want to help us complete our infrastructure transformation, which will allow us to build local products on top of our IT platforms in a very agile way. In an architectural sense, I want to make the whole environment much more modular and loosely coupled.”

In terms of digital services, Richardson says technology is probably the key driver for growth in the business. The definition of success during the next 24 months would be that his team has delivered a range of products that help frontline staff work more efficiently and effectively. “I want us to have a big impact on our business and for people to say, ‘Wow, over the last two years, digital technology has transformed the way we work’,” he says.

Richardson is proud of the European technology team he’s created. Once the scalable infrastructure foundations are in place at PepsiCo, the next stage will be to deliver useful products time and again, which means constantly thinking about innovation and provoking business partners to think differently about how technology can be used to run the enterprise.

“We’ve gone a long way from just being a service organisation. We’ve made a big move from being an order-taking organisation to a trusted business partner. But now it’s about taking that next step so that we’re seen as being the team that is driving innovation,” he says.

“Moving to that next step requires a different mindset. It means going from the old-fashioned approach that’s centred on running the infrastructure and simply doing what we’re asked to do, to developing a good partnership with the business that enables us to lead change and ensure digital is always seen as the key element that drives sustainable business growth.”