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An unlikely leadership factory is minting future female Fortune 500 CEOs

December 5, 2022, 1:18 PM UTC
Lauren Hobart, Beth Ford and Mary Dillon—three alumnae of PepsiCo who became Fortune 500 CEOs.
All courtesy of companies

Good morning, Broadsheet readers! Today’s guest essay comes from Fortune senior writer Phil Wahba, who examines how PepsiCo became a ‘CEO factory’ that propels execs to the top of corporate America. Plus: Iran considers abolishing its morality police and Jane Fonda is protesting again. Have a productive Monday.

– CEO factory. What do Dick’s Sporting Goods’s Lauren Hobart, Hershey’s Michele Buck, Land O’Lakes’s Beth Ford, and Foot Locker’s Mary Dillon all have in common? In addition to being four of the 46 women CEOs in the Fortune 500, they also spent a significant portion of their careers at food and beverage conglomerate PepsiCo, where they honed the skills that got them to the corner office.

PepsiCo is considered one of the most successful “academy companies,” corporations that have a rigorous, highly refined leadership development program that makes them veritable CEO factories. Only consulting firm McKinsey and fading industrial giant General Electric have produced more of today’s Fortune 500 CEOs than PepsiCo’s total 16. (Male PepsiCo alums currently leading Fortune 500 companies include the CEOs of Target, McDonald’s, Albertsons, and Delta Air Lines.)

In a new feature for the December/January issue of Fortune, I dive into how PepsiCo has turned so many executives into the leaders of today’s corporate America. When a promising manager starts to garner notice at PepsiCo, earning the untold status of “hi-po” or hi-potential person, she or he gains access to training programs, stretch assignments in other divisions or international markets, and even a P&L, all benchmarks for rising in the ranks and eventually landing in C-suite jobs. “Hi-pos” have included former PepsiCo CEO Indra Nooyi, who led the company between 2006 and 2018.

Lauren Hobart, Beth Ford and Mary Dillon—three alumnae of PepsiCo who became Fortune 500 CEOs.
All courtesy of companies

Forty-three percent of PepsiCo managers are female. Not everyone ends up in the C-suite, of course, but the formal structure has made it easier for PepsiCo to identify and nurture female talent in its ranks. What’s more, alums have praised PepsiCo for providing room for failure that helps a rising star make a name for herself. “PepsiCo gave me the space to fail and gave me the resources and support to dust myself off and find solutions to these challenges,” Pernod Ricard North America CEO Ann Mukherjee, another PepsiCo alum, told me.

PepsiCo’s system makes it clear what’s needed to ascend to its upper echelons. Contrast that to the opacity that commonly disadvantages women elsewhere. “At most companies, it’s a black box,” said Jane Stevenson, global leader for the CEO succession practice at consulting firm Korn Ferry. “How do you become CEO? How do you get to the C-suite? You’re on your own to figure that out.”

With so many PepsiCo alumni mimicking the company’s leadership development programs at the corporations they end up running, the playing field for women could be leveled at organizations beyond the drinks and snacks giant.

Read my full feature here.

Phil Wahba

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- Abolished or not? News outlets reported yesterday, based on comments from Iran's attorney general, that Iran had abolished its morality police, a target of the women's rights protests of the past several weeks. State media later questioned the news, though local reports have confirmed that the country is reviewing its mandatory hijab law. CNN

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- Rats don't run this city. Jessica Tisch is New York City's new sanitation commissioner. She started off her tenure by creating a viral TikTok audio clip, in which she promised that "the rats don't run this city, we do." Now she's working on fulfilling that pledge. New York Times

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