Indra Nooyi
Former Chairman and CEO, PepsiCo
Businesses are not inanimate things. Businesses interact with people, they change societies.
Summary
This week on "Leadership Matters," Alan is joined by the legendary PepsiCo CEO Indra Nooyi for a wide-ranging conversation about Indra's early life and upbringing in India, her incredible career before and at PepsiCo, and the advice she has for up-and-coming leaders across industries and disciplines.
Indra is renowned for her visionary leadership at PepsiCo and for spearheading the company's "Performance with Purpose" initiative. Well before ESG and stakeholder capitalism became part of the private sector's nomenclature, she sought to set up PepsiCo for decades of success by improving the company's performance on key environmental and sustainability metrics. In Indra's view, these efforts are not at all in competition with improved financial performance; they are part and parcel of a strategy that balances future returns for a company with investments in infrastructure that will keep it relevant for decades to come.
Since leaving PepsiCo, Indra has stayed deeply involved in several iconic corporate boards and in civil society leadership in her home state of Connecticut. She is a firm believer in the American Dream and the transformative opportunities the country has afforded her. In this next chapter of her life, she is now shifting her attention to how that Dream can be expanded to reach more individuals, regardless of where they come from.
Mentions & Resources in this Episode
Lights Out: Pride, Delusion, and the Fall of General Electric, by Thomas Gryta and Ted Mann
My Life in Full: Work, Family, and our Future, by Indra Nooyi
Guest Bio
Indra Nooyi is the former chairman and chief executive officer of PepsiCo. PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world and generated more than $63 billion in net revenue in 2017. With a product portfolio that includes a wide range of enjoyable foods and beverages such as Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana, PepsiCo generates more than $1 billion in estimated annual retail sales in 22 brands.
Mrs. Nooyi is the chief architect of Performance with Purpose, PepsiCo’s pledge to do what’s right for the business by being responsive to the needs of the world around us. As part of Performance with Purpose, PepsiCo is focusing on delivering sustained growth by making healthier and more nutritious products, limiting our environmental footprint and protecting the planet, and empowering our associates and people in the communities we serve.
Mrs. Nooyi was named President and CEO on October 1, 2006, and assumed the role of chairman on May 2, 2007. She has directed the company’s global strategy for more than a decade and led its restructuring, including the divestiture of its restaurants into the successful YUM! Brands, Inc. She also led the acquisition of Tropicana and the merger with Quaker Oats that brought the vital Quaker and Gatorade businesses to PepsiCo, the merger with PepsiCo’s anchor bottlers, and the acquisition of Wimm-Bill-Dann, the largest international acquisition in PepsiCo’s history.
Prior to becoming CEO, Mrs. Nooyi served as president and chief financial officer beginning in 2001, when she was also named to PepsiCo’s board of directors. In this position, she was responsible for PepsiCo’s corporate functions, including finance, strategy, business process optimization, corporate platforms and innovation, procurement, investor relations and information technology. Between February 2000 and April 2001, Mrs. Nooyi was senior vice president and chief financial officer of PepsiCo. Mrs. Nooyi also served as PepsiCo’s senior vice president, corporate strategy and development from 1996 until 2000, and as PepsiCo’s senior vice president, strategic planning from 1994 until 1996.
Before joining PepsiCo in 1994, Mrs. Nooyi spent four years as senior vice president of strategy and strategic marketing for Asea Brown Boveri, a Zurich-based industrials company. She was part of the top management team responsible for the company’s U.S. business as well as its worldwide industrial businesses, representing about $10 billion of ABB’s $30 billion in global sales.
Between 1986 and 1990, Mrs. Nooyi worked for Motorola, where she was vice president and director of corporate strategy and planning, having joined the company as the business development executive responsible for its automotive and industrial electronic group. Prior to Motorola, she spent six years directing international corporate strategy projects at The Boston Consulting Group. Her clients ranged from textiles and consumer goods companies to retailers and specialty chemicals producers. Mrs. Nooyi began her career in India, where she held product manager positions at Johnson & Johnson and Mettur Beardsell, Ltd., a textile firm.
In addition to being a member of the PepsiCo Board of Directors, Mrs. Nooyi serves as a member of the boards of Schlumberger Limited, The Consumer Goods Forum, Catalyst, Lincoln Center for the Performing Arts and Tsinghua University. She is also a member of the Foundation Board of the World Economic Forum and the American Academy of Arts & Sciences.
She holds a B.S. from Madras Christian College, an M.B.A. from the Indian Institute of Management in Calcutta, and a Master of Public and Private Management from Yale University. Mrs. Nooyi is married and has two daughters.
Clips from This Episode
Indra describes her experiences as a woman in the business world
Indra discusses the importance of adaptation when working in a management position
Indra explains how a background in science can help executives in the business world
Episode Transcription
Alan Fleischmann
Today I'm joined by a truly groundbreaking leader. Indra Nooyi has been one of the most recognizable and powerful business leaders in the world, and she's used that position to shape the movement for socially responsible corporations.
