Pepsi’s Indra Nooyi on Leadership

Pepsi’s Indra Nooyi on Leadership

Pepsi’s Indra Nooyi on Leadership

Indra Nooyi is one of the most powerful women in world business. First as CFO then as chairman and CEO of PepsiCo, she’s restructured the US food and drinks giant.

Excerpts from Simon Hobbs interviews Indra Nooyi, CEO and chairman of American giant PepsiCo

How do you define leadership?
Indra Nooyi: Leadership is hard to define and good leadership even harder. But if you can get people to follow you to the ends of the earth, you are a great leader. As a leader, I am tough on myself and I raise the standard for everybody; however, I am very caring because I want people to excel at what they are doing so that they can aspire to be me in the future.

What sort of upbringing did you have?
IN: A conservative, south Indian upbringing but there were a lot of contrasts – I grew up in a Hindu household but went to a Roman Catholic school. I grew up with a mother who said, “I’ll arrange a marriage for you at 18” but she also said that we could achieve anything we put our minds to an encourage us to dream of becoming prime minister or president. She made me learn Indian classical music because that’s what good Indian girls did, but she also let me be in a rock band. “You’ve got to be a good Indian woman first,” she said, “but go ahead and dream.”

By 19, you weren’t married, you graduated with a degree in Chemistry, Physics and Maths from Madras Christian College, and then you went into the Indian Institute of Management ,Calcutta. Did you know what path you were going to take and why weren’t you married?
IN: Well, there were a lot of proposals! But the good news was that my elder sister refused to get married straight away and I couldn’t get married until she did so I had the licence to go off and dream. I asked my parents for permission to study in America and they were so sure that I wouldn’t get in and get a scholarship that they encouraged me to try. So I applied to Yale and got an excellent scholarship. I then worked for the Boston Consulting Group for six and half years. Every year in consulting is like three years in the corporate world because you have multiple clients, multiple issues – you grow so much.

Is it true that in 1994 you were due to work for GE when you were poached by PepsiCo?
IN: Wayne Calloway, who was both the CEO of PepsiCo and a board member of GE said that while he commended me for thinking of working with GE – a truly great company in his estimation – he wanted me to consider PepsiCo because its need for me was greater, that there was no one like me at PepsiCo.

What did you offer that PepsiCo did not already have?
IN: PepsiCo did not have a woman in the senior ranks, nor a foreign-born person who was willing to think differently.

Over seven years, you restructured the business phenomenally, selling off restaurant chains such as Taco Bell, Pizza Hut and KFC and reduced the size of the group by about a third. Why did they have to go?
IN: Two months after I joined the company, the restaurant business ran into trouble and we realised that we were imposing a packaged goods culture on a service industry. Once the strategic analysis was done objectively, rigorously and presented without emotion it was easy to make the decision to unfetter the restaurants. The process was emotional because we had to separate people who grew up with PepsiCo and put them into a new company but people accepted the decision intellectually and said, “let’s get on with it”.

The CEO, Roger Enrico, promoted you to CFO in 2001. He’s now the Chairman of Dreamworks and said recently that you are the best negotiator that he’s seen in his life. What is your key to negotiation?
IN: I’m very honest – brutally honest. I always look at things from their point of view as well as mine. And I know when to walk away.

When you became CFO, some people had doubts as you lacked operational experience.
IN: Simon, when I sit down to do a job, I never think, “what’s my next job?” I set out to do this job better than anyone else possibly could. And there are so many people with operational skills, but tell me how many people there are out there with real strategic skills?

How did you feel in 2006 when you became the company’s fifth CEO?
IN: It was overwhelming, honestly. Incredible privilege and incredible responsibility. I realised I was going from a quasi-private person to a completely public figure. People build you up too fast and they have to realise that I’m human.

What are you like as a manager in daily life? I hear you cross-examine employees’ spouses.
IN: Look, I don’t want people’s questions about PepsiCo to be silences by people’s employee husbands or wives. I want them to be able to talk to me. I want them to look upon themselves as PepsiCo employees, too, because they are the extended family.

You have said that leaving behind a corporate legacy is almost an obsession, but that you also used to wake up feeling guilty about everything.
IN: Having a husband, being an Indian daughter and daughter-in-law – all of them have pressures. The guilt consumed me for a long time because I felt I wasn’t good at everything and people like me want to be outstanding at everything. Three years ago I decided to park all the guilt behind me because I decided to do the best that I could rather than be superb at everything. Because I can’t. There is always a series of sacrifices in business, especially for women.

What have you done for women in business that could be replicated elsewhere?
IN: We created a very specific diversity and inclusion programme. We set goals and time frames and held people accountable for getting to them. The first step was getting people in, but that’s only half the problem because if they then leave it’s more painful for the organisation. Step two is inclusion. For example, if a woman says something, don’t immediately interpret it as if a man said it, or expect a woman to react to a comment in the same way as a man. You will have a different dynamic with women, African-Americans or Latinos because each group is a product of their socio-economic culture.

Is the culture you’ve created more important overall, then, say, a maternity deal?
IN: It’s a holistic package. The biggest challenge is figuring out how to accommodate women or people with special needs in the workforce without overburdening those who have to compensate. We know the problem, but we’re still trying to find the solution.

You’ve said that you might like to join Washington politics in the future – what contribution would you most like to make?
IN: Well, let’s be clear about this. I’ve not said that I want to join Washington politics, but at some point, I’d like to give back to the country.

From your point of view, what would be more significant – the US having its first woman president or first African-American president.
IN: Ah, well! Both would be frame-breaking but having the best president will be best for the US, regardless of gender or race.