Episode 66: Leading and Thriving Through Adversity, Interview with Al Carey

Well, sure. I began at the University of Maryland, and when I graduated from there, I started with Procter & Gamble in their sales department. I didn't even go to school for business; I went for poli-sci, and I ended up getting recruited by Procter & Gamble, and they trained me to be a salesperson and into management. Eventually, I ended up going to Frito-Lay, so I spent 38 years at PepsiCo and just retired a year and a little bit ago. My last job was the CEO of the North America business for PepsiCo. Since then, a couple other things I do: I'm the chairman of the board of Unifi, which is a textile company in North Carolina making sustainable materials for athleisure, and on the board of Home Depot, and my university, the University of Maryland, and the Bridgeport Rescue Mission.

Well, no, it's great. I know we connected—you were on the board of a non-profit that we've done work for, and we definitely met back then. But I guess, knowing this is a question I like to ask almost every guest that we have on. Now that you've had an incredible career and continue to stay very active, knowing what you know now, if you were able to go back and talk to a 22-year-old Al and give him some advice, what advice would you give him?

That's a good question. I feel grateful for everything that happened in my career; a lot of people helped me get to where I was. But one thing I've discovered is that leadership is more important than I even imagined. So, on a skill set review, you look at analytics, you look at sales ability, insights—it is clearly leadership. People want to be led, and it's really important for a leader to not only have confidence but also to give confidence and to serve others. When I finally learned as I went on is that your role as a leader is more to remove obstacles than it is to tell everyone what to do, assuming you have the right team working for you. That has to happen. But I would say my recommendation to myself was: have more confidence in the early days, expect more of yourself, but then give to your people and help them develop by giving them confidence. It really makes a difference. As I look at some of these young people that we've developed over the last few years at my last job at PepsiCo, what I'm most proud of is seeing a bunch of them elevating through the system. It's remarkable. Once those young people get some confidence, they can step up. If they're always playing defense and looking behind their shoulder, they won't develop. I remember a couple of jobs where I didn't have confidence, and you stagnate. Then I remember a couple of executives that I worked for who really gave me confidence by acknowledging that my ideas were good, by complimenting me in front of large groups, or promoting me. It's such an important thing. So, it may sound vague, but I think if you're a young person coming up through the ranks, if you have a leader that can give you a little bit of confidence in yourself, then you are able to give it to someone else. It's the same thing in sports, the same thing in parenting. You can build people and nurture them. This is a really important learning that I've had.

When you asked me about this, this might be one of the topics we talk about: managing through adversity. Wow, now is the perfect time for talking about this topic. Over the years, I counted up the number of jobs I've had—something like 20 different assignments. Not everyone was a promotion; some were laterals, in fact one or two were backward moves. But overall, out of the 20 jobs, I had six or seven where I had to totally turn something around. We were in adversity, either because we did it to ourselves or because we were in a difficult time like right after 9/11 or the collapse in 2008. What I noticed is that when your organization gets into an adversity situation, there's a tendency to play defense. Everybody's very careful about not making decisions or moves that could possibly blow up on them, so there's a lot of caution. I actually notice the team starts backing up and playing on their heels because they don't want to make a move. In a time of adversity, everybody gets in the corner and talks about how bad things are. But I've learned through experience that during these times, now is the time to play offense. Because as the world is moving and shifting, you can actually get ahead by playing offense since everyone else is playing defense. I'm not talking about being arrogant; I'm talking about setting targets, keeping the team motivated to play offense, and thinking that you're going to make this an advantage over time. I read this book by Eric Weihenmayer, the blind guy who climbed Mount Everest and the other six peaks around the world. It's an amazing story. He has a book called The Adversity Advantage. I've read that book and I know him well—he spoke at many of our events. When I hear his story, I think, my God, if he could climb Mount Everest totally blind, depending on the people around him to help him make it—that's taking an adverse situation, becoming blind, and turning it into an advantage in what he's been able to accomplish. I really believe that the leader sets the tone during adverse times, and the troops will take guidance from the leader. So your responsibility—and I don't care if you're leading two people or 100,000 people—your approach is going to make a big difference, especially on young people. When they grow up into the business someday, they're going to look back and say, 'I remember when we went through this adversity, and here's how we did it.' They'll move forward and bring the people along with them. It's a remarkable thing to watch. In a couple of my last maneuvers in tough situations, I saw the young people now who have moved into key roles have learned from that experience. I had one experience where I thought our company was going to get split up. We had an activist investor that was being really tough, and our company did not deserve to be broken up—we were one of the premier companies. My response to the team: I had these big town hall meetings, and they asked me, 'Do you think we're going to be split up?' I said, 'Absolutely not. But I will tell you this: I don't care if you're an activist investor or a non-activist investor, every investor wants their stock portfolio to improve. So we just need to deliver the results and not worry about all this stuff going on.' I tried to keep the team focused on positive movement in the right direction, and even celebrate the little wins. After a while, not only did the activist investor leave, but they made a great profit and we turned our business around. It all had to do with the way you coach your people through this.