Indra is the former Chairwoman and CEO of PepsiCo, the food and beverage giant with a presence in nearly every country on Earth. Indra served an impressive and successful 12 years as Pepsi's chief executive. During her tenure, she led the company through numerous corporate restructurings that cemented its market dominance and billions of dollars in annual profit growth. Something I'm looking forward to discussing today is Indra’s creation and stewardship of PepsiCo’s Performance with a Purpose initiative. That ESG campaign was groundbreaking and has served as a model for countless other companies. Even having left Pepsi, Indra Nooyi remains incredibly active on a wide variety of fronts. There's so much to cover about her extraordinary life and career, and I'm looking forward to diving in.
Again, this is Alan Fleischman on “Leadership Matters,” and I'm thrilled today to welcome an outstanding leader, in Indra Nooyi. Again, thanks for joining us.
Indra Nooyi
Alan, thank you for having me.
Alan Fleischmann
It’s so wonderful to have you. A little bit about your background and upbringing: you were born and raised in Madras, India, a city which many of our listeners will recognize now as Chennai. You've spoken a lot in the past about how your family and upbringing shaped your leadership. What was life like around your house growing up?
Indra Nooyi
Well, I grew up in a very simple, conservative family. Remember, I was born eight years after India got independence and India had been under occupation for 350 years. So this is a new country, everybody's experiencing freedom, independence. It's a new experience for everybody in the country. But I'm a young kid born into free India, into a progressive family who basically believe that women should be educated and be allowed to dream and soar, that they shouldn't be held back because of the agenda. The men and the women felt that way.
At the same time, they were also bound by societal expectations that women would get married at the age of eighteen. So, there was this funny foot on the brake and foot on the accelerator. But I think the accelerator always won out, because the family felt that if the girls are smart, they want to study, and we can give them the right push, why not let them contribute to the country too? Let's not hold them back. The country needs all the brains.
So we were allowed to study, go to college, go to university, get a master's degree, work, and do all the extracurriculars along with it — climb trees, play in a rock band, play cricket. Everything that was sort of breaking the barriers for women, I did them all and I was never ever stopped from doing them. I was asked to have all that freedom within a frame, so there was some discipline. I think I am in many ways, Alan, a product of my childhood, in my opinion.
Alan Fleischmann
How many brothers and sisters did you have?
Indra Nooyi
One older sister and one younger brother. I’m the middle child.
Alan Fleischmann
That's great. And did your sister feel the same as you did, your older sister?
Indra Nooyi
She was actually the person who set the pace for me. She was brilliant. She went to business school first in India, at a point when the family didn't even know what business school was. She did the impossible by getting in, because it was impossible to get in — they admitted only five or six women in a class, because it was constrained by the number of rooms available for women. So my sister applied and got in, she was always a brilliant student, a great musician. Then she came to the US, joined McKinsey, became a partner, and then went on to do her own thing.
My kid brother was actually the brains of the family. He was eight years my junior, but absolutely brilliant. He’s the only kid who's ever come first in the state, in the state exams, in both the 10th grade and the 12th grade —that feat has never been repeated. And then he came to Yale, did his undergraduate, and then did his MBA and PhD at MIT. Now he's off doing his own thing.
Alan Fleischmann
What about your mom and dad? What did they do?
Indra Nooyi
My dad was the internal auditor for the state bank. One of my grandfathers was a judge, the other grandfather was a lawyer. My mother would have been a CEO had she been allowed to study. She's just one of these brilliant, driven, organized women, but our society didn't give her the chance. So she kept home, and she ran the home with an iron fist.
Alan Fleischmann
She made sure everybody else produced.
Indra Nooyi
Totally, yeah.
Alan Fleischmann
I love that.
So, you completed your secondary education at an all-girls Catholic school, where you were a member of an all-girls rock band, as you just mentioned now. Is that right? Tell us a little bit about that and your other extracurriculars that you did.
Indra Nooyi
You know, I was in a Catholic school. We wore uniforms, Irish nuns ran the school with an iron fist — a very disciplined school, fantastic education. The dedication of his Irish nuns to all of us in Madras was just spectacular, so I owe them a huge debt of gratitude.
But a young girl transferred in — she was the daughter of an army colonel — she transferred in and she was playing the guitar. And, you know, we all loved Western music growing up; we would get one hour of Western music every week, and we would glue our ears to the radio, listening to all the music. Then Mary shows up, she starts playing the guitar, and we become fast friends. And then as luck would have it, I don't even know how this happened, we find an old guitar in a closet in school. The school didn't know it existed, I almost feel like it was meant to be. And the nuns said, “We'll help you fix it” — which again, I don’t know why they allowed us to do it, I have no idea. It's like, coincidences and happenings just happened at that time, and we got the guitar fixed.
Mary taught me to play a few chords. We joined up with a couple more girls, and we were the first all-girls rock band in in Madras at that time. Maybe in the country, because they weren't any all-girls rock bands. Here we were, we had five songs we played. We played them, I would say in retrospect, pretty badly, but performance-wise it was spectacular. Every show was sold out.
