Mehmood Khan, PepsiCo vice chairman and chief scientific officer, global research and development
Landon Lecture
April 25, 2016
Choose Both
Thank you to Provost Mason and everyone at Kansas State University for your kind invitation and warm welcome. It is an honor to be here today and to join the ranks of those who have come before me in delivering this lecture over the past 50 years.
Before we get started, there's a misperception I'd like to clear up.
It's about my work at PepsiCo. When I was introduced, you might have been given the impression that at PepsiCo. we make foods and beverages.
It's reasonable you should have reached that conclusion.
After all, we make snacks down in Texas … we blend Naked Juice out in California … we mill Quaker Oats here in the Midwest … and we bottle and can Diet Pepsi up in New York and around the world.
You've also seen our trucks on highways and on grocery store docks, unloading our products and stocking them on store shelves.
In fact, worldwide, we make and sell nearly 3,000 different food and beverage products.
I'm not disputing we make foods and beverages.
But I want you to understand that making foods and beverages is just a detail.
Let me be clear: It is a very, very, very important detail.
But it's just a detail.
Manufacturing, shipping and selling PepsiCo. products — that's the easy part.
We've been doing it for a very long time and — if you'll forgive my immodesty — we've gotten quite good at it.
What we really do at PepsiCo. is make choices.
Thousands of them. Every day.
Choices that determine what people will eat. And how much they'll have to pay for their food. Choices about where to source our ingredients … or not source them. Choices about whom to hire or promote … or pass over.
And let me tell you, consistently making the smart choice … the fair choice …the right choice … is a lot harder than making a bag of potato chips.
I share this story with you today because all of you are in the business of making choices, too.
And now more than ever, current and future leaders are being presented with choices — hard choices. Choices that we'll either get right or get wrong.
Because we're now operating in a world where new technologies are forcing us to make choices that sometimes place progress and fairness into conflict.
Which is why I want to challenge us today to start thinking differently about the way we approach our work … and about the intended and unintended consequences of our choices.
It is also why I also want to thankall of you — the faculty, staff, students and friends of K State — for giving me the privilege to stand before you to share my views and join the roster of distinguished speakers who precede me as Landon Lecturers. (Six former U.S. presidents, world leaders, Supreme Court justices, CEOs and many other prominent figures.)
Food/Environmental Sustainability
One of the biggest challenges we face today is how to feed an expanding global population.
And this isn't just a problem that impacts the AG majors in the room and people who work in the F&B industry —it's a problem that impacts every person on the planet.
In the richest parts of the world, too many people eat too much … and in the poorest parts of the world, too many people don't have enough to eat. That gap is about to widen.
Consider this: The global population will expand from 7 billion to 9.5 billion people by 2050. Let me underscore this last part: We're talking about an additional 2.5 billion mouths to feed in just 35 years.This will occur in the lifetime of most of the people in this room.
At the same time: Over that same 35-year period, food availability and prices will become more volatile. Shortages in water, energy, and land will impact how people will eat — or not eat.
The path we are on is not sustainable. We have some hard choices to make.
For example, should we continue to invest in potato and corn production on a global scale? Or should we migrate to alternative crops that might be gentler on the land or require less water to thrive? At my company, there are literally dozens of choices like this we're confronted with daily.
And then there are the even harder choices.
If 25 or 35 years from now poverty is increasing, how do we fairly price our foods and beverages and make safe, healthy food available to all? And here is a horrible choice I hope we never have to make: If demand for food is higher than supply 25 or 35 years from now, who gets fed and who does not?
Social/Economic Sustainability
When it comes to the choices we face, I'm not just talking about the path to sustainable food production, but ensuring sustainable societies, too.
Of the 7 billion people who inhabit the earth today, most of them — about 90 percent — are being left behind.
If we want to help them catch up, we're going to have to make some hard choices about technology.
I'm a scientist. I get as excited as anyone in this room when new technologies emerge. Like many of you, two of my favorite words in the English language are "disruptive technology."
But we have a responsibility to consider the unintended consequences of technological disruption, which can decimate livelihoods and displace people.
Let me tell you what I mean.
For you students in the room, I invite you to join me on a college road trip back in time.
- When I was a student back in the late 1970s, in Liverpool, England, I used to go to the local record store to buy albums made by the city's legendary hometown band — The Beatles.
- When I needed money to buy books for the new semester, I went to a bank around the corner from my dormitory and stood in line to cash a check.
