And as long as PepsiCo keeps doing well, people will be okay. Michael D. White is a competent controller and a capable operator, and that is why he is one of the backbones of the company. I am spending a lot of time with lawmakers, presidents, prime ministers, commerce ministers, health ministers, and NGOs. As you reflect on the last couple of years, what have you learned that surprised you? Look at 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? You talk about thinking globally and acting locally. 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. Is that what happened in this situation? First, we were very visible, doing as much walking around as possible. Let’s just focus a little bit more on the last 18 months. We have a profound role to play in society, and we have to make sure that we are constructive members of society. 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.”. If you look around the world, there’s still growth, but we have to view our portfolio differently. They speak different languages, and their religious backgrounds are different. We have to make sure people understand that growth patterns will shift. The first is human sustainability. We’ll come out of this okay.”, Second, we kept on trying to practice what I call realistic optimism. INDRA NOOYI'S PASSIONS" PEOPLE, PERFORMANCE & PURPOSE AT PEPSICO AND BEYONS Former chairman & CEO of PepsiCo Indra Nooyi’s new book focuses on how to integrate work & family—and demonstrates why her leadership style continues to inspire. You cannot just swoop like a seagull into and out of a country or a city. All rights reserved. We need to think about the needs of a country and the way people live and behave in that country. We have a profound role to play in society, and we have to make sure that we are constructive members of society. Leaders like Indra Nooyi, former CEO of PepsiCo, have been advocating this for over 10 years. Purpose has three elements. The second element is environmental sustainability. Greenwich Time. Are you spending more time with the external world now than you were before? They didn’t even say hello. How can you stay true to the business you’re in while delivering choice in a completely different way—one that’s sensitive to the unique needs of a country? So this is a whole new environment, and the role of the CEO has forever changed. Indra Nooyi. In the key markets and cities, you need to make sure you spend quality time. Could you elaborate on those five characteristics? We can’t do it. 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. 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? About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo … 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. 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.”. 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 civilizations are vastly different. Historically, growth has been a very good motivator for people. First, you surround yourself with great people, who run the businesses. Too many companies have not done right by their shareholders by focusing strictly on the short term. As you reflect on the last couple of years, what have you learned that surprised you? Historically, growth has been a very good motivator for people. Read this post on Forbes >> THE END OF MANAGEMENT AS WE KNOW IT Our businesses in those markets need to tailor products, business models, and people practices to the local market. The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. Was performance with purpose challenged during this last 18 months as the economy worsened? But the way people live east of the Middle East is vastly different from how they live in the rest of the world. Indra Krishnamurthy Nooyi is an Indian-born American business executive. According to Forbes, she is consistently ranked among World's 100 Most Powerful Women. 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.”. But the way people live east of the Middle East is vastly different from how they live in the rest of the world. This is an old notion, but we must take it to a whole new level. 62K likes. We can develop hundreds of new products, and stores have enough space for them. 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. Today’s young people do not want to be wedded to a job like the people of my generation were. We increased R&D through the downturn. We increased R&D through the downturn. But we cannot be guided purely by the earnings cycle, or we might end up adding costs to society. The world has become much more complex, and the only way companies can function effectively is if we put ourselves in the shoes of lawmakers and nongovernmental organizations (NGOs), and they put themselves in our shoes. My honest belief is that corporations are little republics in their own way. Some of its notable alumni include Pepsi CEO Indra Nooyi, Israeli Prime Minister Benjamin Netanyahu, and … BCG was the pioneer in business strategy when it was founded in 1963. Biographies are supposed to be motivational awakening zeal in readers. Today’s young people do not want to be wedded to a job like the people of my generation were. Could you elaborate on those five characteristics? You talked about needing to be open to cultures and customs. How can we introduce lots of new products there? Boston Consulting Group est un employeur offrant l'égalité des chances. People Strategy. 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. 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. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. 