Abstract. A restructuring along the lines of the McKinsey span-of-control model would permit the organisation to eliminate managerial layers without reference to any single function. The principal requirement is that every leader directly manage no fewer than five reports. Leaders falling below this threshold, typically those managing two or three people, are expected to be removed, with their territories and teams absorbed into adjacent units and the associated headcount consolidated. The effects described herein are not confined to one function; they extend across Research and Development, Sciene and Technology, Key Account Management, Human Resources, and the Frito-Lay field organisation. The scheme is expected to proceed in stages, though the sequence and timing remain undisclosed.
Introduction
The governing principle is simple. Any leader who does not manage five direct reports should expect their role to be discontinued. Territories and teams led by individuals with two or three reports will be absorbed, and the resulting heads redistributed accordingly.Research and Development; Sales and Trade
Managers and Directors across both R&D and S&T fall within scope. The consequences in these functions are expected to be severe.Area Sales Managers (Beverage)
A considerable number of exceptions were granted during the previous round. It is not anticipated that this leniency will recur. An ASM with two or three direct reports should regard their position as at risk, with those reports transferred to a neighbouring ASM.Key Account Management
Beverage KAMs are to be merged with their Frito-Lay counterparts, such that two roles become one. The depth of this consolidation is not yet known, and it may not be completed within the first year. Nothing, however, should be regarded as beyond possibility.Directors and Senior Directors of Region
A DOR or Senior DOR must carry a headcount of five or more; otherwise the span is to be merged. Major account responsibilities may be treated as exceptions, though any such role should expect to assume Frito-Lay accountability in addition.Human Resources
The function is expected to be largely withdrawn. The organisation’s preference for a self-service kiosk model is well established. The prevailing view at the most senior levels is that HR contributes little value and generates a disproportionate share of problems.Frito-Lay
This function may bear the greatest impact. Zone Directors, KAMs and TSMs are each expected to be substantially reduced. The beverage operating model appears to be regarded as the superior of the two.Delivery and Merchandising
It is reasonable to expect these functions eventually to converge into one, and subsequently to combine across Frito-Lay and Pepsi. No timetable has been indicated, though the logic is evident.Sales Representatives
The sales representative role is expected to be eliminated. The justification is observable by anyone willing to look: visit five stores at random on the journey home and assess what the Pepsi and Frito-Lay representatives have accomplished of their own accord. In a great many cases, the answer is very little. Execution of even a sold-in priority can no longer be relied upon.Divestiture of Low-Profit Territory
Territories of low profitability are expected to be sold to bottlers. The timing is unknown; however, Ramon referenced this on the earnings call, which indicates it is under active consideration.Direct Store Delivery
The future of DSD itself is likely under review. Every facet of the future business model should be considered open to change.Conclusion
We have described a restructuring in which span of control serves as the primary instrument of consolidation. Functions are merged where overlap exists, roles are removed where contribution is doubted, and territories are divested where returns are insufficient. The process is incremental, and its full extent is not yet visible. Those affected would do well to prepare accordingly.
May the odds forever be in your favour.
This is speculative conjecture generated from Rumors via this site, Reddit and Earnings commentary.