Challenge: The sales team at Pepsi Cola North America manages a complex network of relationships among PepsiCo, its bottlers and its retail customers. To do so effectively, it needs a fundamental understanding of the economics at play in this vital value chain.

Solution: With major help from Root Learning Inc., PepsiCo developed a course to train its sales force about the financial aspects of the stakeholder partnerships. The two-part exercise includes a Learning Map™ group dialogue process and e-simulation sessions that enable the sales force to view the partnership from the perspective of each constituent.

Like others in the consumer products field, the soft drink industry is continually buffeted by marketplace challenges. At Pepsi Cola North America, management determined the need to infuse its sales force with a deeper understanding of the industry’s marketing and financial pressures, especially those faced by the three entities that comprise the company’s distribution partnership—PepsiCo, its bottlers, and its retail customers.

To do so, PepsiCo turned to Root Learning Inc., an Ohio-based learning provider with which it had worked for more than a decade. It asked Root to deliver a course that would give the sales team a fuller comprehension of the value chain and the financial aspects of the separate entities.

"We needed a heightened awareness by the sales force of the complexity of the business we are in," explains Michael Woodard, manager of sales training and development for PepsiCo. That business is anchored in a truly symbiotic relationship among the three parties, he explains. "Any single action taken by one affects the other two." Woodard says the company also wanted to instill a greater appreciation by the sales team for the other two players in the relationship, especially the business decisions they make.

Two learning tools

The company asked its training supplier to create these two levels of understanding within a single one-day course.

Root bills itself as a strategic learning company that fuses understanding of key business issues with simulation and other modern learning tools and services. Its arsenal includes Learning Map™ modules that employ imaginative visuals to help engage learners on complicated issues including strategy, key initiatives and annual operations plan of the business. Root has worked with PepsiCo to help clarify and communicate the company’s HR strategy and its international business.

"When employees understand the challenges and opportunities within their industry, they can improve their own performance and the performance of their business," says Eliot Wajskol, Root’s managing director. And when it comes to the PepsiCo sales team, "It is impossible to create a real partnership if they don’t understand the key levers of the stakeholders," he agrees.

Root creates customized learning solutions based on a "strategic engagement process" that focuses on three specific areas: the specific context of change, the contents of the issues that employees need to master, and simulated engagement of a real world scenario. "Activities in the sales area offer a perfect example of our approach to how people learn," says the Root Learning executive.

Named Pepsi Sales Economics, the course created for the PepsiCo sales force lasts approximately six hours and is divided into two sessions. The first is a Learning Map™, a colorful and creative instructional board game that provides a visual metaphor of the three PepsiCo stakeholders. Played by up to 10 individuals around a table, it allows participants to explore the many dynamic tensions that exist between various businesses. It focuses on all financial aspects, especially P&L issues and cost structures built into all three businesses. The session accommodates up to three tables.

"When you understand these issues, you realize that what is good for one constituent may affect another one adversely," says Wajskol. "They learn why retailers and bottlers may push back in one area but not others. And most importantly, they learn how to bridge those gaps." Woodard contends that traditional classroom training "could not achieve the results gained in this session." He says the learning map includes components of all three players, "and makes it very engaging and easy to understand."

The second part of the course is called a Financial Simulator. Also customized for the client, it is a simulator that examines the economics of the same three constituents in a more dynamic fashion. It gives learners an eye-opening perspective on the implications of pricing scenarios and other variables, explains Wajskol. The simulator, built in Macromedia Flash, is driven by Pepsi Cola North America’s proprietary data housed in a Microsoft Excel database.

"The Financial Simulator sessions give participants an incredible awareness of how their actions made on a daily, weekly and annual basis can impact the other two partners," agrees Woodard. For example, when they simulate a price change of concentrate from PepsiCo North America on the computer and click ‘submit,’ they learn immediately what happens to the price of a can for both bottlers and retailers, he says. Learners also can experiment with trade promotions and other marketing initiatives and determine their precise impact on the parties.

Woodard believes the simulation’s real world implications complement the Learning Map exercise perfectly. "It’s amazing to see the impact on individuals including 25-year veterans," says Woodard, who claims several hundred PCNA sales representatives and category managers have taken the course. PepsiCo is in the process of measuring the learning module’s return on investment (ROI), which he predicts "will be substantial."

The course took four months to develop, and included participation by Woodard and other PepsiCo executives to ensure accuracy and viability. It was rolled out to the sales team April 2004.

Woodard is so impressed with Root’s techniques that he and Wajskol have volunteered to explain the learning module during a session at ASTD’s TechKnowledgeâ 2005 in Las Vegas. Pepsi Cola North America’s Sales Training and Development organization is also planning to employ e-simulation in a leadership development program currently in development and expects to use it in other sales training initiatives, says Woodard.

Publsihed: January 2005