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. Indra Nooyi, age 58CEO, PepsiCo, United StatesNooyi has, once again, exceeded analyst's expectations and dour forecasts: Despite a global decline in … The downturn has reinforced all the elements of performance with purpose. You are dealing with governments, with NGOs, and with any interested party that decides to take on the company. You are dealing with governments, with NGOs, and with any interested party that decides to take on the company. We can’t have an adversarial relationship. Unless you focus on purpose, you cannot deliver performance. The first is human sustainability. 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. When all her guests came in, they ignored me. This summer, I spent two weeks in China. And it unleashed emotions that were unbelievable, creating an emotional bond among the executives, their parents, and me. Although developed markets may not grow as fast as they have in the past, developing and emerging markets will grow faster. Leadership Development, Fourth, once we gave the line managers their agendas, we let them loose and said, “Go make it happen.” And the only time I got intrusive is when a business needed to be turned around. We are likely entering a period of low growth. How can you stay true to the business you’re in while delivering choice in a completely different way—one that’s sensitive to the unique needs of a country? Our businesses in those markets need to tailor products, business models, and people practices to the local market. Are you spending more time with the external world now than you were before? January 14, 2010. In the developed markets, we work with large stores. I’ve been at PepsiCo for 15 years and became chairman and CEO about three years ago. Before my time at PepsiCo, I was at Asea Brown Boveri and Motorola, and before that, I cut my teeth at BCG. Has the recession exacerbated that trend? That’s the new reality. Governments have gotten more intrusive. How do you make that a reality at PepsiCo? If we do not transform our portfolio, we cannot sustain performance. They’re challenging corporate governance issues in every which way, and the trust in companies is at an all-time low. You talk about performance with purpose. 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. “I … And it’s no longer about dealing with the traditional cast of characters—your employees, customers, suppliers, investors. Longtime PepsiCo CEO Indra Nooyi will step down as the top executive at the world's second-largest food and beverage company. Within PepsiCo, do you think that the importance of the global market is recognized? 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. The world has become much more complex, and the only way companies can function effectively is if we put ourselves in the shoes of lawmakers and nongovernmental organizations (NGOs), and they put themselves in our shoes. You talk about thinking globally and acting locally. 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. Let’s take PepsiCo’s beverages. Third, you must be able to think globally and act locally. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. 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. So by being visible and not hiding myself in my office, I was telling people, “Hey, things are okay. When I came back from India, I wrote to those parents and told them how much they contributed to the success of PepsiCo through the gift of their son or daughter. Half of humanity lives east of the Middle East. The downturn has reinforced all the elements of performance with purpose. Purpose has three elements. But I think it will take time for the rank and file to understand that international growth is a critical part of our future. Although developed markets may not grow as fast as they have in the past, developing and emerging markets will grow faster. Governments have gotten more intrusive. You talked about public-private partnerships. Indra Nooyi, Former Chairman and CEO of PepsiCo. This is more than a job—it’s a calling. Being a CEO is not that much fun after all. How do you find the time when you’re running a company the size of PepsiCo? And as long as PepsiCo keeps doing well, people will be okay. 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, … In fact, I’d say that it was reinforced by the downturn. 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. 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. The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. Now let’s consider India, which has tiny stores. People think there are many, but in reality, there are few. Let’s just focus a little bit more on the last 18 months. Fifteen years ago Indra Nooyi, then the head of strategy (now the boss) at PepsiCo, was a demanding client for consultants, having been one herself at BCG… We actually thought this might be the right time to make some long-term bets. An Interview with the Chairman and CEO of PepsiCo. 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. My honest belief is that corporations are little republics in their own way. 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. It appears your browser does not support JavaScript or you have it disabled. The third element is talent. 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.”. Now let’s consider India, which has tiny stores. 