Alan Fleischmann
How often did you perform?
Indra Nooyi
We weren't allowed to perform too often, because we had studying to do, exams to prepare for, household chores. So I'd say in the year and a half that we were together, we must have performed about 10 times. Mostly at school events, or the local college, they would invite us and we would go along.
Alan Fleischmann
That's so exciting. You know, there's this great, consistent connection between music and science. And the fact that… You broke a lot of standards, you were the first doing a lot of things. I imagine, being a young woman pursuing science, which you ended up doing at the University of Madras, must have also been rare at that time as well. It's rare now. So I imagine you were different. But the fact that you loved music, science, and math, there’s a connection there.
Indra Nooyi
Everybody in my family was a musician of some sort. Music was part of the lifeblood of our family. South Indian classical music was blaring from the radio 24/7 in our house. My sister was a gifted singer. I've got cousins who are, and my mother is a gifted singer. So music was part of our life.
Interestingly, contrary to current patterns, in India at that time women mostly studied science or mathematics. Women rarely worked, but if they went to work, they could work in a laboratory, or they could work with a doctor, or become doctors themselves. It was always science and technical professions. They worked with atomic energy, they worked in university laboratories. So those were considered prestigious positions for women.
What women did not do in those days was go into business.
Alan Fleischmann
But you did.
Indra Nooyi
I went into business, yeah.
Alan Fleischmann
You studied science at first at the University of Madras, and then you earned an MBA. Like your sister, I guess. Did she also go to the Indian Institute of Management in Calcutta?
Indra Nooyi
I went to Calcutta, she went to Ahmedabad. So she was on the West Coast, I was in the East Coast.
Alan Fleischmann
What was the turning point that made you say, “I want a career in business?”
Indra Nooyi
Well, because she got into Ahmedabad first — she's a year older than me — it was so prestigious, I realized that if I didn't get into the other school, I'd be viewed as a failed sibling. So the pressure was high. We were intensely competitive, the two of us. So from my perspective, I had to get in to Calcutta, because she didn't want me anywhere near her. She said, “We went to school and college together. I don't want you anywhere near me anymore,” which was fair.
So I applied to the one in Calcutta, which was affiliated with MIT, very quant-oriented. I was terrified that I may not get in, because I didn't want to be viewed as a failed sibling. Fortunately, I got in and the rest was history.
Alan Fleischmann
And you did this a year apart from one another.
Indra Nooyi
Exactly a year apart.
Alan Fleischmann
You two as sisters, did you do a lot together when you were an undergrad, when you were in college?
Indra Nooyi
We had the same bedroom, we had the same bed and slept next to each other. We fought all the time, all the way through high school. And then, when she went to Madras Christian College, she studied commerce. I studied chemistry, physics, and math. So our paths never crossed, because our schedules were different and I had all-day laboratories.
Also, I hung out with the nerds. She hung out with the cool people. So even if she saw me, she never acknowledged that I was her sister.
Alan Fleischmann
She did not.
Indra Nooyi
Not a chance. And then she went off to Ahmedabad, I went to Calcutta, and then our paths diverged. But now she's in New York, so our paths converged again.
Alan Fleischmann
Do you see each other now?
Indra Nooyi
Yes, yes.
Alan Fleischmann
That’s wonderful.
You worked for several years after your MBA at a textile company. And then you went to Johnson & Johnson? Is that what happened?
Indra Nooyi
Correct. I started with a British textile company. It was fantastic, because I learned everything about textiles — sales, the weaving machines and spinning machines, how it all works. I studied the business ground-up, which is just a great way to get to know the business. I started selling thread, that was my first job when I graduated. Then I started to sell textiles. I was a product manager, I had to understand printing, dyeing, the different density of fabrics. So I'd walk the manufacturing lines all the time.
The only reason I left that company to go to J&J is because there was a massive strike of textile workers in the south of India. So we couldn't produce anything, there was nothing to sell. J&J at that time was looking for a product manager to launch Stayfree. They reached out to me and said, “Could you come and work at Johnson & Johnson?” So I moved from Madras to Bombay to work for Johnson & Johnson.
Alan Fleischmann
Was it easy to travel, to move into different cities, as you had done in those years? In India, was that hard to do?
Indra Nooyi
Well, you know, you have to be careful, because then girls never lived alone as such, because that was not considered okay. When I lived in Madras I lived with my parents. It would have been taboo to live by myself, that was just unheard of. When I went to Bombay, I stayed with my uncle and aunt. And then, because the commute was too long, there was a system in Bombay called the Paying Guest Accommodation, where a family in Bombay will rent out one room for you. But they would say, “You have to be home by seven. You can't stay out late. You can't drink.” I mean, they will put all the rules in. In turn, they'll give you a meal a day and give you a room with an attached bath.