I'm pretty active in one company right now, and I'm the chairman of it, but I'm an executive chair, which means I'm actually in the day-to-day business. I gotta tell you, this is a unique group because we made some changes, made some of the right changes in the leadership, and it's a resilient, positive group. I don't have to make them believe in the future; they already do believe in the future. But you have to communicate frequently. Even if it's Zoom—I know I don't like Zoom, I get tired of it. I did 10 in a day sometimes. After a while, you'd say, 'Well, it's better than what we would have had. We would have had conference calls.' At least you can have some kind of a view of your people. But you've got to put frequent updates—don't make them long, but frequent updates with your folks. Make sure you're not just talking to your direct reports. Last week, I had a series of probably 10 meetings, and I asked for the function head plus several of their key folks to be in the meeting so I could give them a chance to present and talk about their business, and see if there's anything I can do for them. I always end the meetings with, 'What can I do for you?' and 'What do you think about the business?' Those two questions I've learned over the years are really important: 'What can I do for you?' and then 'What do you think?' Give them a chance to weigh in. Because what I fear is that during this pandemic, if you don't have frequent communications, the group goes stale. They don't seem to be as inspired as before. So I'd say frequency of communication, continually putting the goals out in front. The pandemic has hurt a lot of businesses, including ours. You've got to put realistic goals in front of them so that they feel like they can achieve them. When they achieve them, you celebrate them. Make sure you're sending out notes. Every employee loves to get a handwritten note that says, 'Congratulations, great job on this. We really appreciate what you're doing.' I've seen people in my years gone by—I wrote them a note and they posted it up on their board, and they say, 'Al, I got your note from three years ago.' I think, 'Wow, I didn't realize it was that big of a deal.' Anything you can do to make it more personal is really important.

I'd give my old boss Indra Nooyi credit for that. She came up with this vision 12 or 13 years ago called 'Performance with Purpose.' Each of us then went off in our own divisions—I had North America, other people in Asia and Europe—and we executed it with a twist that made sense for your local region. But the idea was that PepsiCo has always been known as a high-performance organization—stock performance good, a lot of pressure on delivering the goods—to the point where we were sometimes known as a rough place to come to work. This idea of 'Performance with Purpose' was very appealing not just to the young people in our organization but to the old people and the street and our investor community. What it meant was: we're still going to have this high level of performance, but we're going to do it with purpose, not at any cost. We never do it at any cost, but I mean being so focused on the one thing. What that meant was purpose in three areas: one, we were going to make our products healthier; two, we were going to be a significant reduction in our carbon footprint in the environment; and three, the way you treat your people. We talked about cherishing your people. There's a big difference between running your team hard and getting high results, and nurturing your people so you develop their career and develop them as a person as well. Over the course of 12 or 13 years, that was very successful. We made significant improvements in taking out sugar, fat, and sodium, and worked on improved quality of products. We also made giant strides in the environment, particularly on water usage and fuel reduction. And the third one was people, which I got the most out of. I kept working at PepsiCo for 38 years not because I loved the products, but because I loved seeing the development of our people, especially the ones I brought off college campus. One is now the CEO of North America Beverages. The other guy I picked up is a junior sales guy named Stephen Williams—he's now the first African-American CEO in the history of PepsiCo; he runs Frito-Lay North America. To see those two come up from the ground up is a very rewarding experience, more than getting promoted yourself.

