PepsiCo’s Mauro Porcini is a design evangelist. His recently published book, The Human Side of Innovation: The Power of People in Love with People (Berrett-Koehler Publishers, November 2022), describes the power of design to drive sustainable and inclusive growth by unleashing people’s natural innovative tendencies. In talking with McKinsey innovation expert Erik Roth, Porcini shares how he views human-centered design, and the cultural change necessary across an organization to refocus everything on creating “something extraordinary” that meets the needs and wants of people sincerely and authentically. This is an edited transcript of their discussion. You can listen to the full episode on your preferred podcast platform.
Erik Roth, McKinsey: Mauro, I’d like to start with a topic near and dear to your heart: unicorns. In your book, you use this term to refer to people who help catalyze innovation. Tell us about that.
Mauro Porcini, PepsiCo: The people I call “unicorns” are the ideal innovators, entrepreneurs, designers, and marketers of the world. They are the people who really want to change the game. They’re disruptors. I call them “people in love with people.” They care about creating something extraordinary for other people—customers, consumers, the target audience. Essentially these individuals have 23 different characteristics. To have all of them is impossible, but that’s the idea: to be clear about those superpowers, those traits, those gifts that make the difference, not only in your professional life and the value you build for your business, but also in your private life. The two dimensions are connected. Once you have that awareness, you want to spend your life invested in those characteristics.
Some are more obvious than others—for instance, the ability to think big, to dream. We’re all born with that ability. As children we dream until somebody tells us that dreaming is childish. But we keep dreaming. We go to these companies, and we think we can change them—the products, the brands, the services, the business, the industry.
Then at a certain point, once again, people tell us, “That’s so childish. Be more concrete, more pragmatic.” They sometimes even say, “Why are you so arrogant to think you can change this industry, this company? We’ve been doing this for so many years.” So at a certain point, dreamers start to think that dreaming is wrong.
But some of us keep dreaming. The problem is, dreaming is not enough. If you just live in the comfort zone of dreaming, nothing happens. Unicorns know how to balance the ability to dream with the ability to make things happen, with the pragmatism, with the ability to make compromises and trade-offs, and with the understanding that those compromises and trade-offs are not something negative, they’re just a step toward the dream.
You need to start with a vision, a big strategy, and a belief that you can really change things. Then you need to make things happen.
Erik Roth: I really like the distinction between innovating for consumers, and this authenticity and humanity. You say, “A consumer isn’t a real thing. A real thing is a user. It’s a customer. It’s a person at the end of the day.” Why is it so important to put the human back in innovation?
Mauro Porcini: This is a good question, because for a long time it was not really necessary. When you build a new company, when you create something new, a new product, an invention, a new brand, it needs to be relevant to people. Therefore, most of the time you start with focusing on the needs, wants, frustrations, and dreams of these people. You create something that didn’t exist before, that is meaningful for them. But what happens over time—and often through competition and the dynamic balance you build within that industry—those products, those services, those solutions, are not extraordinary anymore, or relevant to people, or meaningful.
Things change. Society changes. But if you build that dynamic balance within that industry, you as a company don’t need, for many years, extraordinary products to win. They teach you this in business school. You have different levers. The product is one, but you have distribution, you have promotion. You have so many levers to win in the market.
Today the situation is very different. Those big barriers to entry—scale of production, communication, and distribution—are crumbling due to globalization, new technologies, the digitization of the world. Essentially everybody can come up with an idea, get access to funding, and go and compete with big brands or products. So the big and the small are forced to do one thing: refocus everything on those needs and wants of people sincerely, authentically. It’s not about doing it on one project; this is about the entire culture of the organization.
You need people in design, in marketing, in R&D, in strategy, in finance thinking 24/7, “How can I create something extraordinary for people? And how can I get profit out of it? How can I build a business value out of it?” This is the opposite of, “How can I build business value? Let me see, what are the levers?” It’s a completely different kind of culture in these companies.
