So I picked my battles. An Interview with the Chairman and CEO of PepsiCo. How do we make sure that people who work for PepsiCo are able not just to make a living but also to have a life? Indra Nooyi, Former Chairman and CEO of PepsiCo. Read this post on Forbes >> THE END OF MANAGEMENT AS WE KNOW IT We did not want to cut back on all of our long-term investments. The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. I am spending a lot of time with lawmakers, presidents, prime ministers, commerce ministers, health ministers, and NGOs. They didn’t even say hello. But we cannot be guided purely by the earnings cycle, or we might end up adding costs to society. This is more than a job—it’s a calling. In fact, I’d say that it was reinforced by the downturn. I’d like that to be the way we do business. Indra Nooyi, Former Chairman and CEO of PepsiCo. Related Expertise: Our businesses in those markets need to tailor products, business models, and people practices to the local market. During this downturn, people realized that it’s even more important to focus on portfolio transformations and to be green, because being green actually saves you costs. As you reflect on the last couple of years, what have you learned that surprised you? The chairman and chief executive officer of PepsiCo explains how tomorrow’s leaders must develop a personal understanding of the markets and cultures in China, India, and other emerging markets. The couple has two daughters. Could you describe this idea? The second element is environmental sustainability. The first is human sustainability. “I … Fourth, you must become much more open-minded. I know that you have a life beyond PepsiCo, and I’m going to respect you for your entire life, not just treat you as Employee Number 4,567.”. First, we were very visible, doing as much walking around as possible. She also stresses the need for leaders to have direct personal understanding of the markets and cultures in China, India, and other growth spots. We have to make sure people understand that growth patterns will shift. Performance with purpose is what I’d like PepsiCo to stand for. We’ll come out of this okay.”, Second, we kept on trying to practice what I call realistic optimism. This is a very closely linked ecosystem. First, you have to focus on the long term. I went to consumers’ homes and visited with both younger and older people there, trying to understand how they live, what they think about products, and what we should be doing differently as a company. Some of its notable alumni include Pepsi CEO Indra Nooyi, Israeli Prime Minister Benjamin Netanyahu, and … Excerpts follow. The economy enabled us to hire great people and make investments with external companies at a much lower cost since there were fewer companies competing for those resources. Let’s just focus a little bit more on the last 18 months. We also must give people the opportunity to work in international markets if they’re so inclined and have the capability. It appears your browser does not support JavaScript or you have it disabled. I went to consumers’ homes and visited with both younger and older people there, trying to understand how they live, what they think about products, and what we should be doing differently as a company. Half of humanity lives east of the Middle East. So the question is, How do you still give the consumer in India a choice? The second element is environmental sustainability. Is that what happened in this situation? Purpose has three elements. Within PepsiCo, do you think that the importance of the global market is recognized? and values is more important than ever. All rights reserved. We can develop hundreds of new products, and stores have enough space for them. [Laughter.] Related Expertise: The economy enabled us to hire great people and make investments with external companies at a much lower cost since there were fewer companies competing for those resources. According to Forbes, she is consistently ranked among World's 100 Most Powerful Women. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. Excerpts follow. In a recent speech, you talked about five ways in which the role of the CEO will change. Indra Nooyi knows how hard life is for working moms. 58K likes. Be realistic, but don’t project doom and gloom. But the way people live east of the Middle East is vastly different from how they live in the rest of the world. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo … About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo embarked on a corporate mission—“performance with purpose”—meant to marry financial success and social responsibility. That’s the new reality. Governments have gotten more intrusive. Why did you do that and what did you learn? PepsiCo’s emphasis on environmental sustainability, for example, is more relevant than ever today, because going green can actually save money and, along with other acts of citizenship, attract and retain the talent needed to succeed in difficult times. Now let’s consider India, which has tiny stores. That’s when I realized that I had not told the parents of the executives who do such an extraordinary job for PepsiCo that they themselves did a great job bringing up their children. Western models cannot simply be applied to those markets because they differ culturally. I visited a school of traditional Chinese medicine to understand how the Chinese practice prevention and cure and how our products might play a role. Today’s young people do not want to be wedded to a job like the people of my generation were. I based these observations on my wandering around the world and leading our company. She is the current Chairman and Chief Executive Officer of PepsiCo, the second largest food & beverage business in the world (by net revenue). The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. 