Two Lessons From Indra Nooyi’s SuccessPosted on August 16, 2006 by amardeepBy now, most readers probably know that Indra Nooyi is being promoted to the CEO of PepsiCo, a company with $38 billion in revenues. She’s been mentioned several times before on Sepia Mutiny, mainly in response to comments she made at a graduation ceremony at Columbia Business School last year. (There are several other posts on her as well.) And Manish had asolid post on her recent promotion this past Monday on Ultrabrown.I draw two conclusions from her success. First, you can be a working mother and climb the corporate ladder while raising kids (Indra has two, who are I believe in their early/mid teens). Second, you can get ahead in the American corporate environment without sacrificing who you are culturally.

On the first point, there have been many recent stories about the difficulties facing powerful women. Maureen Dowd, for instance, recently published a book called Are Men Necessary?, where (among other things) she talked about the difficulty some women face in dating and/or marrying men who are less powerful or successful than they are. But a growing number of “power moms” are also flat-out powerful. And they do it without sacrificing their connection to their kids, as I think Indra Nooyi’s Nintendo policy proves:She views PepsiCo as an extended family and everybody at the company is there to help in every way possible. Sometime ago, when Indra was traveling, her daughter would call the office to ask for permission to play Nintendo. The receptionist would know the routine and ask: “Have you finished your homework? Have you had your snack? OK, you can play Nintendo for half an hour”. She then left a voice message for Indra saying “I gave Tara permission to play Nintendo”. (link)Have you had your snack? Ok, go play. Momma has to go acquire a multinational or two and pacify the Indian media regarding the recent pesticide allegations.

Secondly, you don’t have to sell yourself out and tell everyone your name is “Bob” if it’s really Balwinder. Nooyi’s story about getting her first job in the U.S. after completing her Master’s at Yale is illustrative:A story of this determined girl, who while studying in Connecticut, worked as a receptionist from midnight to sunrise to earn money and struggled to put together US$50 to buy herself a western suit for her first job interview out of Yale, where she had just completed her masters. Incidentally, she wasnÂ’t comfortable trying out a formal western outfit and ended up buying trousers that reached down only till her ankles. Rejected at the interview, she turned to her professor at the school who asked her what she would wear if she were to be in India. To her reply that it would be a sari, the professor advised her to “be yourself” and stick to what she was comfortable with. She wore a sari for her next interview. She got the job and has followed this philosophy for the rest of her career. (link)And she’s not afraid of letting people know she is a practicing Hindu:

She lives with her husband and two daughters in Fairfax county, Connecticut. If you ever visit her Connecticut home, do remember to take your shoes off before entering. If you forget, at least remember to take them off before entering the large puja room where a diya is lit and the inviting air of incense greets you.She keeps an image of Ganesha in her office, and in fact, some PepsiCo officials visited India and received similar images besides being told of the Hindu belief about Ganesh being the symbols of auspicious beginnings. Many of them now keep images of Ganesh in their offices!Nooyi attends PepsiCo board meetings in a sari; for she believes the corporate world appreciates people who are genuine. (link)Genuine, huh. I haven’t had that experience with the corporate world.   But more seriously, the point is valid. One canacculturate without assimilating; it is possible to get ahead in life without selling yourself out to the image people expect you to inhabit. There’s no reason to be defensive about being a vegetarian, or preferring mango lassi to martinis, or cricket to baseball… and on and on.Best of luck to Indra Nooyi!

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FEBRUARY 19 2008: 4:23 AM ESTEmail | Print    Type Size     

The Pepsi challengeCan this snack and soda giant go healthy? CEO Indra Nooyi says yes, but cola wars and corn prices will test her leadership.By Betsy Morris, senior editor

As CEO, the India -born Nooyi succeeds a long line of white males and is emblematic of the dramatic change sweeping the company.

Indra Nooyi (second from left) with her brother Nandu Narayanan (left), grandfather A. Narayana Sarma, and older sister Chandrika Tandon

Nooyi meeting in her office last month with her top deputies: (from left) Mike White, John Compton, and Massimo D'Amore. Her predecesor calls her a "larger-than-life leader."

Pepsico's purchase of Southern California's naked juice in 2007 made the company a stronger player in the booming healthy-beverage segment . Naked charges a premium price: about $3 for a 15-ounce bottle.

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(Fortune Magazine) -- Pepsi can have a strange effect on people. The company, that is, not the beverage. No sooner had PepsiCo president Indra Nooyi gotten word 18 months ago that she was to become the next CEO than she hopped on a plane to Cape Cod, where Mike White, her main challenger for the job, was vacationing. The two had worked together for years. Both had been CFOs and rising stars. Both loved music. When they'd been kicked out of a board meeting the

previous month while their fates were being discussed, they went to the Jersey Boys musical on Broadway and sang along to all the Frankie Valli songs.

As Nooyi's plane landed on Cape Cod, there was White waiting for her at the airport with a card he'd written to congratulate her. They took a long walk on the beach. Back at his beach house, he played the piano and she sang. Before she left, they went for ice cream. "Tell me whatever I need to do to keep you, and I will do it," she told her longtime colleague, who was vice chairman at the time. White said he would sleep on it.