So I rented one of those rooms close to the office. It was with a wonderful family who were very disciplined, very strict. If I was coming late from out of town, I'd have to tell them what the train arrival time was, what time I would get home. And if I was later than normal, I’d have hell to pay. That's what gave my parents comfort, that I was not going to run off and do things that would bring shame to the family when I was in Bombay.
Alan Fleischmann
And did the Johnson & Johnson job require travel?
Indra Nooyi
Yeah, it required a lot of travel. But always by train — this wasn't any fancy flying. Because the airline industry was still nascent in India at that time, it was mostly by train. We just did it; there was nobody to compare ourselves with and say, “These people are flying, why am I going by train?” We just took the train, just schlepped your way through every city that you had to go to, and you just did it.
Alan Fleischmann
Did you enjoy the job?
Indra Nooyi
I loved the job. Because in those days, you couldn't advertise personal products on television. You couldn't really display it on the store shelf. So if you wanted to buy sanitary napkins, for example, you'd go to the store, wait until everybody cleared out, and then you'd go to the storekeeper and say, “Can I have some personal products?” And he’d give you this funny smile, then he’d reach down, wrap it in newspaper, and give it to you. That's how it was sold.
So we had to educate people why they should use professional, packaged products, as opposed to homegrown stuff. We gave them freedom. So there was an education task. I felt that the job had a sense of purpose, Alan. I was giving women freedom. I was giving women the ability to be whoever they want, because this thing, their periods were not going to tether them to the home. And I felt just a great feeling of purpose,
Alan Fleischmann
Giving independence, inspiring others to see the world differently.
What lessons did you learn in those early years that stuck with you, during the Johnson & Johnson period particularly?
Indra Nooyi
Through all the jobs, you have to learn every job from the ground up. Don't think, just because you come in at the middle-management level, that you're just a big shot. If you don't understand every job and how whatever decisions you make are going to impact the frontline, you've actually failed. So the fact that I was a salesperson, that I worked in the manufacturing line — spinning, weaving, dyeing printing — gave me a unique appreciation for how businesses actually execute. And that no job is menial. It doesn't matter what your title is; every job is important, it's a cog in the wheel. And I like that.
The other, which my grandfather said, “If you commit to doing something, you commit to deliver on time.” And I don't care — unless you're dead, in which case it's understandable — as long as you're breathing, just deliver what you promised on time. So to me, I took commitments and deliverables very, very seriously. And reliability. If I told somebody I was going to deliver something, I did it. On schedule, perhaps ahead of schedule, never late. And I did it to the best, best, best of my ability.
Alan Fleischmann
That's great. And you understood that role you played mattered?
Indra Nooyi
Sure.
Alan Fleischmann
Was Johnson & Johnson well known at that point in India? Did you realize the bigger, global company that you were involved in at that point?
Indra Nooyi
Oh, it was very well known. Johnson's baby powder, Johnson's baby shampoo. All these were just epic products in India at that time. Carefree had been launched, Stayfree was being launched. Johnson & Johnson has beautiful offices in Bombay with beautiful lawns, unusual for Indian companies. It was considered a blue-chip company, gold standard.
Alan Fleischmann
That's great. So how long were you there altogether?
Indra Nooyi
I was there for less than a year because I came to the US.
Alan Fleischmann
And you came to the US for Yale?
Indra Nooyi
Yeah. When we were growing up in India, the US was always the beacon of everything. Hope, innovation, entrepreneurship, excitement, culture, music — you name it. The little we got from the US, in terms of radio programs, Voice of America… we would listen to Voice of America every day, morning, afternoon, and evening. We went to the US Embassy library and spent many, many hours reading books and magazines. We were absolutely enamored with the US.
I was wondering, how would I come to the US and really experience the country? Yale had just opened its business school. It was not a traditional MBA, but a way of linking the public and private. Talking about companies as being part of a society and what do you need to do to run a company, while at the same time, very cognizant of the society around the company. So I thought it would be a fantastic way to expand my horizons.
And the reason I did that, Alan, was because when I went to business school between 1978 and 1980, I was 18 years when I went, and I graduated from business school when I was 20. Because I graduated from high school when I was 15 and graduated from college when I was 18, and straight on. So I was awfully young to be doing all that. So once I worked two years, I had a better appreciation for business, and better appreciation of the interaction of business and society. So coming to Yale was… Think of it as a finishing school for me. I learned everything about business the way it should be learned, about the interaction of business and society. And Yale School of Management was brand new at that time, it was just a spectacular place to be a student.
Alan Fleischmann
And they really did focus on the management side of business as well, the internals, which I think set them out from day one as different than the other business schools. That's great. And you loved it, it sounds like, based on your voice.
Indra Nooyi
It was just life changing for me. Yale has been such a big part of my life — gave me the wings, gave me credibility, gave me the credentials, and was always there for me if I needed them. I will never thank Yale enough.
Alan Fleischmann
Did you think when you went to Yale that you’d come back to India? Or was there a part of you that just knew you were about to embark on a journey in the United States that was going to lead you to the United States?