95 talking about this. People think there are many, but in reality, there are few. This summer, I spent two weeks in China. You talked about public-private partnerships. The downturn has reinforced all the elements of performance with purpose. The matrix looks at two dimensions: growth rate of the industry and market share. When all her guests came in, they ignored me. Although developed markets may not grow as fast as they have in the past, developing and emerging markets will grow faster. If we do not transform our portfolio, we cannot sustain performance. How can we introduce lots of new products there? Second, you need to understand that public-private partnerships are critical for companies to be successful. Not only do we have to learn the next leadership principle or the next management practice, but we also have to learn about technology and the younger generations. Nooyi herself spent two weeks in China last summer, making sure to get out of conference rooms and into the countryside and people’s homes. First, we were very visible, doing as much walking around as possible. But we cannot be guided purely by the earnings cycle, or we might end up adding costs to society. We launched a restructuring program in October 2008, and we made some fairly deep cuts to create some breathing room, because we wanted to keep reinvesting in the business through the downturn. We have enormous influence in the world. In a downturn, it’s even harder than usual to turn around a business because the rules are changing, the marketplace is changing, and the consumer value proposition is changing. Look at PepsiCo. How do we make sure that we provide products that range from treats to health foods and allow customers to make balanced, sensible choices? How do we make sure that we provide products that range from treats to health foods and allow customers to make balanced, sensible choices? We did not want to cut back on all of our long-term investments. You talked about needing to be open to cultures and customs. Indra K. Nooyi on Performance with Purpose. Third, we undertook brutal prioritization. I’ve been at PepsiCo for 15 years and became chairman and CEO about three years ago. Read More. How do you find the time when you’re running a company the size of PepsiCo? We can’t do it. First, you have to focus on the long term. She worked with Boston Consulting Group (BCG), Motorola and Asea Brown Boveri. Too many companies have not done right by their shareholders by focusing strictly on the short term. BCG was the pioneer in business strategy when it was founded in 1963. Fifth, you must develop emotional intelligence. The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. You cannot just swoop like a seagull into and out of a country or a city. The way that the CEO projects himself or herself on the organization sets the mood for the company. During this downturn, people realized that it’s even more important to focus on portfolio transformations and to be green, because being green actually saves you costs. In a conversation with Grant Freeland, senior partner and managing director of The Boston Consulting Group, Nooyi elaborates on her views about the changing nature of leadership. In periods of crisis, leaders can be tempted to take greater control and drive change from the top. Indra Nooyi has her unique charisma; her story between Michael D. White, chief executive officer of PepsiCo International and vice chairman of PepsiCo, is very popular in the company. CEOs have to become learning CEOs. In the developed markets, we work with large stores. We need to think about the needs of a country and the way people live and behave in that country. Is that what happened in this situation? Unless you focus on purpose, you cannot deliver performance. They didn’t even say hello. Indra Nooyi became PepsiCo's first female CEO in 2006, and she's also the company's first CEO who wasn't born in the US. I based these observations on my wandering around the world and leading our company. So the question is, How do you still give the consumer in India a choice? Sadly, this book is just tumbles down. Was performance with purpose challenged during this last 18 months as the economy worsened? People Strategy. First, you surround yourself with great people, who run the businesses. Then, you start traveling. This is more than a job—it’s a calling. Nooyi credited experiences early in her career as a strategy consultant with Boston Consulting Group (BCG) for teaching her inductive thinking that helped shape her leadership style. The third element is talent. Could you briefly describe your personal background and your professional background? You talk about thinking globally and acting locally. In the developed markets, we work with large stores. I have to go back and explain to you the origins of performance with purpose to explain why it was untouched by the events of the last 18 months. And as long as PepsiCo keeps doing well, people will be okay. Then, you start traveling. If we do not become greener than we are today, young people are not going to come to work for us. But the way people live east of the Middle East is vastly different from how they live in the rest of the world. We are likely entering a period of low growth. In a recent speech, you talked about five ways in which the role of the CEO will change. As a Western company, we at PepsiCo have to make doubly sure that we don’t just export a model and say, “Give it some local colors or local flavors.” We actually have to tell our people, “Develop a model in your country that’s right for your country.”. Greenwich Time. And the reason we’ll do okay is because of A, B, C, and D. And the good news is that we’re a consumer staple company, so we won’t be affected as much.”