- When I needed a taxi, I stood on the corner like everybody else and awaited the arrival of one of those iconic British black taxicabs.
Now fast forward …
- Today you can press an icon on your phone and a private car will arrive moments later at your doorstep.
- Today bank lobbies are empty because most people bank online.
- Today the record store no longer exists because music fans stream music direct from their phones.
All of this is welcome news for everybody in this room because technology makes our lives simpler.
But what happens to all those people — most of them under-skilled? The teenage clerk at the record store, the single mom who works as a bank teller, the third-generation taxi driver — and tens of millions more like them who have been displaced by technology?
Technology disrupts. And some people say the disrupted must learn new skills and adapt to the global economy.
This may be true, but increasingly, many people who have been disrupted are not adapting. Instead, they're responding to unprecedented levels of stress and anxiety by causing disruptions of their own. They are making themselves heard — even here in America.
Now imagine that you are an inhabitant of the Middle East or Africa where the challenges are exponentially larger; where technology either lags or has leap-frogged over the majority of the population; where there is chronic economic immobility and even retardation … where access to safe food and potable water is limited. They are making themselves heard, too — not only in their home countries, but across the world.
The path we're on is not politically, socially or economically sustainable.
We have some hard choices to make.
Ethical Sustainability
I sometimes worry that the path we're on is not "ethically sustainable" either.
With too much frequency we hear about business crises — from oil spills, to E.coli breakouts, to economic meltdowns.
In the aftermath of business scandals, after the autopsies have been performed by the news media, regulators, commentators and lawyers, we often discover that these crisis situations were not acts of God or accidental mishaps, but were acts of greed or hubris.
Somebody got cute … and then they got caught.
In fact, in some industries today — not many, but some — executives actually perform cost-benefit analyses of obeying the law or breaking it. They bake the cost of product recalls or government fines into their business plans. And when their misdeeds are made public, instead of owning responsibility, they evade it.
The institutions and individuals who get themselves into these messes are often proudly — almost belligerently — mathematical in their thinking. They crunch the numbers. They run their risk models. They pride themselves on their analytics and obedience to data. They view almost any topic as a math problem to be solved.
But they don't recognize — or calculate — the impact of their actions.
Ethical lapses have created a crisis of confidence in many of our great public institutions. And not just our biggest companies. The public's confidence in academia — where I launched my career — may be greater than in business or Congress … but confidence in academic institutions has in recent years slipped too, according to pollsters.
And for similar reasons.
Every couple of years, it seems, there's a scandal in academia, whether it's related to plagiarism, or grant-making, or conducting scientific studies that do more to capture headlines or funding than advance common knowledge and understanding.
The erosion of public confidence in our great institutions is not sustainable. We have some hard choices to make.
But I am an optimist. I think we can choose wisely. In fact, many of us already are choosing wisely.
Painting on a Global Canvas
Today, as learning is shared and new technologies are exported globally, we are presented with the opportunity to paint on very big canvases.
A century ago, a student attending this university might have applied his learning on the family farm — perhaps a couple of hundred acres in Franklin or McPherson County. I can't imagine he gave much thought to how his work might impact people in Eastern Europe or Southeast Asia.
But today, the work men and women conduct here in research bioenergy, animal health, plant science, and food safety and security has implications worldwide. The same progress you bring to Franklin County can be shared with farmers in Thailand.
I marvel at how big our canvases have become. When I began my career as a physician, I treated individuals. Next I went to work for a drug company, where I treated populations. Today, I work for a company that provides more than 1 billion servings of food a day to people in more than 200 countries. My work impacts people across the globe.
It's a great privilege. But it is also a huge responsibility.
Nearly a decade ago, when I joined PepsiCo., we saw a growing consumer focus on health and wellness and rising environmental concerns in communities across the globe.
At the same time, we also looked out across a business landscape that operated under the false assumption that sustainability and profitability had to be an either/or choice.
Against that backdrop, we chose both. We resolved to embed sustainability into our business — and make sustainable business practices a growth engine for PepsiCo.
It was our premise then — as now — that sustainability and profitability not only can be — but must be — inextricably linked if a company expects to retain its license to operate.
What was a fairly novel idea back then has gained enormous traction a decade on. I am heartened to see that more individuals and institutions are beginning to choose this path, especially an emerging class of socially minded entrepreneurs.