Indra Nooyi
That's a tough one. Because what you do is, in the early days after you graduate from Yale, you have one foot here and one foot in India. You're still confused where is your place going to be. As you get more comfortable working here, as you get positions of higher and higher authority, one foot comes off India and both feet start to get planted here. So you go from the spirit of confusion and straddling to saying, “Hey, I think I know my place. I belong here.” And this is an unusual meritocracy. And, you know, I'm just privileged to be here.
Alan Fleischmann
So you went to BCG, right? You went to Boston Consulting Group. I know Motorola played a role there as well, and then ABB — I’m curious about that journey.
And again, are there things you took from Yale that made you realize, I'm not going to do what I was doing at Johnson & Johnson? I'm not necessarily going to do science, which is where my undergrad was. But I want to get more involved in the mechanics of running a business, the mechanics of corporations.
Indra Nooyi
It’s interesting. If you have a good scientific background, it's actually easier to be a business person. Because any assignment I did at BCG required understanding the business. And if you understood the science behind the business, if you understood how to ask the questions, how to dig deep into the physics, the chemistry of anything from making paper to making chemicals, you understood the value drivers of the business. Much quicker than if you said, “I don't understand the business, I don't need to understand the business, I just need to understand the financials.”
So from my perspective, my old learnings didn't stop. Anytime I started with a client, I always walked the shop floor. How was the product made? What are the value drivers in the business? I went down to details. I zoomed in before I zoomed out. And I think that's a very valuable lesson for everybody. Always zoom in and zoom out. As you develop value-creating solutions, you have to go to the zooming-in and zooming-out phase constantly.
Alan Fleischmann
I love that. When your sister went to McKinsey — I'm now realizing this — you went to BCG. There's a little bit of that dynamic here.
Indra Nooyi
Oh, you bet.
Alan Fleischmann
You chose not, I guess, to go to the same place yet again. But I imagine, when they were recruiting at Yale, you were being recruited by all of them, all of the management consultancies.
Indra Nooyi
McKinsey said to me, “McKinsey is big enough for both of you.” I said, “No it's not, we've been together all our lives.”
And also, in those days, BCG was the father of strategy. All the strategy consulting originated from BCG and we studied it in school. I was completely and totally enamored by everything BCG was doing, which I thought was just real solid strategy. So the fact that my sister was already in McKinsey, and the fact that BCG was a strategy house, I decided I was gonna go all-out in my interviews with BCG.
Alan Fleischmann
I love that. How was that experience for you when you got there? Was it everything you thought it would be?
Indra Nooyi
It was unbelievable. I’ll tell you, in my six and a half years of BCG — I would have stayed much longer had I not been in this car accident — I think I learned what normal people learn in 15 years in corporate America. The people there are extraordinarily smart. So you learn from them, you learn from your clients, you learn from the different industries you look at. You learn how to develop frameworks, you learn to be brutally objective, and to analyze issues, as opposed to figuring out the politics right off the bat.
So BCG taught me so much, that even today, I keep these lessons, Alan. Because you don't hire BCG for just a new pair of eyes. You hire them because they have a framework to think about a business. The way they teach frameworks is what stands me in good stead today.
Alan Fleischmann
That's great. Did you have to do a lot of traveling when you were at BCG?
Indra Nooyi
Oh, constant. All the time. There wasn't a week that I wasn't traveling.
Alan Fleischmann
Were you building a family at that point?
Indra Nooyi
Yeah, I was married. Literally, the day I graduated, the next week I got married. We had a child, and I was in BCG at that time. BCG gave wonderful paid leave, benefits, maternity care, everything. They treated you very well. I mean, it's a gold-standard company for how they treat their employees.
Then I was in this car accident in 1986. I was coming back from a client in downstate Illinois, I was at a four-way stop sign, I was going to make a left turn into a divided highway. I put my turn signal on to turn, I thought the coast was clear. The next thing I knew, I woke up in intensive care. So I was incapacitated for a good six months. In that period, I decided I couldn't travel for a while, because my hip was broken, I had a concussion in the brain. I had many issues. I didn't think I would come back to be totally normal, but I did.
Motorola literally hired me while I was still on a walker. And I was at Motorola for four years, worked for this German guy called Gerhard Schulmeyer, whom I adore. He was just the toughest boss, but he taught me so much. Gave me tailwinds, gave me wings to fly, gave me confidence, told me I could be anything. You would think it unusual for a German person to do this with an Indian lady, but he believed only one thing: as long as you work hard and you're talented and you want to contribute, I'm going to push you. And he did. Even today, I would say he remains perhaps the biggest mentor I've had in my entire life.
Alan Fleischmann
Wow. And he recruited you for the job?
Indra Nooyi
He recruited me to Motorola. And then when he left to go to ASEA Brown Boveri, he made my life impossible, remaining at Motorola, so I had to go work with him at ASEA Brown Boveri. It was not just Gerhard, he and his wife both helped us. We were renovating a home in Greenwich and we didn't know what renovations of a wooden home were — we grew up with concrete homes. His wife knew everything about home renovations, so she would help the home renovation, I would go off and be working on ABB, and Raj would be traveling. So I think that this was two families depending on each other. It was mentorship to an extreme, I’d say.
