7gen Bloc

If not enough people are drinking Pepsi or eating Frito-Lay snacks or otherwise consuming PepsiCo products and sevices to justify those 3000 jobs, what do you propose that PepsiCo do with their excess workforce? What would be the smart long term strategy? Keep everyone on staff and shift their focus to marketing to fight against consumers' desire to spend less on junk food? Shift them into new Pepsi businesses (hopefully new businesses built to thrive sustainably)? Keep them hanging around and doing less work during the recession, and then get them going full speed again once the economy is doing better? I agree that it's a total bummer that PepsiCo is letting heaps of people go, but if the cola's not selling, I'm not sure it's fair to get too angry at PepsiCo for that. Am I missing something?

Here’s my point more directly. If sales at Seventh Generation slow below our projections or costs rise - letting our staff go is always a last resort. In the 90s when we missed our numbers I cut my salary down to almost nothing, renegotiated every agreement with every supplier from our landlord to our copy machine provider before I considered letting a single person go. If I missed my numbers for a few quarters, so be it. In companies like Pepsi, people are often the first to go. In Pepsi’s case this included the head of sustainability -- so much for their commitment to the environment. The idea that people at Pepsi would hang around and do nothing is unlikely. Right now, as Toyota reduces the number of trucks it is manufacturing, they are using the time to train and educate their manufacturing staff so when they go back into production they will be even more efficient.
--Jeffrey

I worked for Hewlett-Packard for 21 years. The founders of the company were explicit in valuing their employees. When things got tight, they were the first to take pay cuts and asked their managers below them to do the same. I can remember times when we were asked to work 4 days a week to cut back. They did everything in their power to keep their workforce. That spoke volumes and in return they got commited people doing their best for the company. Once the founders had passed on, the company changed and the "HP Way" was left by the wayside as a new CEO came on board and cleaned house. Now HP is just like most other companies. Those at the top will do anything to save their salaries and let the rest go. People are expendable. It's a sad statement. Jeffrey, it's nice to know there are still a few companies out there that value their employees.

While I admonish Pepsi for not keeping their employees first, it appears to me that we are headed for a needed transition. The phrase paradigm shift is often used to describe a shaking up, absolute change of direction, a redirect towards something outside the norm... we are indeed headed there.

Mr. Hollender, I wrote to your company five years ago about the important consideration of doing more with less. Namely, the concept of launching a reuse test market of your laundry bottles, which using a bulk 55-gallong container at select facilities, could be used many, many, untold times. They are overbuilt for a single use and the energy and raw materials are overspent. Albeit these things are affordable still and increasing in cost, how does that compare to William McDonough's 'Cradle to Cradle' recommendations.

My suggestion is that we all look for ways to conserve and seek ways to employ more people in a conservation movement. My note to Seventh Generation is to figure out how they can plan and implement a reuse program through their distribution channels that would decrease energy & materials use while growing their brand of eco-sensitive products, and employing some of those individuals whose companies and products are subject to a widely recognized trend related to reduced consumption of certain goods and services. This, is doing more with less.

As for me and mine, we'll see you out there, on our bikes of course - JD Howell, Eugene, OR

Thank you for your comments.
--Jeffrey

I agree completely with Inspired Protagonist. If a company is doing badly everyone must do their share to offset rising cost of business and the down turn of the economy. I figured, if everyone of these executives who make $20 million or more gave up $2 million of their salary for a total of $9 million dollars than they would be able to keep all 3000 people at $30,000 a year.
If you plan on keeping an economy going you don't do it by eliminating the people who spend the most money, and I am not talking about price tags. You do it by giving money to those people who spend on a steady bases, which is usually the poor and the middle class of society.
The rich could never keep an economy going because they already have all they need and can never support all the business and products that are out there. Yes, I understand that the rich own a lot of real estate and cars, but how much food or clothing can they consume or buy, how many TV can they buy, how many cars can they buy. They can't never buy enough to make a economy strong that is why a strong middle class creates a strong economy. The only way we are going to fix this economic disaster is by putting more money into the poor and middle class on a steady bases. That means creating more jobs that pay more then $15 dollars an hour. That means you help people who want to go back to school, by giving them money that will allow them to pay tuition, in exchange for service rendered instead of giving them loans that only burdens them in the long run. We need to think differently on how our economy works because society has been growning but our way of doing business has stayed the same.