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? How do we make sure that we provide products that range from treats to health foods and allow customers to make balanced, sensible choices? First, you have to focus on the long term. Second, you need to understand that public-private partnerships are critical for companies to be successful. Many companies take a global product and send it to Asia painted in a local color or given a local flavor. Look at PepsiCo. How can we introduce lots of new products there? Excerpts follow. Has the recession exacerbated that trend? Indra K. Nooyi on Performance with Purpose. Fifth, you must develop emotional intelligence. The notion of focusing only on short-term earnings is a thing of the past. BCG was the pioneer in business strategy when it was founded in 1963. Related Expertise: In fact, I’d say that it was reinforced by the downturn. Fifth, you must develop emotional intelligence. Be realistic, but don’t project doom and gloom. © Boston Consulting Group 2020. Boston Consulting Group is an Equal Opportunity Employer. Unless you focus on purpose, you cannot deliver performance. And it unleashed emotions that were unbelievable, creating an emotional bond among the executives, their parents, and me. So this is a whole new environment, and the role of the CEO has forever changed. Third, we undertook brutal prioritization. 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. 58K likes. So the question is, How do you still give the consumer in India a choice? In the key markets and cities, you need to make sure you spend quality time. Could you describe this idea? If you do not treat them right, people today will say, “Goodbye, we’re going to the next job.” The only way you can hold onto these employees is by hooking them emotionally to the company, through our business model and what we stand for. Could you briefly describe your personal background and your professional background? Indra K. Nooyi on Performance with Purpose. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. How do you make that a reality at PepsiCo? I’ve been at PepsiCo for 15 years and became chairman and CEO about three years ago. If you look around the world, there’s still growth, but we have to view our portfolio differently. So the question is, How do you still give the consumer in India a choice? If we do not become greener than we are today, young people are not going to come to work for us. Rishi said achieving the promise of spending two percent of GDP on R&D by 2017 will require a considerable jump from the current spend of approximately one percent. What were some of the actions that Pepsi took to manage a drop in demand? When all her guests came in, they ignored me. We are likely entering a period of low growth. You talked about needing to be open to cultures and customs. We set the agenda very, very carefully. We did not want to cut back on all of our long-term investments. Then, you start traveling. This summer, I spent two weeks in China. I kept saying to our employees, “The economy’s bad, unemployment is going up, but we’ll do okay. 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. 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. We can’t do it. 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. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. Early on, we realized that we were going to have a slowdown. You talked about public-private partnerships. In periods of crisis, leaders can be tempted to take greater control and drive change from the top. You cannot just swoop like a seagull into and out of a country or a city. Then, you start traveling. All rights reserved. As the CEO of Pepsi, a position she held for 12 years, and in her time at the company before taking on that role, she had to make accommodations to raise her two kids. 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. The third element is talent. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. They speak different languages, and their religious backgrounds are different. We’re bigger than many countries. 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. I based these observations on my wandering around the world and leading our company. How do you keep employees motivated in a slower-growth environment? Sadly, this book is just tumbles down. And it’s no longer about dealing with the traditional cast of characters—your employees, customers, suppliers, investors. Indra Krishnamurthy Nooyi is an Indian-born American business executive. 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. She also stresses the need for leaders to have direct personal understanding of the markets and cultures in China, India, and other growth spots. Is that what happened in this situation? Our market capitalization is almost $100 billion. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. 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. I based these observations on my wandering around the world and leading our company. We need to think about the needs of a country and the way people live and behave in that country. 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. The way that the CEO projects himself or herself on the organization sets the mood for the company. Among the senior leadership, it is. © Boston Consulting Group 2020. In August 2019 the Business Roundtable acknowledged that companies today operate in … The Chairman and CEO indra Nooyi, Former Chairman and CEO about three years.. The past, developing and emerging markets will grow faster take a global product and it. And drive change from the top executive at the world 's second-largest food beverage! To be wedded to a whole new environment, people still want to eat healthy foods Hey, are. These observations on my wandering around the world boston Consulting Group partners with leaders in and... It was reinforced by the earnings cycle, or we might end up adding to! 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