Retain talent, but develop it, Pepsi Bottling chief says

Executives of Pepsi Bottling Group pbg rarely leave the company.

The top nine have an average tenure of 18.4 years. Its next 17 average 21.7 years, and its 1,800 field executives average 14 years. Pepsi Bottling is among the largest 200 U.S. corporations, and CEO Eric Foss joined as a campus hire 25 years ago. Foss, 49, spoke to USA TODAY corporate management reporter Del Jones about the secret of talent retention. Following are excerpts, edited for clarity and space.

Q: Ambitious executives probably don't like that you may be CEO for another 15 years. How do you keep them from jumping ship because you're so young?

A: The key is stretch assignments. Give them a lot of profit-and-loss responsibility, and show them that you care. If you do that, then most of your great people are going to stay.

Q: Might you be erroneously proud of the long tenure? Maybe what you really have is a cushy job-for-life program?

A: We definitely do not offer one job for life. New ideas and fresh thinking are critical, but it is a mistake to equate long tenure with stale thinking. Some of the most innovative minds happen to be the most tenured minds. We don't believe that longevity breeds success. Retain talent, but never lose sight of developing talent.

Q: Companies such as General Electric and Baxter International have trained many who left to become CEOs at other companies. They say they're proud of that. Should they be embarrassed for not retaining top talent?

A: When a company invests in leadership development, it's not their motivation to prepare executives for bigger jobs elsewhere. But any company that really wants to be great at leadership development is going to be a vulnerable recruiting ground. It's one of the prices you pay.

Q: What does Pepsi Bottling learn from exit interviews?

A: That people leave mostly because they feel underappreciated. A culture of recognition needs to be a part of the company DNA.

Q: What can a company do when a top executive is offered another job and a matching raise is not in the budget?

A: It takes more than money to make people passionate or loyal. I urge people to look at the total picture. Is the culture a fit? What are the long-term career opportunities? You have to think holistically before changing companies.

Q: In 25 years, you must have answered a call or two from headhunters offering big money and bigger titles.

A: Early in my career, I may have thought a few extra dollars were important, but I was able to get good counsel and made the right decision.

Q: Other executives also say no to headhunters — until they finally say yes. What changes their minds?

A: I don't worry about that. I wake up every day caring about the 70,000 people who stay.

Q: The compensation of the top five executives is disclosed in the proxy. Doesn't that create friction when one executive becomes jealous that someone else is paid more?

A: Appreciation is multidimensional. People want to be respected, but the folks listed work in a variety of capacities, and their pay structure is going to be different. Most executives are mature enough to recognize that's the reality.

Q: What can you do with a talented executive who does not get along with others?

A: Understand that everyone brings their own unique personality. Try to make sure the entire team has a shared set of characteristics: courage, the willingness to take risks, confidence. They must be effective as coach and motivator. These far exceed differences that exist, and people work well together as a result. You need rules of the road. One rule is to respect each other. We expect all of our leaders to embrace those rules.

Q: How contentious should you let a meeting become before it gets out of hand?

A: Everybody can think differently as long as they're respectful. The minute they cross the line, someone has to intervene and make sure everybody is playing by the rules. Encourage people to have a point of view, and make sure they feel comfortable expressing it. If everyone's thinking alike, then someone's not thinking.

Q: What if one of your top lieutenants gets too comfortable, too lethargic?

A: Constantly raise the bar and set objectives. There's got to be nowhere to hide. If that isn't a good fit, employees self-select out, so we haven't had much of an issue with anyone becoming lethargic.

Q: When hiring, how can you tell which bright applicants will stay with the company for the long haul and which ones will soon find the grass greener?

A: It starts with an unwavering set of hiring standards. Don't hire role players. Ask: Is this somebody with high growth potential and who can make a long-term contribution? Most companies don't exercise patience during the hiring process. There is no development system that is going to compensate for making a bad hire.

Q:HR Magazinefound that 95% of exiting employees blamed an ineffective manager. Is this also true at the upper levels?

A: Yeah. If a person doesn't like who they work for, it's going to be very difficult to achieve full potential and build a career. Great bosses are the accelerator of high-potential employees. Bad bosses are the biggest decelerator. Bosses should be great coaches and motivators. I like our leaders to have a teachable point of view and share that point of view.

Q: When a high-level executive leaves, is that a sign of an ineffective CEO?

A: Well, not on an isolated basis. A single departure is not indicative, but if you saw a pattern, that's probably something of concern.