As I moved up the ranks, I got to a certain position where I had a lot of people reporting to me, and I realized you can't do this all by yourself. There's no way. I don't know of any executive who can do it all. But you start feeling like, 'I've got to figure out how to engage my people so they do the work and get the success, and I'm an enabler who helps them through that.' What I realized is that this command-and-control work style was not working very well. So the idea is that the old model was a pyramid: at the very top of the pyramid is the CEO, and the CEO's the most important person in the company, then senior management, then middle management, then the front line. When it actually is the other way around: the most important person in the company is at the top—that would be the front line organization, because they're closest to the customer and closest to the consumer. Then the next group below is the first-level supervision, then middle management, senior management. The least important person in the whole company is the CEO. Once you have a strategy that makes sense, your role is to remove the obstacles for the thousands of people out on the front line actually doing the work. I found when I first became a CEO, this really works a lot better than command and control. When I took over Frito-Lay, I installed this servant leadership model, and I called it 'Focus on the Front Line.' The idea was that I could probably do more good as the CEO of that company by asking people, 'What are the obstacles that are getting in your way towards the goal?' When they told me, a lot of times I could get that obstacle removed very easily. I shouldn't be in my office telling the people in California what pricing they should be running or what strategy on capital or what sales strategy they should be doing. If I have to do that, then we probably have the wrong people running the jobs in the field. I prescribed to that strategy. I read several books on it, watched people who did an enormously good job in that way, and realized you can actually get better results from a large organization by serving your team than by demanding and telling them what to do. First of all, I don't know everything you can do, and I don't know any CEO that knows everything you should do. So I love this model. I worked at it for a really long time, and there's no question in my mind. Some might say, 'That's a soft style of management.' Not really. We still had to take hard actions on some people that weren't performing; that's your role as a leader too. But how often does that happen? 5% of the time, 3%, 2%? I don't know what the number is, but it's not the majority. So I felt that the majority of our people should be empowered, and I should be there helping them remove obstacles. I really like the way it worked. I found I could influence more by managing this way than by managing in a tighter environment. I also would say that in today's environment, these young folks coming off college campus today are totally uninspired by the command-and-control model. So I would suggest to a leader: you better learn the servant leadership model, because that's really the way to manage in the future, in my opinion.

I'm a real believer in feedback. Unfortunately, over the last few decades, I remember when our HR department was very big and we had plenty of resources that would help administer some of the coaching work we do with our people and the performance appraisals and performance management. As the years have gone on—not just at PepsiCo, it's almost across the board—a lot of that support has been removed as people have taken restructures and taken costs out of their system. The first thing that goes seems to be training and development, because on the surface it looks like you don't have to have it. But believe me, if it goes away, you'll really realize that you need it. I think most companies have fallen backwards a little bit on the whole idea of performance leadership and giving feedback. One of the things we did at PepsiCo was have our performance appraisals once a year, when we administered any salary increases or compensation changes. But then you had to have a mid-year check-in. Everybody had a mid-year check-in, and you had to report back that you did it. Sometimes I would meet with someone and say, 'Did you have your mid-year?' and they said no. I'd say, 'What about your performance appraisal?' Sometimes it was no. It's absolutely unacceptable. So one of the things I would do with my performance appraisals, instead of making them a gut-wrenching session, I would always start out and say, 'Over this last period, I want to tell you about where I've seen you at your best.' Those words, 'when I've seen you at your best,' light someone up. You've got to spend some time thinking about this so you can document it. But here is when I've seen you at your best. I always go through twice as many positives as I do negatives, and I try to limit the negatives to two or one. I'll say, 'Here's when I've seen you at your best, here are the good things. Now here's what I need some help on, and here are the one or two things I need you to do.' It's all in the way you present to someone that determines how they take it. I've had some people leave those performance appraisals thinking, 'That's the best performance appraisal I've ever been through,' because you actually took my strengths and built them up, and then you told me what I need to do. I get it. I know I need to do a couple of things differently. You can end up leaving somebody on a high, or you can destroy their morale depending on the way you deliver. I think over time, we're going to have to put a focus on this. You probably notice in your business that many more companies are hiring executive coaches. The reason for that is it's supplementing the HR role we used to have. We just don't have all those people. But I think there's an executive coach role out there that could be really valuable. I've brought one in for this new company I'm working with, Unifi, and just having an executive coach brought in—we're paying the tab—somebody gets six months of advice, guidance, and direction. They can ask any question that won't go back to your boss. It's a very positive thing.

One thing I learned a few lessons: don't forget who they're representing. They're not your friends. You can have friends on the board, but they are representing the shareholder, and they're there to make sure that the way the company is spending its capital and driving its future and investing for the future is going to be in the best interest of the stock price. You have to always think about that. It might change your opinion on your approach to how you meet with the board. But I always found that whenever I had to present to the board, and even now as a chairman of a board, you want to bring in as many of your young people to present their ideas as possible. But don't waste their time on minutiae. Keep it high level and strategic, because they're there to give advice on strategy, not to manage the details and operations of the business. Some things are clearly board approval; most things are management approval and you're just advising the board. But on the few things that require board approval, be specific, get to the point, and show what the return for the investor is. Don't lose sight of that. Sometimes we don't—I've made the mistake myself.

