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 / Autumn 2013 / Issue 72(originally published by Booz & Company)


Life in the Matrix

As PMF president Pedro Padierna tells the story, it began in 2010 with the merger of two major food producers in Mexico, both of which had been acquired by PepsiCo years before. Gamesa, Mexico’s largest cookie manufacturer, was based in Monterrey. Sabritas, a snack company headquartered in Mexico City, was the source in that country for the Frito-Lay global brands and its own local brands, such as Sabritas chips. The merger was intended to further strengthen PepsiCo’s position in Mexico, but it also brought together two very different companies. It would take a high level of engagement to align them.

Padierna, who became president of the combined enterprise in 2011 (he had formerly been president of Sabritas), viewed this cultural challenge as being at least as significant as the strategic and operating challenges he faced. As he described it to us, “The two [legacy] companies could not have been more different” in how they approached the market and how they ran their operations. Sabritas was direct and functionally oriented, and Gamesa was collaborative and process oriented. Sabritas prized the individual as heroic, able to solve any problem, whereas Gamesa believed that teamwork created results and passion for the work. What was important to Padierna, however, was that they were both successful companies, and their cultures were individually thriving. The key to success was the recognition that Gamesa and Sabritas were coming together not in a takeover, or owing to the failure of one company, but rather, as he stated, “as a merger of equals.”

It was thus important to signal that the merger would not result in the transformation of one company or the absorption of one company into the other; rather, PepsiCo Mexico Foods intended to obtain the very best of each company. Padierna began by assuring employees that as redundant positions needed to be eliminated, leaders would choose the people they kept “based on merit. It’s not going to be a quota system, taking one from here and one from there.” Although some people were skeptical the merger would truly unfold this way (as he expected they would be), after several months they began to believe that Padierna’s intentions for a new, hybrid company were sincere.

Blending Two Rivers

Another essential step was to find a new image for everyone to share, to help employees come together as a new company. As Padierna explained, “One of my early decisions was to move away from the former dual company images and adopt one PepsiCo Mexico Foods image. All of us who were driving the transformation, from that moment on, simply forgot about our past. We emphasized behaviors that demonstrated that we belonged now to a new company: PMF.”

The logo of the new company helped express this idea. “We created a powerful image of two rivers coming together to form a new river. We used the image of the Amazon River, which is actually formed by two rivers: the Madeira and the Rio Negro.” One compelling part of the story is the way the two originating rivers blend. “Because of the way they drain from the mountains, their waters are different colors. One is black and one is brown. Once they come together, for the first 100 miles they don’t mix. The Amazon runs with one side one color, the other side the other color. Then they mix, to become one river that really drives the ecosystem of the world. I believed the same thing would happen here. Our two cultural situations would not mix at first, but then they would become one.”

The image of the Amazon became a simple, accessible symbol of the new PMF. Each employee could identify him- or herself as a drop of water in the united river, contributing to a single enterprise. This idea helped capture everybody’s imagination, in ways that launched critical behavior changes—including among many of PMF’s 40,000 frontline employees.

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