When PepsiCo CEO Indra Nooyi tapped Jobs for advice
When Indra Nooyi first took the reins as PepsiCo's CEO in 2006, she reached out through a friend to tech titan Steve Jobs.
He agreed to a short meeting which blew out to two hours, and two pieces of advice he gave Nooyi had a strong impact on her famously transformational leadership:
- If design is important to you, it has to report to you. If you don’t show CEO support for that function, then don’t even get started on that journey.
- If you really feel strongly about something, then throw a temper tantrum. Throw things around. People have got to know that you feel strongly about it.
She said that while she didn’t emulate Steve Jobs and do things like throw papers across the room, she did use certain words a bit more freely, “….and I’m screaming a bit more, by screaming I mean I pound the table a bit more, but it’s effective, because it shows the passion for what I’m doing.”
Nooyi also took design seriously, telling Dezeen design magazine that she participated in a panel discussion at the Milan design fair to send "a message to the entire company: that this is so important."
Disturbed that PepsiCo's products looked like "everyone else's", Nooyi in the past few years expanded the design team from 100 to 160, and opened studios around the world for them to work in.
"I'd say that design isn't just improving what we're doing," she said at the panel discussion, "...it's improving the top line and the bottom line, and it's building a sustainable pipeline of innovation for the future. It's allowing us to reframe our business."
For 12 years until late 2018, Indra Nooyi held the top job at one of the world’s biggest food and beverage companies. She grew PepsiCo revenues 80% in that time, making it into the top three in the world in the food and drink sector, alongside Anheuser-Busch and Nestle.
Indra told the audience it’s either the most exciting time to be a CEO of a food and beverage company, or the most frightening time.:
“Your grandmother bought ingredients and cooked; your mother got it out of a can; and you order it from a telephone.”
Here are her insights into today’s FMCG space as told to the MPW 2017 summit:
- Food and beverage space is going through profound changes. The whole industry is getting disrupted in every which way possible.
- An article in HBR reported only 10% of women and families like to cook from scratch, it’s come down from 40%, some astronomical change in the last decades.
- Retail may no longer be the predominant channel for food and beverage.
- Companies like Amazon have so much data on you they can almost anticipate what you’re going to order.
- Companies such as PepsiCo are impulse driven, which need potential customers to see the product to want the product, so they have to create impulse in different ways.
- The muscle CEOs have to develop is the ability to anticipate these changes, redo the company’s business model for the new world. They need to re-set the competitive equation, but marry that with a cost-cutting culture, because the legacy model has to become more cost-competitive while a new model is built for the new times.
Nooyi told the audience that PepsiCo had built a new model to run the e-commerce arm of the corporation. It already had revenue of $US 1billion, she said.
Here are some insights into the new PepsiCo model:
- The 200 people who work in the e-commerce business of PepsiCo are not located in its main office.
- PepsiCo wants it to look and behave as a tech company, not a traditional organisation.
- Indra says those working for the e-commerce arm are compensated differently, and hired differently, plus they have a stake in the e-commerce operation.
- She says that while PepsiCo talks to the consumer, it sells through a retailer, and cannot compete with its retail partners. She acknowledges the care with which it has to evolve the model. Indra says PepsiCo is working with retail partners, including the pure play ecommerce companies, as well as the dot coms of every retailer, to grow their business, “with appropriate silos in between.”
- It’s critically important that big brands are represented on Amazon. When a consumer goes on the website they don’t look for sports fuel, she says, instead they say ‘how do I find a Gatorade?’
- Indra says this means brands have to make sure the navigation tools highlight their products constantly.
- She adds they also have to innovate because if they don’t create excitement online, the brands will start losing relevance in the search order.
- Strategy now is not about shelf space, the physical shelf space, instead it’s about how to get the right clicks so your products move up in the search order.
PepsiCo former CEO and Chairman Indra Nooyi is appearing live in Australia for the very first time at an exclusive executive 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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