I talk so much about kindness because it’s a strength in today’s hypercompetitive world. You need synergy, working together, and trust, to increase the efficiency of your team.
Erik Roth: How do you embed your version of design into a company? Because I think many companies have tried to put human-centered design back in the middle of innovation. Where it has taken off, there are some good examples of success. And even where it is successful, scaling it and sustaining it are real challenges. How do you start? How do you embed it? If you can scale that competency throughout a large enterprise, then the innovation flywheel should be even more successful.
Mauro Porcini: At PepsiCo, I went through different phases to build this new culture that could be applied to design, and anything else you’re trying to build in the organization. During the interview process more than ten years ago, when I met then-CEO Indra Nooyi for the first time, this is what we discussed. We didn’t talk about designing good products; we talked about designing culture and changing the culture of the organization.
Of the phases, the first is denial. Essentially the company is thinking, “I don’t need this new culture. I don’t need design thinking.” People want to protect the status quo. It’s human nature. Then at a certain point, somebody at the top, ideally the CEO, decides you need to change something.
Going back 20 years, 3M hired me at age 27 to manage design in the consumer business, one of the six businesses of the company, in Europe. I started to meet all these leaders in R&D, marketing, strategy. And I started to pitch the idea of design thinking to grow the business and drive innovation in the company.
The meetings were going so well, and I thought, “Wow, it’s going to be so much easier than what I was thinking.” I said to the executive vice president of the consumer business, Dr. Moe Nozari, “These meetings are going very well, and design is getting so much traction, and I think we can really change things very quickly.”
Moe Nozari looks at me and says, “They’re all lying to you.” I say, “But Moe, I was in the room. I tell you, they were really convinced.” Then he goes on, “No, I’m telling you, they’re all lying to you.” And then he goes on to explain that the people who seemed to be on board with my ideas were also equally accepting of other early-stage initiatives—the next HR investment or the next technology investment.
Later on, the second phase of my journey was the hidden rejection. People were rejecting me, but I was not aware of it. This is very typical when you try to change culture in any kind of organization. I learned something at that moment that changed the trajectory of my professional journey in these companies: every time I pitch an idea, I ask the person I’m with to make what they call a sacrifice, a commitment. Usually it’s money, the investment—give me people, give me the money to start the project. Nine of ten people drop out at this point. And this is great. I need to understand who the people are who make up the 10 percent of the population that is willing to try new things.
Erik Roth: I see this a lot in my work. If you say, “Hey, does everyone want to be innovative?” rarely do people say no. Instead, they nod their heads: yes, they want to be innovative. But when you ask how much time, people, and money they’re willing to commit to it, the dropouts are plentiful.
Mauro Porcini: Essentially you synthesized something we should all be obsessed with: alignment and commitment. Every time you pitch something, you need that commitment. Look at the curve of adoption of new products in the market. We know that, on average, 2 percent or 3 percent of people out there are willing to buy or use a new product at the beginning. The early innovators come immediately after—at around 9 percent. Everybody else follows in this bell curve we’re all familiar with. The same applies to culture. We know that, on average, 11 percent of people will be willing to embrace what you’re trying to do.
If you are trying to change things and you have tons of people in the room who don’t get it, it’s OK, it’s fine. It’s actually normal. If you have too many people with you, it means you are not changing anything. Hunt for that 11 percent. I call those people the co-conspirators. This is what you do in the third phase, what I call the occasional leap of faith, when some co-conspirators inside the company decide to take a chance on this new culture.
When I joined PepsiCo, I partnered with HR to map these co-conspirators inside the company. We had two axes. On one we put all these projects where I could show value with design quickly. It didn’t need to be perfect. We needed to show that the new culture was building some form of advantage. On the other axis, we put the co-conspirators on all those projects. We prioritized the projects with the right co-conspirators and where we could show value very quickly. We tried to prioritize a few projects, not a laundry list, knowing that a variety of them, no matter if they had a high probability of success and the right co-conspirators, were going to fail anyway.
