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BY THOMAS BARTA

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PepsiCo CMO Greg Lyons: “We Must Bring Empathy Back Into Marketing”

Here’s for some weekend reading. A little while ago, I sat down with Greg Lyons, Chief Marketing Officer at PepsiCo Beverages North America, for my Forbes column. We spoke about marketing leadership and empathy. He also shared the moving lessons he had learned from his wife, weeks before she died.

I thought this weekend might be a good opportunity to share this personal interview with you.

Thomas Barta: Greg, good to meet you. You’ve just done a global study on empathy. Why?

Greg Lyons: I believe in empathy, now more than ever. Marketing is becoming more data-informed. But I’m a little worried that, with a performance marketing mindset, our relationship with consumers might become more transactional. Empathy couldn’t be more important than it is right now. Just think what it’s like to be African American in the U.S. today, living through extreme acts of racism and discrimination, coupled with the health and economic effects of a pandemic. This community is more exhausted, stressed out, scared, and uncertain about their future than ever before. It’s critical for all of us to be more empathetic—as marketers and as human beings in general.

Barta: So, what did you learn?

Lyons: Empathy matters, but there’s a huge gap. In our earlier study, 97% of people said empathy was critical, but less than half felt our society and our brands were empathetic. In the new study we just did in the midst of the coronavirus pandemic, the number of people who thought society and brands were empathetic went up by 20%. And now, while we are still dealing with the pandemic, we are experiencing civil unrest as a response to these tragic acts of racism. I don’t have data to show it yet, but I have hope and faith that this crisis will make us a more empathetic society. To get there, we must listen, learn and most importantly, take action.

Barta: What can CMOs and companies do to bridge the empathy gap?

Lyons: Be more consumer-centric than you’ve ever been. Make sure you understand what makes people tick. Make sure that the messaging—the marketing, how we act as brands—is not tone deaf; makes sure it connects in the right way with consumers. I think we’ve been at our best at Pepsi during this pandemic. We’re spending much less time on storytelling and more time on taking action on things that help people. One example is helping those who have been hit the hardest by the pandemic. A few weeks ago, we committed $7 million to provide medical and economic aid to Black and Latino communities at a local level, and we are looking to do more.

Barta: Every marketer agrees on consumer centricity. Why don’t we already have it?

Lyons: Great question. Marketing evolves every year because of technology, but some fundamentals will never change. When marketers get too busy with internal issues, brands lose customer centricity. As leaders, we have to continually make clear to everybody that our brands’ job is to help people. This can be through a smile every once in a while, or by doing something that genuinely makes people’s lives better.

Barta: Marketing leadership is all about making both customers and the board happy. What’s the case for you?

Lyons: Marketing must deliver short-term returns and build brands for the long term. We’re going through that challenge right now. How can we perform during this crazy pandemic with all this uncertainty and come out of it stronger as a business? One tough trade-off I just made was to shift a decent media amount in Q2 out to the balance of the year. That was a tough call. You want to perform above your peer group; shifting media is going to impact that, but we know our ROI on one dollar spent when people are not going to restaurants and stores is lower than it will be when the economy opens up. Balancing short term and long term is a constant struggle, and we have to do both.

Barta: Speaking of returns, many people believe firms like PepsiCo have the perfect marketing ROI machine. True?

Lyons: It’s a journey; we’re in a better place than we’ve ever been. But it’s still not perfect. A big change we just made was moving from different models in beverages and snacks to one common PepsiCo marketing mix model. That was a big win. In the past, we would look at success quarterly and then adjust the programs for the next year. Now, we move resources around much more quickly. We are still working on an apples-to-apples full marketing mix model, including trade spend, marketing events, etc. Until we have all that data, we need to make data-informed decisions.

Barta: That’s interesting. What’s the difference between perfect data and data-informed decisions?

Lyons: A data-informed decision means using data as one insight for a decision. You pair this with common sense, history, conversations and listening to smart people with different perspectives to come to a decision.

Barta: If data had the answer, what was your question?

Lyons: I wanted to know exactly what price every single individual would pay for each of our brands while still feeling like they’re getting a good value.

Barta: How do your marketers get stuff done in such a large organization like PepsiCo?

Lyons: Effective marketing leaders are consumer-centric and commercially minded. If you’re consumer-centric but not commercially minded, you could come up with a wonderful proposition that consumers love, but it might dilute margins and could be too expensive to make. It just would not work. You need to understand the business system and how it works. What does the frontline do? How do they spend their day? How do we manufacture our products? Where do we make our money? The marketers who understand the business system and understand how the P&L works are the most effective marketers.