. We have a profound role to play in society, and we have to make sure that we are constructive members of society. While attending Yale School of Management, Nooyi completed her summer internship with Booz Allen Hamilton. You talk about thinking globally and acting locally. Governments have gotten more intrusive. And it unleashed emotions that were unbelievable, creating an emotional bond among the executives, their parents, and me. All rights reserved. Could you describe this idea? © Boston Consulting Group 2020. Could you elaborate on those five characteristics? We can’t do it. Half of humanity lives east of the Middle East. Let’s just focus a little bit more on the last 18 months. We have to make sure people understand that growth patterns will shift. If we do not become greener than we are today, young people are not going to come to work for us. January 14, 2010. PepsiCo’s emphasis on environmental sustainability, for example, is more relevant than ever today, because going green can actually save money and, along with other acts of citizenship, attract and retain the talent needed to succeed in difficult times. But I think it will take time for the rank and file to understand that international growth is a critical part of our future. Among the senior leadership, it is. Before my time at PepsiCo, I was at Asea Brown Boveri and Motorola, and before that, I cut my teeth at BCG. I kept saying to our employees, “The economy’s bad, unemployment is going up, but we’ll do okay. Indra Nooyi ranks 11th - Forbes “Most influential women in the world”, the tone of this book so casual that it completely fails at many levels to capture her aura. Third, we undertook brutal prioritization. Aspiring CEOs have to understand that they are signing up for a lot more than CEOs did in the 1970s, 1980s, 1990s, and even four or five years ago. So this is a whole new environment, and the role of the CEO has forever changed. Western models cannot simply be applied to those markets because they differ culturally. You cannot just swoop like a seagull into and out of a country or a city. So by being visible and not hiding myself in my office, I was telling people, “Hey, things are okay. In 1980, Nooyi joined the Boston Consulting Group (BCG) as a strategy consultant, and then worked at Motorola as Vice President and Director of Corporate Strategy and Planning, followed by a stint at Asea Brown Boveri. Our market capitalization is almost $100 billion. At the beginning of the year, we started with five priorities and we kept hammering on those priorities every quarter, in every town-hall meeting, in every interaction we had with the employees, and in every piece of communication. And it’s no longer about dealing with the traditional cast of characters—your employees, customers, suppliers, investors. We increased R&D through the downturn. In a conversation with Grant Freeland, senior partner and managing director of The Boston Consulting Group, Nooyi elaborates on her views about the changing nature of leadership. If Nooyi says that she has not changed her leadership style during the recent economic turmoil, it is mostly because she has believed for several years that tomorrow’s leaders must have fundamentally different skills from those required of executives in the past. Leadership Development, And it’s no longer about dealing with the traditional cast of characters—your employees, customers, suppliers, investors. In the key markets and cities, you need to make sure you spend quality time. We’re bigger than many countries. We actually thought this might be the right time to make some long-term bets. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Being a CEO is not that much fun after all. What were some of the actions that Pepsi took to manage a drop in demand? Among the senior leadership, it is. We set the agenda very, very carefully. If we do not transform our portfolio, we cannot sustain performance. How do you make that a reality at PepsiCo? In periods of crisis, leaders can be tempted to take greater control and drive change from the top. Indra K. Nooyi on Performance with Purpose. Third, you must be able to think globally and act locally. To be able to manage these young kids who are coming to PepsiCo, we have to be able to think digitally and be able to manipulate all this new technology. The downturn has reinforced all the elements of performance with purpose. We set the agenda very, very carefully. How do we make sure that, as a company, we replenish the planet and leave the world a better place than it was when we began playing around with it? Early on, we realized that we were going to have a slowdown. They went to my mum and said to her, “You brought up such a good kid.” They complimented my mother and didn’t really focus on me. Has the recession exacerbated that trend? If you look around the world, there’s still growth, but we have to view our portfolio differently. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. In a downturn, it’s even harder than usual to turn around a business because the rules are changing, the marketplace is changing, and the consumer value proposition is changing. Before my time at PepsiCo, I was at Asea Brown Boveri and Motorola, and before that, I cut my teeth at BCG. Aspiring CEOs have to understand that they are signing up for a lot more than CEOs did in the 1970s, 1980s, 1990s, and even four or five years ago. We need to think about the needs of a country and the way people live and behave in that country. If Nooyi says that she has not changed her leadership style during the recent economic turmoil, it is mostly because she has believed for several years that tomorrow’s leaders must have fundamentally different skills from those required of executives in the past. CEOs have to become learning CEOs. —Indra Nooyi (chairman and CEO, PepsiCo) “In the end, there are not that many value levers. It’s 24/7. We’ll come out of this okay.”, Second, we kept on trying to practice what I call realistic optimism. