Fortune 500, General Management, Industry Insights, Outside the Bubble, Recruiting

From MBA to Fortune 500 CEO: Fireside Chat with Steven Reinemund, former PepsiCo CEO

Preeya Sud

Preeya Sud

It is hard to know what to expect when going to meet a Harvard Business School case protagonist in person. In our HBS cases, most CEOs spend an awful lot of time staring out of windows in heavy contemplation. Windows, it seemed, were critical to learning.

This robust theory was unequivocally overturned when I met Steven Reinemund in an underground room on campus. No window, but a wealth of invaluable advice for MBAs navigating their first few years out of business school. From inspiring others to balancing personal and professional life, Reinemund’s five tips for the Class of 2016 are broad in scope yet tangible to implement.

#1 Don’t Focus on the C-Suite

A Darden ’78 MBA graduate, Reinemund spent 22 years at PepsiCo, eventually becoming CEO between 2001 and 2006. During his tenure, revenues at the food and beverage giant grew by $9 billion, and he led several acquisitions including Quaker Oats and Naked Juice.

However, becoming CEO was never part of his vision when graduating. Instead, Reinemund’s burning desire was simply to run a business, get satisfaction, and make a contribution to the enterprise he operated in. This may seem at odds with popular culture – it is often posited that those who make it to CEO have had that ambition clearly mapped out from an early age.

In fact, Reinemund believes this view is particularly dangerous for MBAs. He argues that one of two things can happen when MBAs have too much of a C-Suite focus at the beginning of their careers. Firstly, they are unlikely to enjoy the journey. Secondly, they are highly unlikely to get there, because it is transparent to others when there is an extraordinary focus towards the CEO role.

Instead, Reinemund advocates that the best foundation for success is to find a career in which you are “passionate about what you are doing, the business that you are going into, and the people that you work with.”

However, while many of us come to business school starry-eyed with the hope of switching out of our old careers, the reality is that actually finding our calling is easier said than done. As one current Harvard Business School first-year put it after landing her summer internship, “I thought I knew what I wanted, but when I actually got it, I was like… what have I done?”

#2 Find Your Calling

So how do you find your passion? Reinemund believes that “it starts with knowing yourself, knowing what you do well.” However, he cautions that being an MBA student can be a double-edged sword. “One of the advantages of coming to a place like Harvard is that you meet many accomplished people. You have access to tremendous resources and professors. The disadvantage is that you can allow the environment or others to define what your fire is rather than [defining it yourself].”

This is the catch-22 of Harvard Business School. “You can do anything – the real question is finding the right thing for you.” Reinemund encourages students to sit down and take a weekend to write their life story from as far back as they can remember. The trick is to find connecting threads between things that you have done well and things that you have enjoyed doing. This might lead you down an unusual career path, but he stresses that “taking the road less travelled and really doing it well can give you great satisfaction.”

Why is it so important to find your calling? Reinemund argues that unhappiness in a career can seriously jeopardize your chance of success. “If you aren’t happy, people around you aren’t going to be happy. They aren’t going to want to work for you. You are not going to inspire them to have visions of accomplishing things they thought weren’t achievable.”

This exercise was one Reinemund himself went through. He explored his past and realised that from a very early age he liked organizing and leading teams – from elementary school to the Marine Corps. It meant that he had a clear idea of what he wanted to do with his post-MBA career. He knew that he wanted to be able to run something, and this shaped his decision to go into the restaurant business rather than into any specific function like marketing or finance.

#3 Build Competence

After passion, MBAs should focus on building competence. Think about truly successful people that have made a difference in the world – what links them all is competence. This is easy to say, but how can MBAs actually achieve the requisite proficiency?

According to Reinemund competency rests on two main factors. “One is intellectual horsepower, a love of learning, a thirst for knowledge. The other part is experience. Actually doing things and getting results. Combining these two aspects gives you experience, credibility and the capability to innovate.” And, as we learn in every TEM and STRAT case, innovation drives growth.