Big companies that need to reduce costs - or who have a change in their market and need to reallocate employees - can accomplish a surprising amount of this transition through attrition. Attrition is not without costs, but then neither is a mass layoff with severance benefits paid. Normal attrition is about 3% so over a three year period roughly 10% of the workforce can be "reduced". Some argue that attrition allows the "wheat" to look for other jobs and the employer gets left with the "chaff". However, a truly enlightened employer would not have this problem. It only occurs when the employer makes life miserable for all employees and the good ones succeed in finding alternatives. Ironically, the reason I drink (Diet) Pepsi is because of my disgust with Coca Cola who laid off even more people during "good times" in order to boost its stock price.

I think its kind of off the topic of the article, but I like what JD was saying. I think It would be great to take the containers I already have and just refill them rather than buying a one every time. I don't know exactly how such a plan would be implemented, but I know there is already a similar idea with water. You take your jugs to the store and refill them and/or recycle them. Why not do something along the same lines with other products?

Just a thought!

CK

Thanks for your comment. I totally agree we need to do more with less. In the coming months, we will be announcing an increase in the post-consumer recycled content of our bottles - from an average of 25% up to 75%. But that's not enough. We are also investing significant resources in refill systems. Unfortunately, because of the complexity of these systems I do not know when and if they will reach the market. We are also exploring take-back and reuse programs. Not as much movement as I would like but we are focused on this as a key strategic initiative.
--Jeffrey Hollender