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws. This summer, I spent two weeks in China. The most important part of performance with purpose is the use of the word “with.” It’s performance with purpose, not performance and purpose, or performance or purpose. When I was visiting India two years ago, I went to visit my mum, and she wanted me to dress up and sit with her as she entertained all her friends, neighbors, and second through fifth cousins, who were coming to visit. According to Forbes, she is consistently ranked among World's 100 Most Powerful Women. My honest belief is that corporations are little republics in their own way. This is an old notion, but we must take it to a whole new level. We increased R&D through the downturn. I’ve been at PepsiCo for 15 years and became chairman and CEO about three years ago. Tous les candidats qualifiés recevront une considération pour un emploi sans égard à la race, la couleur, l'âge, la religion, le sexe, l'orientation sexuelle, l'identité / expression de genre, la nationalité, le statut d'ancien combattant protégé ou toute autre caractéristique protégée par la loi fédérale, étatique ou locale le cas échéant ; et ceux ayant des antécédents criminels seront considérés d'une manière conforme aux lois nationales et locales applicables. As she pointed out in a recent interview, “The most important part of per-formance with purpose is the use of the word with. Today’s young people do not want to be wedded to a job like the people of my generation were. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. That’s when I realized that I had not told the parents of the executives who do such an extraordinary job for PepsiCo that they themselves did a great job bringing up their children. They speak different languages, and their religious backgrounds are different. In the year 2006, Nooyi was named the next CEO and White was her competitor. You are dealing with governments, with NGOs, and with any interested party that decides to take on the company. Leadership Development, She is the current Chairman and Chief Executive Officer of PepsiCo, the second largest food & beverage business in the world (by net revenue). We also must give people the opportunity to work in international markets if they’re so inclined and have the capability. You talked about needing to be open to cultures and customs. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. Fourth, you must become much more open-minded. Our market capitalization is almost $100 billion. As you reflect on the last couple of years, what have you learned that surprised you? We can’t have an adversarial relationship. How do you keep employees motivated in a slower-growth environment? Indra Krishnamurthy Nooyi is an Indian-born American business executive. This is an old notion, but we must take it to a whole new level. PepsiCo CEO and Chairman Indra Nooyi is the only Indian origin woman in Fortune's 51 Most Powerful Women list that is topped by Mary Barra, … And unless you deliver performance, you can’t fund purpose. Indra K. Nooyi on Performance with Purpose, Investisseurs principaux et capital-investissement, Industries de transformation et matériaux de construction, Transformation, redressement et restructuration, Diversité et intégration - Promouvoir la diversité sur le lieu de travail. That’s the new reality. Nooyi is one of the top female executives in the United States and is consistently ranked among the World's 100 Most Powerful Women. Historically, growth has been a very good motivator for people. Second, you need to understand that public-private partnerships are critical for companies to be successful. We have enormous influence in the world. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo embarked on a corporate mission—“performance with purpose”—meant to marry financial success and social responsibility. Has the recession exacerbated that trend? Performance with purpose is what I’d like PepsiCo to stand for. Leaders like Indra Nooyi, former CEO of PepsiCo, have been advocating this for over 10 years. We can develop hundreds of new products, and stores have enough space for them. It’s 24/7. The findings of the position paper, prepared by Boston Consulting Group for the chamber, are part of interviews conducted with over 50 global thought leaders drawn from the industry, academia and policy makers. Could you briefly describe your personal background and your professional background? How can we introduce lots of new products there? In the key markets and cities, you need to make sure you spend quality time. Why did you do that and what did you learn? Biographies are supposed to be motivational awakening zeal in readers. Indra Krishnamurthy Nooyi is an Indian-born American business executive. Indra Nooyi, age 58CEO, PepsiCo, United StatesNooyi has, once again, exceeded analyst's expectations and dour forecasts: Despite a global decline in … Boston Consulting Group is an Equal Opportunity Employer. As a Western company, we at PepsiCo have to make doubly sure that we don’t just export a model and say, “Give it some local colors or local flavors.” We actually have to tell our people, “Develop a model in your country that’s right for your country.”. And in today’s environment, people still want to eat healthy foods. © Boston Consulting Group 2020. They’re challenging corporate governance issues in every which way, and the trust in companies is at an all-time low. 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