We’ve written a lot about how to convince executive leaders in your organization to give design thinking a try — demystify the process, call it “creative problem solving,” tout its customer-centric focus. But what happens when it’s the CEO’s idea to use design thinking companywide? If the results at PepsiCo are any indication, it’s innovation, a deeper connection with customers and the customer experience, and ultimately, company transformation.
Pepsi was losing market share when Indra Nooyi took the helm as CEO in 2006. According to Harvard Business Review, Nooyi decided early on that Pepsi needed to rethink its innovation process. She gave each of her direct reports an empty photo album and a camera, and asked them to photograph and document everything they saw that represented great design. The results were less than inspiring, as Nooyi realized that the only thing her employees were thinking about was packaging.
She started looking at Pepsi’s products in grocery stores , and not through the eyes of the company's CEO, but through the eyes of a mother buying products for her family. What she saw was the need to rethink the company’s innovation process and put consumers — those parents in the grocery store buying products for their families — at the center of it all. From product conception, to the store shelf, to the family’s kitchen cupboard the consumer had to be at the core of every part of the innovation process. Nooyi appointed Pepsi’s first chief design officer, Mauro Porcini in 2012, and together they created a culture in which customer-centered design is the focus of every decision made at the company. Nooyi stepped down from the role of CEO in 2018, but her legacy of design thinking lives on. Today, human centered design is at the center of everything Pepsi does, from product creation and packaging, to how it looks on the shelf, and finally to how customers interact with the product.
One example is the Pepsi Spire, the company’s new touch screen fountain machine. Other companies with similar machines have focused on more buttons and flavor combinations, but Pepsi focused on how consumers would interact with the display. The result is a futuristic machine with a big touch screen — like an iPad — that talks to consumers and invites interaction. It tracks purchases and makes suggestions based on what consumers bought the previously. It’s a whole new way for customers to experience Pepsi, and it came about through design thinking.
Another transformation came when Pepsi used design thinking to reimagine one of their lines of chips. They thought about how men and women snack differently, and created a product designed specifically around women’s needs and concerns.
The results? Pepsi’s sales had been flatlining, but in the 12 years of Nooyi’s tenure as CEO sales grew by 80 percent, proving once again that design thinking delivers real business results.
Learn how to enable innovation skill-building at scale here or download our free ebook Kickstart Innovation: A Guide for Organizations.