By Alan Murray and David Meyer
October 12, 2018

Good morning.

“Design is just changing a product to do a better job.”

So said Pepsi’s Indra Nooyi last night, in explaining how she and Chief Design Officer Mauro Porcini used design thinking to change the culture at Pepsi. Nooyi, who stepped down as CEO just 10 days ago, and Porcini were guests at a Brainstorm Design dinner in New York, hosted by Wallpaper, Time and Fortune (WTF, for short).

Nooyi said after she became CEO in 2006, she quickly concluded “our products tasted great, but on the shelf they didn’t look inviting.” So she hired Porcini, who had been at 3M, to bring change. Since then, he has steadily expanded the design staff he oversees to encompass not just packaging, but the entire customer experience. “Packaging is a very small part of the story,” Nooyi said.

Porcini said that many people in the company were initially resistant to the design approach, having been trained as managers to focus on efficiency. “Design is inefficient by definition,” he said. “Innovation is inefficient by definition.”

But over time, the design approach has embedded itself in the Pepsi culture, influencing far flung things like the way the company introduces new products to retailers, or the experience it creates at the Super Bowl each year.

Asked how many big companies truly understand the power of design to create business value, Nooyi said: “If it’s 15%, I’d be shocked.” Porcini is convinced the percentage will grow over time, as companies come to understand that using design principles to recreate their products and services can help defend them against the threat of disruption.

Still don’t get the value of design thinking in creating great companies? Then you may want to consider attending our Brainstorm Design event in Singapore next March 5-7. Details here.

Have a great weekend. More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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