A shift is underway: Not so long ago, companies made money any way they could, and made as much of it as they could. If there was money left over at the end of the fiscal year, after all the expenses were paid, many wrote a check to a charity.
But today, how you make your money is becoming as important as how much money you make.
But heading down the path of ethical sustainability presents a new set of choices.
I am a scientist. And many of you in the audience are either trained scientists or training to become one.
We scientists usually launch a scientific inquiry by asking a deceptively simple question: Can we?
At my company, those questions might look like …
- Can we take an iconic food product beloved by millions … and increase its nutrition credentials without compromising its flavor or good standing in the market?
- Can we improve sustainability on the farms where our raw ingredients are grown?
- Can we reduce our water consumption by 50 percent?
- Can we capture even bigger crop yields while using even less water and land?
Next, we ask the harder question: "How will we…?"
This is where the sleeves are rolled up. This is where the real science gets done: The computer modeling … the lab testing … the prototypes that fail, and fail again, and fail again, until you finally get it right.
For a food and beverage company, that translates into putting a new or improved product on the grocery shelf. For you, that might mean conducting experiments and publishing your results in an academic journal. For a member of Congress, that might mean shepherding a legislative proposal into law.
But there's a third question I'm increasingly asking. And encourage all of you to ask yourselves as well:
"Should we…?"
It's the hardest question of all. A question I was not trained to explore when I was a student.
As a scientist — a person trained to be deductive — I'm discovering that my job today is requiring I become a lot more inductive in my approach to problem-solving. I have to see around corners. I have to factor in the unintended consequences that scientific breakthroughs can generate. I have to figure out how to balance progress with fairness.
Increasingly, I'm requiring that the people who work for me do the same.
I have an R&D team of more than 2,000 people. Their job is to innovate, to make existing products better and invent new products.
On their best days, they invent entirely new food and beverage categories, as they have here in the U.S. and abroad in recent years.
They are under pressure to perform. I have given the team a huge innovation target — with huge dollar figures attached.
Not too long ago, during a brainstorm at PepsiCo., a new product idea was introduced by one of our R&D people.
It was a product that I'm certain would have benefited our bottom line. But I'm not so sure it would have delivered much benefit to the people we feed in more than 200 countries.
I wasn't in attendance at the brainstorm. But later I learned someone felt empowered to speak up and say, "Even though we have the technology to make this product, I don't think we should launch it."
Apparently a consensus soon emerged that it was simply not the right thing to do.
And without waiting for me to spike the product, which I would have, the team walked away from what promised to be a certain moneymaker — at least in the short term.
The idea never made it to my desk — only the story of how the idea was killed.
At the risk of being immodest for the second time today, this might be the greatest compliment I've received in my career.
For people like you and me who work in science and technology professions, we will be presented with more choices like these in the years ahead.
And that's influencing the way we choose our employees at PepsiCo.
I can tell you that inside my company, it is these scientists who transcend the purely quantitative, that we recruit, promote, and do everything within our power to retain.
In fact, it is my belief that the people who assume leadership positions in the science and technology industries, a generation from now, will be those who choose progress and fairness.
I'm convinced this fusion of skills will benefit not only the public scientists are expected to serve — but will also be good for their own career development.
Because hard science and technology skills are all perishable products with an average lifespan of about five years. That's right: Almost everything we know about how to grow corn today, or treat a tumor, will be obsolete in five years. All of us who work in the fields represented here today must keep updating and relearning our skills for the rest of our careers.
Science skills are just details. They are very, very, very important details — but details nonetheless.
That's why I believe our next-generation leaders are thinking and behaving in ways that fuse progress with fairness.
They remain deeply committed to the core tenets of science of course. They seek the answers to our most stubborn problems. They are innately curious. They relentlessly probe. They generate reams and reams of good, solid data. They develop steel-trap minds.
But they don't stop there. They see around corners. They bring creativity and compassion to their work. They use science and technology to connect the rich and poor … to help bring progress to the people who need it most … to help elevate the 90 percent of the world that is lagging behind.
They do both.
I've talked a lot this morning about the choices people who work in science and technology must confront. I could give us a hundred more to choose from. Instead, in closing, I'd like to present just one.
If there's one choice I'd encourage all of us here to make, it's this:
Instead of choosing either to become über-rational Mr. Spock or ultra-compassionate Mother Theresa, let us choose to become both.
When we do, we'll change the world for the better. I guarantee it.
Thank you.