She is among the top 100 most influential people according to
Time magazine’s 2008 list. She is also
number 5 in Forbes’s “Most Influential
Women in the World” (2007), number 1 in Fortune’s “50 Most Powerful Women” (2006), and
number 22 in Fortune’s “25 Most Powerful
People in Business” (2007). The lists go on and on. To those
familiar with her work and style, this should come as no surprise:
Even before she became the CEO of PepsiCo Inc. (NYSE: PEP) in 2006,
she was one of the most powerful executives at PepsiCo and one of
the two candidates being groomed for the coveted CEO position. Born
in Chennai, India, Nooyi graduated from Yale’s School of Management
and worked in companies such as the Boston Consulting Group Inc.,
Motorola Inc., and ABB Inc. She also led an all-girls rock band in
high school, but that is a different story.
Figure \(\PageIndex{1}\): Penn State – Indra
Nooyi – CC BY-NC 2.0.
What makes her one of the top leaders in the business world
today? To start with, she has a clear vision for PepsiCo, which
seems to be the right vision for the company at this point in time.
Her vision is framed under the term “performance with purpose,”
which is based on two key ideas: tackling the obesity epidemic by
improving the nutritional status of PepsiCo products and making
PepsiCo an environmentally sustainable company. She is an
inspirational speaker and rallies people around her vision for the
company. She has the track record to show that she means what she
says. She was instrumental in PepsiCo’s acquisition of the food
conglomerate Quaker Oats Company and the juice maker Tropicana
Products Inc., both of which have healthy product lines. She is
bent on reducing PepsiCo’s reliance on high-sugar, high-calorie
beverages, and she made sure that PepsiCo removed trans fats from
all its products before its competitors. On the environmental side,
she is striving for a net zero impact on the environment. Among her
priorities are plans to reduce the plastic used in beverage bottles
and find biodegradable packaging solutions for PepsiCo products.
Her vision is long term and could be risky for short-term earnings,
but it is also timely and important.
Those who work with her feel challenged by her high-performance
standards and expectation of excellence. She is not afraid to give
people negative feedback—and with humor, too. She pushes people
until they come up with a solution to a problem and does not take
“I don’t know” for an answer. For example, she insisted that her
team find an alternative to the expensive palm oil and did not stop
urging them forward until the alternative arrived: rice bran
oil.
Nooyi is well liked and respected because she listens to those
around her, even when they disagree with her. Her background cuts
across national boundaries, which gives her a true appreciation for
diversity, and she expects those around her to bring their values
to work. In fact, when she graduated from college, she wore a sari
to a job interview at Boston Consulting, where she got the job. She
is an unusually collaborative person in the top suite of a
Fortune 500 company, and she seeks help
and information when she needs it. She has friendships with three
ex-CEOs of PepsiCo who serve as her informal advisors, and when she
was selected to the top position at PepsiCo, she made sure that her
rival for the position got a pay raise and was given influence in
the company so she did not lose him. She says that the best advice
she received was from her father, who taught her to assume that
people have good intentions. Nooyi notes that expecting people to
have good intentions helps her prevent misunderstandings and show
empathy for them. It seems that she is a role model to other
business leaders around the world, and PepsiCo is well positioned
to tackle the challenges the future may bring.
Based on information from Birger, J., Chandler, C., Frott, J.,
Gimbel, B., Gumbel, P., et al. (2008, May 12). The best advice I
ever got. Fortune, 157(10), 70–80; Brady,
D. (2007, June 11). Keeping cool in hot water. BusinessWeek. Retrieved April 30, 2010, from
http://www.businessweek.com/magazine/content/07_24/b4038067.htm;
Compton, J. (2007, October 15). Performance with purpose.
Beverage World, 126(10), 32; McKay, B.
(2008, May 6). Pepsi to cut plastic used in bottles. Wall Street Journal, Eastern edition, p. B2;
Morris, B., & Neering, P. A. (2008, May 3). The Pepsi
challenge: Can this snack and soda giant go healthy? CEO Indra
Nooyi says yes but cola wars and corn prices will test her
leadership. Fortune, 157(4), 54–66;
Schultz, H. (2008, May 12). Indra Nooyi. Time,
171(19), 116–117; Seldman, M. (2008, June). Elevating
aspirations at PepsiCo. T+D, 62(6),
36–38; The Pepsi challenge (2006, August 19). Economist. Retrieved April 30, 2010, from http://www.economist.com/business-finance/displaystory.cfm?story_id
=7803615.
Discussion Questions
Indra Nooyi is not a typical CEO. How does she differ from your
idea of what a typical CEO is like? How do you think your current
image of CEOs was created?
Indra Nooyi is touted as being “unusually collaborative” for
someone in charge of a Fortune 500
company. Why do you think her level of collaboration is so unusual
for top executives?
Do you think Nooyi’s story represents a transition of American
companies to a different type of leader or simply a unique
case?
Pepsi-Cola dates back to 1898 and officially became PepsiCo
after merging with Frito-Lay in 1965. What are some challenges the
CEO faces today that were not an issue at that time? What are some
aspects that make the position easier in modern times?
If you were in Indra Nooyi’s shoes, what direction would you
take the company, given the success you have had thus far? What are
some challenges that could arise in the near future for
PepsiCo?