With these, you build what I call the proof points, showing value as fast as possible. Speed is key. The more proof points, the more people will arrive, the more they will ask you to repeat the success. And I say, “OK, I need commitment. I need the money.” And then you scale it up.
Erik Roth: Do co-conspirators need to be leaders with P&L responsibility who can dictate resources? Or can they be anybody?
Mauro Porcini: It doesn’t need to be the CEO of the business or the person with P&L responsibility, but they need to have responsibility for the brands or the product category you’re working on, and they need to control access to the market. I saw so many organizations working on these wonderful strategies without having the access to market. At 3M we had a beautiful perspective: the science perspective. Scientists know very well that a great idea is just an invention. Innovation is to take that great idea through experimentation and all the roadblocks and complexity of life, all the way to market and be successful with that. Because you need the market access.
Erik Roth: Sometimes what’s being developed has no chance of getting to a customer because either there is no route to market, or the new thing gets deprioritized in the salespeople’s hands. You were inside two very successful, innovative organizations. How do you spot that as a weak point for others? More importantly, what do you do about it?
Mauro Porcini: The way we have been building design at PepsiCo, from zero people essentially ten years ago to 350 people in 15 design centers around the world, is to have a good balance between working on incremental value and incremental innovation. For example, I’m working on all these brands, so we’re looking to create value in a cross-functional team. That is the very nature of design thinking. It’s design, it’s marketing, it’s R&D, strategies, insights. Creating value in all the dimensions of the product, from something very basic like bringing the idea of limited-edition packaging, or building unexpected experiences in the world of licensing, changing the way you build brands for established brands.
With that, you build credibility; you have a reason to exist. You create a very tangible, concrete financial value for the company that we measure and share with the organization. You also create very tangible results visually. And I heavily share them through books we publish, through our Instagram channels, even personally through my LinkedIn channel.
Erik Roth: You’re talking about telling the stories to build buy-in.
Mauro Porcini: Yes, you keep promoting them. That gives you space to experiment, to do what is really changing the game, knowing that in that experimentation, in real, breakthrough innovation, you need a multiyear horizon. This is one of the problems of focusing on the short term. You have many leaders that rotate every two, three years, so the idea that they’re going to invest part of their budget in something that’s going to generate value for the next manager, it’s not that attractive.
So we need to rethink the way we reward these leaders and connect them to long-term innovation. On top of that, the way we’re making it work is by building the right culture and having the right people who are in love with that idea and are grateful to work in a company the size of PepsiCo, with the billions of people we reach every day.
We see that as a blessing. We think, “We’re going to leverage this platform beyond the company.” Because we want to create impact in the industry. That’s why I talk about unicorns and culture, because yes, you can build all kinds of tools and KPIs and incentive systems of the world to push people to work in that way.
But at the end of the day, the first thing is the drive you get from within, from your stomach, from your heart. The second is understanding how to build a vision and then how to incrementally prototype and try it, but always keeping in mind how you’re going to scale it up.
What makes a high-performing innovation team is a diversity of perspectives and experiences, but in a psychologically safe space so that team members can actually share openly, come up with a common vocabulary, and look at the problem through very different lenses.
Erik Roth: How do you identify the ideas to commit to when you’ve got a large number of dreaming ideas?
Mauro Porcini: We apply the three field tests of design thinking to every function of the company. The first is desirability, people, and human beings—what they want. The second is visibility: the technology of and applied to your product, plus process and manufacturing. Does it make sense for my company? Can I scale it up? The third lens is the business lens, the viability. Do I have the right branding? Do I have the right business model, the right distribution channel, and so on? There is also a fourth lens, that of culture, that is not traditional in the design thinking methodology, but is what I talk about in the book.