Folks,
I applaud your passion on this subject and appreciate you sharing your viewpoints. I think the conversation is enriched by diverse perspectives.
This is a tough situation for Indra and a lot of Fortune 500 CEOs. This is the nature of being at the helm of a publicly-held company. Job cuts often do help your financials in the short term. And heaven knows the trouble the "short term" view got us into. However, the evolution occurred and now we are all facing the prospect of getting out of this mess. We are just beginning to understand how to attach true value to things and organizations. Layoffs will continue to happen as companies struggle through this tough time. Stakeholder theory is put into practice more and more, but in the end if you are beholden to Wall Street (publically held), you perform to those measures. I don't say this in the spirit of giving up; I say it in the spirit of acknowledging the existing system. I believe that by understanding the system we can trace the causes and find a way through toward a truly sustainable future on all fronts. More and more people are realizing that we are ALL connected, so job cuts at PepsiCo have a far-reaching effect that falls outside of Indra’s jurisdiction. It’s a bit daunting to be the CEO and understand that you affect far more than you are paid to influence. What would YOU do when faced with that reality?
SG has the good fortune of not being subject to the opinions of Wall Street, to a point. Therefore, Jeffrey has a lot more autonomy to cut his salary, retain employees, nix or develop product lines, say “no” to customers, etc. It’s a blessing, but it does limit access to capital. While it’s his choice to pursue that capital, access to additional financing can enable companies to grow; and if that growth is toward a sustainable future like SG’s…then this is good for all of us. It’s just when this idea of “growth” (and therefore debt) is pursued at all costs (and rewarded on Wall Street) that we run into the current financial debacle we are facing. Trees do not grow to the sky. The tireless pursuit of “growth” and “the spread” is indicative of the shortsighted perspective Wall Street (and countless other organizations/individuals) applied to business. If you have a mutual fund, a retirement account, real estate investments, etc: you, too, contributed to this. You expected returns. They delivered. And now you criticize? There has to be something more than “growth” out there.
Predominant philosophers, businesspeople, and educators are convening on this fact, and applying it to frameworks to help businesses large and small and their people drive toward a bright future. Check out MIT Professor Peter Senge’s work on systems and sustainability. He really is on to something: it is through collaboration and communication that we will build a bright tomorrow. Drawing party lines, pointing fingers, laying blame; all is counterproductive to the issue at hand.
Jeffrey et al: we are in this together. Now IS NOT THE TIME to be divided. We all need to talk to one another. To share information. To collaborate. To see organizations as a collection of people instead of intimidating and behemoth superpowers. In order to build a better world we HAVE TO come together. I used to be the loudest of the dissenters against corporations. I even lived in Humboldt County, CA after college; OF COURSE I was opposed to corporate America. Yet I left a closely-held company (Burt’s Bees, which was at the time privately-owned) to get my MBA and work at a huge corporation. Why? Because I came to understand that MY role in all this is not to shout from the picket lines or start something on my own; but to help a company change from the inside out. Some people are better-suited for their own entrepreneurial ventures (Jeffrey). I applaud them. Conversely, I want to understand existing organizations and help them change from within. I cannot tell you how enthusiastic people at PepsiCo and Frito Lay are about sustainability; they just need people who have it in their DNA to help them find a way! That’s why they need alliances with people who think this way, both on the inside (me), and the outside (Jeffrey, for instance). I figured I could do more good working at a $30Billion powerhouse than one who only has a 2% household penetration in health & beauty. God bless Burt’s Bees, but PepsiCo is at a colossal advantage operationally and financially to make some HUGE changes! They just need to leverage the momentum and find the right path that considers key stakeholders. It is not easy. But dangit we do NO GOOD by shouting at one another across the line we’ve drawn in the sand. I’m a human, you’re a human…start from there, have some faith, admit that both sides could learn from it; and then we can make true progress.
I rode my bike to work at Frito Lay this summer. 30 miles and 1.5 hours each way. People looked at me funny, often asking how on earth I had gotten to work without dying. Because their realm of experience was in a 1-ton hunk of speeding steel on the interstate. They didn’t understand all the backroads and residential streets that could deliver me, safely, on my bike to the same corporate headquarters. When it told them about my route and opened up their eyes to the various ways we could journey to the same place, they learned a little more about my perspective. And I also learned a bit more about their reality, which was the polar opposite to mine but just as valid. In doing so, I was reminded that not everybody sees a sustainable future where we wear Birkenstocks, use vinegar-based non-toxic cleaners, and grow wheatgrass on the windowsill; but everybody wants a sustainable future! It is up to us to listen to one another and decide just what that looks like; I bet it won’t be what anybody expects but it’s only through collaboration that we find out. Birkenstocks or not, I think that it’s time we had the conversation.
Bless you all and keep fighting the good fight. But let’s not fight each other; just the status quo.

I am no expert, but I think we're missing the forest for the trees. Here's the thing that bugs me when I hear companies like Pepsi and the like talk about sustainability and reducing impact on the earth: we don't need these products to begin with. They are harmful to our health, they lead to weight problems, they are a waste of money, they create unnecessary waste...does anyone know how much water it takes to make one liter of cola? A lot.

And no matter how much they give back to the community or create jobs or anything like that, we'd all be better off if they never took from the environment/community to begin with. And we could spend our money on real food like fruit and veggies, and people could work for responsible places like Burt's Bees or Seventh Gen or recycling companies or renewable energy companies...

...I'm ready to see a "Changing of the Guards" when it comes to the top corporations. These kind of companies that make beverages and snack foods and less than quality products that were made in China need to see decline and sustainable companies need to emerge on top.

I, for one, am glad for this slowing (almost to a hault) of the economy, so that these necessary changes will take place and consumers will demand more responsibility to be taken with their hard-earned money.

back in school i remember how much pepsi was drank at my house i had a few cans a day and thought nothing of it today looking back i feel like if it were beer someone would have sent me to a alcohol rehabilitation place the next day. I really don't like soft drinks and opt for teas instead.