You also have to understand stakeholders. I learned this lesson when I worked on our UK Walkers business. There were lots of things that I really wanted to change quickly, but I failed. After I went to drinks with our head of sales, it was pretty obvious that I didn’t have the trust of my cross-functional peers. So I spent a bunch of time listening to each of them, understanding them, learning from them and building relationships, grabbing a pint. Suddenly, things started moving much more quickly. Without building a network, it’s very difficult in a matrix organization to move things through.

Barta: Let’s talk about your team: how are they coping right now?

Lyons: Through this pandemic, it feels like we’ve never been tighter—and more authentically connected as a department. We used to run into each other in the halls and say, “Hey, how are you?” People would respond with, “Fine,” and keep going. Now, we’re talking every day. When we ask each other, “How are you? How is your family?” It’s authentic. We see dogs crawling into people’s laps during Zoom calls. We hear kids screaming in the background. Now we know each other better as human beings than ever before.

But the crises are also taking their toll – especially on our African American associates. We’ve spent a lot of time this past week listening, having uncomfortable conversations that need to be had. It’s heartbreaking, and yet it’s allowing us to have an open dialogue about the change that must happen, the actions that need to take place. The whole situation is making us a better team, and quite frankly, better people.

Barta: What’s your biggest marketing leadership challenge?

Lyons: I’d say there are two of them. The first is the balancing of the short term and the long term that we just talked about. The second is the team. We have to be there for each other right now. No one should have to put on a brave face and act as if nothing is wrong in our world. It’s my goal that every person in our department feels they can truly bring their full selves to work, and not be worried about judgement in any form. There is no place for discrimination. We all have unconscious biases. The first step is to be aware of them, and the next is to start addressing them. I also think now is not the time to power through. It’s important to me that if people need to just turn off for a day or more, they can do that knowing they have leadership’s full support.

Barta: Has the crisis helped you change things internally that weren’t possible before?

Lyons: Absolutely. We’re making much faster decisions than we ever have—many more end-to-end decisions.

Barta: What’s an example of a significant change you have made?

Lyons: One example is our HR processes. Normally, at the beginning of a year, we would set objectives that would not change for the year. We’ve taken a pause on those processes. We’re much more agile now. We’ve created new processes for being agile with our resources. We are moving people around. As a result, everyone is working on the most critical issues. Our HR team has been terrific partners and the process has created lots of energy.

Barta: After the crisis, what do you want to stick?

Lyons: We currently have very honest dialogues; I want this to stick. If you have an argument with your friend, you can say, “I think you’ve totally missed the mark on that.” Your best friend knows that you’re giving them feedback because you care about them. At work, people would normally be upset by this dialogue—even if intentions were good. We’ve built a new level of trust and have much more honest dialogues. Stephen Covey talks about the speed of trust. I really think we’re trusting each other more and acting faster because of it. Our team is also acting more purposeful than ever. I’m keen to keep the honest dialogues and our strong purpose.

Barta: What worries you when you look at the marketing profession?

Lyons: As I said before, we must bring empathy back into marketing. Brands without empathy will not survive.

Barta: Are you sure? Why are discounters like Aldi so successful?

Lyons: I think that Aldi has empathy. Their quest is, “we’re going to charge as low as we possibly can for great stuff, so you can make ends meet.“

Barta: Good point. Where would you like to see the marketing profession in the future?

Lyons: Marketing leaders in the future are going to need to be more holistic in nature by understanding all key business drivers, understanding technology and how it works in their company’s infrastructure, and not exhibiting a silo mindset. We need to make sure that marketing is a real driver of growth for the company. Marketing should figure out where the company is heading and how to accelerate its growth. The best marketing leaders will be the ones who use holistic thinking and are able to help the company accomplish growth. They will inspire other marketers to be leaders at every level – speak fearlessly, take ownership and listen to truly understand the needs of the business, its people and the people they serve.

Barta: If you could give other marketers a piece of advice, what would it be?

Lyons: Four years ago, I went through a very difficult life experience. My wife passed away. In one of her rare last moments of clarity, she said to me, “There are three things that are important in life. I need you to hear this for me. The first and foremost is family and friends. Make sure that you’re spending the right amount of time and energy on family and friends. Nothing is more important. Two, take care of your health. You wouldn’t believe how important it is to be healthy, to be able to do what you want to do. Three, make sure you spend time doing what you love.”

There’s nothing more I can add.


This interview first appeared on Forbes.com

26/03/2021

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