Reinemund cautions that with only one of those factors, you are likely to fail. The example he gives is Steve Jobs. “Early in his career he had a great idea but failed, because he didn’t have the experience. Jobs went out and got that experience. He was [then able to come back] and take a bankrupt company to the highest market cap in the world.”

#4 Be creative, show fortitude, and inspire others

It is May. The reality of leaving the Harvard Business School bubble for internships and post-MBA jobs is rapidly sinking in. While we physically leave campus, it is unlikely that the HBS mantra will ever leave us. HBS wants us to be leaders who make a difference in the world. My question to Reinemund was whether he had ever seen an MBA graduate who had done this. His answer was immediate.

“I think what’s missed by many young people is the difference you can make in inspiring others to do great things. If you can lead a group to achieve an objective that individually they didn’t think was possible, that changes the way people think about business. It takes away the incrementalism of business and causes people to think in terms of step function changes.”

While at PepsiCo, Reinemund saw one young MBA graduate do just this.  “Every Friday afternoon we ran a meeting where anybody could come in with ideas. We would listen to them and bet on them or not.” This particular graduate had had an idea for a new product in the Frito business. “Most of us were pretty skeptical about his idea, but we said if you can get the endorsement, an actual written agreement that [this party will] participate with us, we’ll do it. All of us thought there was no chance. He came back a month later with the signed agreement and we developed a product that turned out to be a major hit.”

# 5 Create a Personal Board of Directors

Generation Y has typically left it later to settle down and have families. But the truth of the matter is that grappling with ambition, career, and family is something many MBA graduates will have to do over the next few years. Reinemund believes that it is impossible to “have it all,” stating that “there are costs and trade-offs in the decisions of life.” So how should we optimize?

“It starts with defining what success is and what your priorities are.” He encourages students to think about these two things in the short term, and then project the consequences of specific actions out twenty, twenty-five, thirty years from now. It is knowing that spending time with family now may mean that when we are fifty, we will see less qualified peers in bigger jobs whom we cannot hope to catch up to. Or, on the flip side, knowing that if we focus only on career at thirty-five, we will never get that time with family back.

However, life constantly tugs us in different directions. How can we make sure we stay on our chosen course? For Reinemund the key is to set objectives and guidelines early on and have a group of people to hold you accountable to those boundaries. As for any business, choosing the right people for this “personal board of directors” is critical.

Reinemund’s advice is that we should choose those who have an unselfish commitment to saying what we need to hear, not what we want to hear. They should be people we respect, whose lives we would want to emulate. People we can be vulnerable in front of. Last, but not least, they should be people who will spare time for their own busy lives to talk to us.  

What about Reinemund’s own personal board of directors, carefully developed over forty years? “When I started out a lot of members were senior to me. Obviously, as I got older some of them aged out, and I replaced them with peers. Now I’m beginning to replace them with people significantly younger that have another perspective, including my children.”

Scoring that CEO Office & Requisite Window

We often read cases about protagonists weighing up heavy decisions at the most advanced stages of their careers. My conversation with Reinemund made me realize that getting there, having a CEO office with the requisite window to stare out of, is a by-product of a healthy attitude in the early stages of a post-MBA career. Sure we should plan carefully, but the focus of our planning should be on finding our calling, being passionate about our work, and having clear personal and professional guidelines.
As the classes of 2016 and 2017 go out into the world, Steven Reinemund has one final piece of advice. “Have an inspiring vision that you passionately believe in, that captures the hearts of the people you are trying to lead. Have a vision that will make a difference in their lives.”

 

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Preeya Sud (HBS ’17) is the current Editor in Chief of The Harbus. Prior to HBS she studied law, before making the logical jump to marketing at P&G, where she spent five years working across Scandinavia and the UK. She is passionate about business, politics and writing. 

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May 11, 2016
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