That kind of scene may be rare in the hypercompetitive realm of C-suites, but not at PepsiCo (PEP, Fortune 500) (rank on the 2007 Fortune 500: No. 63). PepsiCo's three ex-CEOs, all on good terms with one another, weighed in to help Nooyi keep White onboard. She says she asked the board to increase White's compensation to nearly match hers (Nooyi's 2006 compensation: $7.1 million). White was Pepsi's best operations man - the kind of guy who would be indispensable in a downturn. He would be an important advisor. In the end, White decided to stay. When it was his turn to speak to the troops at the meeting the following week to announce Nooyi's appointment, he put it this way: "I play the piano and Indra sings." Says Nooyi: "I treat Mike as my partner. He could easily have been CEO." At key meetings she makes sure he is seated on her right.

That isn't the way a new CEO usually takes charge, but Indra Nooyi is an entirely different kind of CEO, a product of her native India as well as of PepsiCo's family-values approach to grooming CEOs. She is not hung up on pay. She's not shy about asking for help when she needs it. She's 52 years old and does not plan for this job to be her last. Her friend Henry Kissinger predicts that it's only a matter of time before she is plucked for a big Washington post, possibly a cabinet job, and Nooyi acknowledges that at some point, she'd like that. She's cosmopolitan, rigorously educated, and a strategic thinker - her background is Boston Consulting Group - much more interested in the burgeoning markets in Russia and China than in the noisy U.S. cola wars. A dinner gathering at her house is as likely to include Tony Blair and government ministers from India or Mexico as traditional pinstriped business types. As a vegetarian who for years has been talking about the importance of "gut health," she's not who you'd think would be leading a maker of sugary soda and salty snacks - but that's why she's taking the company in a different direction. She sings karaoke; she plays electric guitar. Her South Asian heritage gives her a wide-angle view on the world.

Since becoming CEO, she has reorganized PepsiCo to make it less fixated on the U.S. and broadened the power structure by doubling her executive team to 29. She has installed an Italian native, Massimo d'Amore, atop the division that includes the troublesome U.S. soft drink business, and recruited a former Mayo Clinic endocrinologist to head up R&D. Last year she spent $1.3 billion on acquisitions like Naked Juice, a California maker of soy drinks and organic juice. She has created a motto - "Performance With Purpose" - that puts a positive spin on how she wants PepsiCo to do business both at home and abroad.

It essentially boils down to balancing the profit motive with making healthier snacks, striving for a net-zero impact on the environment, and taking care of your workforce. "If all you want is to screw

this company down tight and get double-digit earnings growth and nothing else, then I'm the wrong person," she says. "Companies today are bigger than many economies. We are little republics. We are engines of efficiency. If companies don't do [responsible] things, who is going to? Why not start making change now?"

Nooyi didn't wait to become an elder statesman CEO before making herself heard on the public stage. Her predecessor, Steven Reinemund, calls her a "larger-than-life leader." In a speech to the food industry in January, she pushed the group to tackle obesity. "Do you remember campaigns like 'Keep America beautiful'? What about 'Buckle up'?" she asked. "I believe we need an approach like this to attack obesity. Let's be a good industry that does 100% of what it possibly can - not grudgingly but willingly." At the 2008 World Economic Forum in Davos she told Secretary of State Condoleezza Rice it was critically important that "we use corporations as a productive player in addressing some of the big issues facing the world."

Her fluency in the global arena is increasingly critical to the business. With the U.S. marketplace in slow-growth mode even in the best of times, the biggest opportunities are overseas. PepsiCo's international business grew 22% last year, triple the rate of domestic sales, and now contributes 40% of total revenue ($39 billion last year). And a CEO had better be taking the moral high road. There is no longer a free pass for the ugly American company: Should Baked Lays fail to live up to its health claims, it'll get bounced off the store shelf by regulators in Britain. And if you are just the next greedy American corporation, you don't stand a chance in China's tight labor market. Set too ambitious a profit target in India, and there will be hell to pay if your bottling company drains the water table.

"If you look at the job entirely from the American perspective, then it becomes impossible to run a global business," says Kissinger, who consults for Pepsi and other companies on international matters. "You have to relate your interests to the interests of other parts of the world - to be relevant in their societies. Indra seems to understand this instinctively."

Suddenly, however, a change in the economic environment is likely to test whether Nooyi is a leader for all seasons. With a possible recession looming in the U.S., PepsiCo is headed into the toughest period it has faced in a decade. Prices are soaring for its main ingredients, commodities like corn and cooking oil. Its newest products, like premium-priced juice, may face resistance from budget-conscious consumers. Meanwhile, archrival Coke (KO, Fortune 500) is gearing up to revive the cola wars with such products as calorie-free Coke Zero, which looks like a hit, and the company's newly acquired Vitaminwater lineup.

For a long time, investors have been enamored of PepsiCo for its bold strategic moves and steady, reliable growth. The company's stock has more than doubled since 2003 and now hovers around $70 a share, up about 10% since she took over. But Wall Street will care much more about how well Nooyi handles corn prices than about how well she solves world problems. So far, so good. In the fourth quarter of 2007, revenue went up 17%, to $12.3 billion, and operating profits rose 9%, to $1.7

billion. Industry analysts at Bank of America say PepsiCo "is demonstrating great flexibility in a tough environment."

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