Putting that all together, from a business point, does the idea you have make sense for your company? In the case of a company like PepsiCo, do we have the right distribution channel, for instance? If we don’t, my project is no longer just designing the drink, it’s understanding if I can, as a company, redesign my distribution channel. Then comes technology. If I need premium packaging, do we have the ability to create premium packaging with our manufacturing capabilities at the right cost, with the right profitability?
Then there’s culture. Do I have the right sales organization with the right culture to sell premium-ness if everything I’ve been selling for years has been accessible products with completely different kinds of sales stories? Does management have the right culture? If they don’t, it doesn’t mean I shouldn’t do that project. It means that project is a cultural project, on top of being a product, technology, and business model project. I need to understand how to retrain my sales organization, how to insert different kinds of people to change the culture, and how to drive that. It’s an HR project as well.
Erik Roth: What you’re touching on is so important. What makes a high-performing innovation team—and you just defined it—is a diversity of perspectives and experiences, but in a psychologically safe space so that team members can actually share openly, come up with a common vocabulary, and look at the problem through very different lenses. If you can accomplish that at scale in an organization, that is the best.
Switching gears a little now, is it possible to do this well with limited resources and staffing?
Mauro Porcini: Often a lot of resources and big scale are a constraint to innovative thinking—you have a model that works well at scale, so why change it? Resources are not a key variable to applying this kind of thinking. Essentially, the methodologies I describe focus completely on understanding people.
When I talk to people, I’m going to have my biases, my background, my unique point of view. That is going to give me some blind spots. So I have my colleague, with a different kind of background, talk to the same people. They will hear something different than I do. Then we’re going to talk to each other and put together these collective insights and know how to come up with what the idea could be to solve that specific need in that sector.
Erik Roth: Of the characteristics you talk about, which are intrinsic versus those that can be supported and encouraged and developed?
Mauro Porcini: First of all, this is not me saying this; it’s basic human science. We have all those characteristics in ourselves potentially when we are born. Some of us have some more developed than others. This is human nature.
Let’s say you’re really good at playing soccer. But if you don’t train, if you don’t practice, you’re not going to become what Maradona became, or Ronaldo, or whatever you like, or whatever sport you prefer. It is partially natural and partially you need to build awareness of the skill.
It’s the same thing: understanding what those key characteristics are that make the difference. For instance, I talk so much about kindness because in society and companies they tell us that kindness is vulnerability. It’s a weakness. It’s not good. But I say, “No, it’s a strength in today’s hypercompetitive, hyperefficient world.” You didn’t need that 20 years ago, but today you need synergy, working together, trust, to increase the efficiency of your team.
Erik Roth: When it comes to intrinsic versus coaching and hiring, often there’s a tendency to go find the perfect person and get a lot of them, and then pepper them through an organization. It can work in little pockets, but it’s very hard to scale individuals, no matter how many of them you have.
You can actually create these intrinsic capabilities with high-performing teams, the right innovation delivery system, which includes design as a core component, and putting the right governance and resource allocation approach around it.
Mauro Porcini: Team triumphs individuals. This is key. You want to have a unicorn culture eventually, but the team is more important. This implies that probably we need to redefine high-performing individuals.
What is a high-performing individual? This is what the unicorn idea does. A high-performing individual is not just the one who achieves business results. Unfortunately, too many times that’s the key criteria, the ability to perform and deliver results.
But the how is very important. Unicorns know how to work together. They know how to respect, and express kindness and empathy. Those are characteristics that are all about working together. This idea of people in love with people, the subtitle of the book, that ties together everything we have been talking about today. It is love in three dimensions.
It is love for the people we serve—this passion to create something extraordinary for them, that’s the priority. It is love for the people around us, what we are discussing right now, bringing others with you. You are not a high-performing individual if you don’t have these traits in you.
Then finally it’s love for what you do. It’s the passion, it’s what drives you to go against any kind of roadblock or difficulty. You don’t care about incentives of the company and the tools they give you, and the KPIs to measure you, because you’re driven by the passion to do the right thing and change the world.