|
Research on organizational silence shows that widespread withholding of employee input about problems compromises organizational decision-making and impedes organizational change. Without negative feedback, errors tend to persist and may even intensify because corrective actions are not taken when needed. When organizational cultures punish the surfacing of problems, the information required for effective leadership decisions is withheld. The result is that organizations lack the capacity to detect and correct errors before they become systemic. When Indra Nooyi became CEO of PepsiCo in 2006, the company was thriving. Revenue was strong. The brands were iconic. By every conventional measure, the business was healthy and the strategy was working. She saw something the numbers had not yet confirmed: consumer attitudes toward health were shifting. Not dramatically. Not all at once. But in a direction the portfolio was not designed to address. Nooyi did not wait for the shift to become a crisis. She read the signal while the core business was still profitable and initiated "Performance with Purpose"—a transformation before the market forced one. She categorized the entire product line and began redirecting investment toward healthier options. The resistance was immediate. Investors told her to focus on soda and chips. Senior leaders questioned whether health belonged in a performance-driven culture. Revenue grew 80 percent over twelve years. The company was named among the world's most ethical companies for ten consecutive years. The transformation she initiated before the pressure arrived became the foundation that carried the company through a decade of shifting consumer expectations.
|
