The CEO who made revenue soar at PepsiCo, Indra Nooyi
Twice named one of TIME magazine’s 100 Most Influential People, Indra Nooyi has been globally praised for her work ethic, intellect and prescient and strategic thinking.
But, the former CEO and Chair of PepsiCo is as much known for her strong, values-based leadership.
Here, some of the lessons from Ms. Nooyi, who was recently named on the board of Amazon.
- Thank people - even the parents of your executive team. One of the most unusual things Indra Nooyi did as CEO of PepsiCo was to write more than 400 letters each year to the parents of her senior executives. She was inspired to do so after a family visit to India, where she watched her mother bathing in praise from visitors who congratulated her for her daughter Indra’s stellar career. So moved was Indra, she went back to PepsiCo and penned the letters to the executives' parents. "I wrote a paragraph about what their child was doing at PepsiCo," she told CNBC. "I said, 'Thank you for the gift of your child to our company.'" She went on to say that some of the executives told her, "'My God, this is the best thing that's happened to my parents. And it's the best thing that's happened to me.'"
- Keep learning throughout your career. CNBC reported that, as CEO, Indra Nooyi made the tough decision to overhaul the PepsiCo's IT system. To understand the technologies and what was needed, CNBC reports she read 10 textbooks cover to cover over her holiday and had professors on call to answer her questions. Reporter Ruth Umoh writes this legwork didn't just make her more informed and help her clearly identify the right solution, it helped her overpower skeptics who were hesitant to make a change.
- Develop a set of guiding principles. Indra Nooyi’s legacy can be seen in PepsiCo’s six guiding principles, which are present in every action and piece of communication from the global giant:
- Care for our customers and the world we live in.
- Speak with truth and candour at all times.
- Respect others and succeed together.
- Sell only products we can be proud of.
- Win with diversity and engagement.
- Balance short-term and long-term.
- Be authentic. Forbes magazine writes that Indra always opts for authenticity over painting a veneer of perfection. She is refreshingly honest about the relentless hours required to be an effective CEO, and what parts of her life suffered as a result. Indra was known for working as many as 20 hours a day, often seven days a week. When asked if that made her a good role model for other women, Indra Nooyi answered, “probably not."
- Don’t be afraid of change The PepsiCo of today is barely recognisable as a soft drink company, with a new strong ethos of healthy product choices and a socially responsible mission. CNN writes that "She was the first person to truly acknowledge that companies needed to change. She understood that very deeply, and started putting into place a couple of key elements that all companies now accept as normal." The changes have been across all aspects of the business. Some examples include: making a commitment to improving access to clean water in developing communities, winning PepsiCo the Stockholm Industry Water Award; and women empowerment, leading to PepsiCo being named one of the Top 1,000 Companies Worldwide for Millennial Women in 2018.
- Don’t ignore your moral compass for results. Under Indra Nooyi’s leadership, PepsiCo thrived, with revenue growing to $63.5 billion from $35 billion in 2006, while the company’s share price has nearly doubled in that time. Through this time, Indra’s focus on Performance with Purpose never wavered. In the past 12 years, PepsiCo has made the Ethisphere’s list of the world’s most ethical companies every year.
- Stand firm for what you believe in. The New York Times describes how Indra Nooyi spent much of her tenure at the top defending her strategy to critics, who included activist investors:“When PepsiCo lost market share on its namesake product a few years ago, critics claimed Ms. Nooyi was too focused on the “healthy” strategy. Others, including the billionaire activist Nelson Peltz of Trian Fund Management, wanted the company split into two, a beverage giant and a snack king.” Indra welcomed the challenge, but stood firm and kept the two parts of the company together.
- Communicate your vision simply and often. Indra Nooyi’s segmenting of product categories under the catchy names Fun for You, Better for You and Good for You lines proved to be a winner, with Better for You and Good for You segments accounting for 50% of revenue by 2017 (up from 38% in a year).
- Walk the walk. Indra didn’t just add healthy brands, she formed the Healthy Weight Commitment Foundation, leading the industry to remove 6.4 trillion calories from food and beverage products.
- Innovate by learning. There are loads of initiatives around innovation at PepsiCo, including the Nutrition Greenhouse, which is a collaborative accelerator of emerging and innovative businesses in the nutrition space. A $100,000 partnership is on offer to the “winner.” Businesses in the accelerator include those using healthy ingredients, or waste from the food industry. PepsiCo has runs on the board in acquisitions, adding a billion dollar business to its portfolio most years. This year it added SodaStream.
Indra Nooyi is the leaders' leader. She has shown competence across all aspects of leadership, from financial literacy, employee empathy and workplace culture, communication of a strong vision, the embracing of social responsibility and moral leadership, to authenticity and humility. Every CEO could learn a lot from Ms. Nooyi.
PepsiCo former CEO and current Chair Indra Nooyi is appearing live in Australia for the very first time at an exclusive dinner event in both Melbourne and Sydney in June 2019, hosted by The Growth Faculty. To secure tickets to this executive leader event, click here.
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Correction: This blog was originally published with an incorrect sentence saying Ms Nooyi now runs the Foundation for a Smoke Free World. That is, in fact, Derek Yach, former Director of Global Health Policy of Pepsico, Inc. I apologise for the error.
Yach, who has since left Pepsi, stated in a CNN Business article that Indra Nooyi was dedicated to combating weight problems.
“She was the primary individual to really acknowledge that firms wanted to alter,” he is quoted as saying in CNN's online article. “She understood that very deeply, and (put) into place a few key components that ....firms now settle for as regular.”