Alan Fleischmann
So this is family, they became family.
Indra Nooyi
In a way, yes. He was still my boss, so it was a level removed. But he was always there. Always.
I mean, I'll give you one simple example. If there was a snowstorm — especially when I was pregnant with my second child — he would call or his driver would call me and say, “You know, Mrs. Nooyi, please don't drive to the office. We will pick you up on the way to the office.” And they would swing by, pick me up, take me to the office, and then bring me back home, because he was afraid I would slip and fall on the ice if I tried to drive myself. To me, that level of attention and care, I've never had from anybody else. I mean, I've had it in different ways, but Gerhard Schulmeyer took the cake on this.
Alan Fleischmann
And did he stay in your life?
Indra Nooyi
Oh yeah, he lives in Greenwich too.
Alan Fleischmann
So you’re still in touch.
Indra Nooyi
Yeah. After ABB, he went on to do other things. I came on to PepsiCo, and then we didn't really interact regularly. But I keep in touch with his kids, I see him. Let me put it this way — the gratitude I have for him will remain deep, and forever in my mind.
Alan Fleischmann
Well, there are two things you mention. The power of mentorship is something we talk about on the show a lot. I believe that it's a way that everybody can credit somebody, or somebodies. It could be your parents, it could be teachers, professors, but certainly bosses along the way, who can change your life. And the fact that he had very high standards, and he was difficult — they’re usually the ones you learn the most from.
Indra Nooyi
I mean, difficult is an understatement. People hated working with him because his standards were so high. I liked working with him because his standards are so high.
It's interesting — if you showed him a document and he didn't like it, you could tell from his face that he thought this work was terrible. I would immediately pull it and say, “Let me come back to you,” because I could read when he was agitated about the quality of the work. So by working with him, my whole approach to analyzing a problem in business improved. So, it was a good learning experience. I wish more people had mentors like Gerhard.
Alan Fleischmann
People are afraid to be tough and to hold people to high standards, to hold them accountable. And actually, that's a lost opportunity for people as they grow.
Indra Nooyi
I agree.
Alan Fleischmann
Working hard and playing hard are great combinations, but working hard with high standards is probably the best one.
You're listening to “Leadership Matters” on SiriusXM and leadershipmattersshow.com. I'm your host, Alan Fleischmann. I'm here today with Indra Nooyi, the former chairwoman and CEO of PepsiCo, and we're discussing her journey, her life, and some of the great lessons in life that she's learned along the way.
So you ended up joining Pepsi in 1994. And that must have been hard, I guess — to imagine, you left your mentor at Motorola and ABB, that was a hard decision. Was that something that you just saw as a great opportunity? That was to be Senior Vice President for Strategic Planning, which is really a combination of all the things you did.
Indra Nooyi
Gerhard left ABB to become CEO of Siemens Nixdorf, he moved to Germany. And I was not going to follow him again, because when I left Motorola and came to ABB, as the CEO of Motorola told me, I left an institution for an individual. Okay. I did not want to leave another institution for an individual again. Although I came to work for Gerhard at ABB, I now wanted to work for an institution, period. And when Gerhard was going to Germany, I decided I was not going to go to Germany, I was staying put, because we lived in Greenwich and PepsiCo was in Purchase. I didn't even know PepsiCo was in Purchase until they interviewed me, because I had never been down that road.
My choice was between GE and PepsiCo. The PepsiCo culture won me over. Because had I gone to GE, Alan, I would have been working for the individual, Jack Welch. Coming to PepsiCo, I was now working for an institution.
So I came to work for PepsiCo, I was head of corporate strategy. Pretty soon I became CFO, in about four years, and then I became President and CFO In 2001. Then I became CEO in 2006, Chairman and CEO in 2007. And my career just went on after that.
Alan Fleischmann
And you were pretty much a first in the women category yet again, I imagine, for each one of those promotions. Or at least, among the first.
Indra Nooyi
PepsiCo had Brenda Barnes, who was running Pepsi-Cola North America. A phenomenal lady, but she was out in a division. In the corporate offices, I was the first woman in such a senior position.
It was interesting, because, while we talk about the fact that all the positions in the senior executive ranks were held by white males, that was not unusual to PepsiCo. That was what all of corporate America looked like. It's just that PepsiCo was much more progressive in saying, “Hey, we need more diversity.” Their appeal to me was, “We need somebody like you to come in and shake things up. You're a global thinker, you're a different thinker, and you will really bring great value to PepsiCo.” So PepsiCo viewed me as an asset that would come and bring much needed sensibilities and sensitivities to the company.
Alan Fleischmann
And you were involved in major acquisitions, major mergers too, right?
Indra Nooyi
Everything. From 1994 to 2000, it was some of the biggest transformational moves: spinning off restaurants, getting rid of bottling lines, buying Tropicana, buying Quaker Oats, divesting all the casual dining. Oh, my God, this was nonstop activity.