The author is Eric Weihenmayer. It's about his journey. He went blind at age 13, and then ended up climbing mountains—Mount Everest and all the other six peaks around the world. Now he's coaching wounded veterans on how to climb peaks. Watch the videos or movies of him; there won't be a dry eye in the house. It's amazing what he's accomplished, and he's given confidence to others too.

I read a book called The Seven Laws of Spiritual Success by Deepak Chopra. There's the law of giving, the law of serving—it's about intention. There are so many interesting things about developing your psyche that would help you in the business world. Another one is by Wayne Dyer called Inspiration. He's like Deepak Chopra, only the Western version of it. He's recently passed away. And then there's a book called Servant Leadership—I forget the author, but it's a wonderful book that explains some of the things we were talking about earlier.

Recharging is really important. I'm not sure if I didn't have a recharge program, I would have lasted 38 years. I would have burned out somewhere along the trail. So here's what I do: I was a former athlete in school—a distance runner—and I've kept up with working out five days a week minimum. But now I've moved away from running because all that pounding over the years from marathons takes its toll on your knees. So I row or do the Peloton bike, which I love. So I keep fit. The other thing I try to do twice a day—and I don't always get it done—is meditate. I never put this cell phone on my bed table. The cell phone can be great; it can be your enemy too. I don't want this thing going off in the middle of the night, and I don't want to wake up and see the 30 emails waiting for me. It's going to wait. I'm going to get up, work out, meditate, then I'll get to it. If there's an emergency that comes up—rarely is there that much of an emergency that it can't wait for an hour or two. I really think it's important that if you don't get control of your own power before the day starts, you'll default to every damn thing that comes to you, and you'll literally be run around by your calendar, emergency phone calls, crises, and all that kind of stuff. You don't want that. You want to be in control of your agenda and address things calmly. One of the things I've learned is that the leader has to be calm and thoughtful, and you can't do that when you let this thing run your life. It's ridiculous. I've seen some people in high-level jobs looking down at this the whole time I'm talking to them. I say, 'Hello, are you there? Put this down for five minutes and we're going to complete the conversation.' You really have to watch out that you don't get addicted to this iPhone. There are lots of things the iPhone does really well. Another thing: everybody's different. Some people work around the clock constantly. I called my job 24/5. I get up on Monday, run my rear end off, and on Friday night I'm going home. Did I ever work on weekends in my whole career? Yeah, but not often. If I didn't do that, I can't do the seven days and be back on Monday. I just can't do a burnout. I'd say 85% of the time, when Friday night came, I was done. Would I look at my emails on Saturday morning? Yes, but for one hour. Then I didn't look at them all on Sunday, or maybe I looked at them on Sunday night, but I tried to minimize it and spend time with my family. Over the years, before these things came up, I coached the kids in little league, the girls didn't want me to coach them in dance, but I showed up at every dance competition and all the hockey games. I think if you miss out on your kids' adolescence, I wouldn't recommend it because I haven't met an executive at the end of their career who said, 'I wish I would have worked more hours.' Many say they wish they had spent more time with their family. That's a sorry situation.

A couple of things. One: you should be bold and expect a lot of yourself. Think high. I love this idea of creative visualization. Imagine yourself five years out where you want to be, and push yourself to get to the highest possible level. But then come back and just focus on your current job. Keep your head down and work really hard to get good results, because the promotions will follow the results. That's what really counts. The other thing I'd say is that at some point, when you start having a leadership role, spend more time trying to get results through your people—empowering them, working with them, coaching them, and developing them so you get the benefit of many doing the work, rather than just you up there telling everyone what to do. You don't know everything. I don't care how smart you are. I had a boss who was the absolute greatest—nationally known, I'd call him a celebrity CEO at one point. But after working directly for him for a while, I realized he had some big blind spots. So this is important. I realized that he was actually quite weak in probably two areas and then world-class in some others. I noticed he surrounded himself with people that were complementary. This is really important because I'm not a finance guy. I came up through sales, marketing, and operations—field operations. I'm never going to become a left-brain financial expert. I always made sure that I had the absolute best CFO working for me or financial head, and I didn't mind if they disagreed with me. In fact, I encouraged it. So if you're setting up a team, don't try to make everybody like you. The best thing is to have diversity on that team—diversity of gender, diversity of culture, but also diversity of experience. If you're a strong leader with a sales and marketing background, a commercial background, make sure you build a strong strategy team around you, some people who are great financial experts, and probably supply chain experts. You're never going to know it all, so don't be afraid to admit that and bring in the right talent around you.

Well, thank you, Mark. It was enjoyable, and it was good being with you today.