Alan Fleischmann
Yeah, and reprioritizing. I mean, imagine, you use a lot of your BCG training at that point.
Indra Nooyi
Absolutely, yes. I mean, BCG training, Motorola training, ABB training. Because you apply the BCG frameworks in all those industries. So you've come to PepsiCo, you now know how to look at any industry and quickly sort out what the value drivers are, what levers you need to pull to create value. So it comes to you intuitively.
Alan Fleischmann
Now, is it true that, when you became CEO in 2006, that you were the first immigrant to the United States to become a CEO of a Fortune 50 company, and you were the first woman?
Indra Nooyi
No. I was the first… the first woman to be CEO of a Fortune 50 company…
Alan Fleischmann
Katherine Graham?
Indra Nooyi
Of fortune 50 company — Katherine Graham was not a Fortune 50 company. I wasn’t the first woman CEO of a Fortune 50 company. But I was the first immigrant woman to be a CEO, of any company.
Alan Fleischmann
Wow, amazing.
Indra Nooyi
That, to a person of color… You know, there were a lot of first at that time. In retrospect, Alan, all of that hits me. When it happened, you're just like, “I gotta run this company.” Forget this immigrant, woman of color, all that stuff. Forget all that. I’ve got a job. I’ve got to focus on making sure this phenomenal company that's been handed to me in pristine condition remains pristine. So, my fear level went up, because it's a responsibility of such magnificent proportions. It's really unbelievable.
Alan Fleischmann
But it is stunning that those firsts happen in this century, in 2006. Remarkable about you and remarkable that it's so recent still.
Indra Nooyi
In ’94, when I joined PepsiCo, there were no women CEOs. In 2006, there were six or seven women CEOs, but they were running smaller companies. By 2022, today, there's 44 women CEOs. So still 8% of the Fortune 500. But it's progress, some progress.
Alan Fleischmann
Absolutely.
You've talked about the professional and personal challenges of being a woman leader in corporate life, in corporate America in particular. What sorts of approaches and strategies did you use to overcome those challenges while at Pepsi?
Indra Nooyi
Well, there's many kinds. Let me start with the professional. In the professional side, there weren’t many women, people were not used to dealing with women. There was a lot of unconscious bias — people talking over you, people sort of rolling their eyes when you talk. There used to be a lot of bro gatherings, men going away for golf outings, or fly fishing, or horseback riding. I don't golf. I don't fish. I don't eat meat. I don't drink. So you can imagine what boring company I would be. But the great news is, Alan, I never got invited to those weekends, which is the best thing that happened, because I don't do any of these things and I have kids at home, a husband at home. So to me, I was counting the minutes to go home to my husband and kids, because they needed me.
So in today's terms, you’d say that many of the women felt excluded. In my case— for two reasons — I didn't feel bad. One, because I had other commitments I had to run to. But more importantly, I had a boss — Roger Enrico, who was CEO of PepsiCo at that time — who basically told the guys, “Hey, we're all out here, fly fishing and horseback riding. We will make no business decisions, because if we do, Indra will have my head on a platter.” Because my agreement with them was, you do whatever you want. But don't make business decisions with the guys at your men's conclave and then come back and tell me it has to be implemented. Because I ain’t doing it. I want to be part of the decision making.
So I felt very supported by my CEO, who basically said, “We're not making any decisions unless Indra is involved.” So I had that confidence, Alan, that I wasn't being left out. I was being given the time to focus on my family.
Alan Fleischmann
And how many kids do you have?
Indra Nooyi
I have two daughters. When I was in PepsiCo, they were young. So I was spending time with them, trying to juggle homework, all of this stuff.
On the professional side, I went through all the stuff that people went through, except I looked at it as, that's what it takes from people who are breaking barriers, to go through. So I can’t sit here complaining about all of that. I had to just draw attention to it when I was in a position of power and try to change things. But I recognize that some of this unconscious bias happened around me. And I had bosses who put an end to it. If somebody talked over me, they would say, “Hey wait, let her finish.” If people rolled their eyes at me, they said, “Do you have a problem?” So I had very supportive bosses who sort of addressed issues for me, and I did it in turn when I was in a position of power.
On the personal side, juggling home and family was never easy. I had a big support system, between family members, nannies, neighbors, everybody, all helping. Most people don't have that support structure. My husband was my biggest support system. There are many people who don't have families, who don't have a supportive spouse, or don't have a spouse at all and are desperately trying to juggle all these priorities. For them, if we don't provide some structured support structure, it's not possible to have children and keep a job.
Alan Fleischmann
What did your husband do during those years?
Indra Nooyi
He was a partner in a consulting firm. So he was traveling a lot, a lot. He was gone five days a week. But we had family that always stepped in and said, “Don't worry, we'll manage things for you.”
Alan Fleischmann
Just remarkable, wonderful.
Indra Nooyi
I couldn't have done it without all of them. The other thing is, my in-laws believed that I should keep working, which is very unusual. They always said to Raj, “We're proud of what she's doing. Let her keep doing it, we will help in every which way possible.”
Alan Fleischmann
Did any of them imagine, did you imagine, at that point, that you one day would become CEO of Pepsi?
Indra Nooyi
Never. Never. I mean, that was not even a glimmer in my eye. I just wanted to do the job I was doing well and keep going.
When Roger walks in my office in ’99 and said, “I'm gonna make you CFO next week,” I'm like, “Whoa, I want to think about this.” He said, “Well, what's there to think about?” I said, “Look, I want to think about whether I want this added responsibility.” And I said, “Give me a week.” He gave me four days and he walked into my office one day and said, “Hey, have you finished your thinking on the CFO job?” I said, “I told you, I wanted a week. I'll tell you on Monday.” He just looked at me and said, “Get your ass in the CFO office, I’m announcing you tomorrow.” I said, “Okay, fine, sure.”
So it's not that I was saying, well, the CFO job was kind of big and I want it. Absolutely not. I just wanted to do a good job with what I was doing. It sounds incredulous, but that's how I was.
Alan Fleischmann
It sounds like you were as other you very much focused on doing excellently in the moment.
Indra Nooyi
There was so much to do for the company. I just wanted to contribute.
Alan Fleischmann
And then, the culture sounds like it was also so perfectly fitting with what you were about.
Indra Nooyi
It was a phenomenal company, Alan.
Alan Fleischmann
So there was this Performance with Purpose, this this hallmark sustainability initiative that you led at Pepsi. It obviously has an enormous impact, even today, that you did this. You pushed sustainability on all fronts, not just the company's environmental footprint, but also the health impact of your products. The culture within Pepsi was also a big part of it.
I think of you as somebody who is confident, but exudes enormous humility, no arrogance at all. That's because you seem to be a grateful leader, somebody who appreciates the stakeholders you have in your life. I'm just so curious… All that was groundbreaking. It still is groundbreaking, actually. What inspired you to launch the initiative? And does that define what you were thinking and what you were hoping to do at that time?
Indra Nooyi
That's a great way to frame the question, Alan. It's interesting, when I was doing Performance with Purpose, I was doing it because I inherited this very successful company. I was president of that company and my CEO was a great guy, Steve Reinemund. We've come off years of great performance, now I’ve inherited this great company. The first thing that occurs to me is, I've got to make sure this company stays successful for the next two decades. Not just during my time as CEO, because I've no idea how many years I'll be CEO. But I got to make sure this company is rock solid for the next two decades.
So I look forward at the megatrends that are going to impact the company. And I'm seeing all these storm clouds collect. The health and wellness push, the attack from the environmental policing — too much water is being used, too much plastic being generated. And the young people, wanting to go work for consulting, or the financial industry, or high tech, and questioning the purpose of companies. So I'm sitting back and saying, “I have to future-proof this company. We have to make sure that we understand where the puck is going and skate towards that.”
So, the megatrends work yielded the portfolio transformation — activities that needed to be done, all the environment initiatives we had to focus on, and what we needed to do about our people. But the time was such that, if you didn't deliver performance, you'd get killed. So the question is, how do you judiciously balance performance with all the stuff we had to do to change the company? And that's why Performance with Purpose was born. It was always about performance. But the purpose part was transforming the portfolio to offer nutritious products, in addition to the treat products we were offering; Be much more water conscious, worried about the plastics we put out in the landfills, our greenhouse gas emissions; and most importantly, treat our people as talent, not as tools of the trade. Treat them with great respect, create an environment where they could bring their whole selves to work, and treat them with great respect.
So when you took the two together, performance and purpose, it was a virtuous circle. Without purpose, you couldn't deliver performance. Without performance, you couldn't deliver purpose. And as I said, always, this was not corporate social responsibility, where we gave away the money we earned. It was about a new way to make money. When we were doing Performance with Purpose, when I first articulated and started to do it, there was no talk of ESG. That was not even in the framework. I was doing it because I grew up in a water-distressed city, so I know the value of water. I saw plastics everywhere on the road and landfills, it used to make me cringe. I noticed that people's eating and drinking habits were changing radically and I didn't want to be caught flat footed. So I was doing it out of a deep concern for the company and its impact on society. So this is the coming together of business and society, as Yale taught me.
Alan Fleischmann
The values proposition is a huge part of this. I could think of the strategy, that the person who was hired to be head of strategy, that person at BCG — when I think of all the different things you did, you were thinking around the corner, where my vulnerabilities are, where are there opportunities. Now, you might say it’s stakeholder capitalism, ESG. We speak about it. But if anyone talked about ESG at that point, it was something that was antiquated already, on the shelf again.
Indra Nooyi
In those days, they were killing me. They were saying, “Who the hell are you, Mother Teresa? Why do you have to do this? Just focus on making money.” I said, “I'm going to make money. It's not that I'm not going to make money. I'm just going to balance level and duration of returns.” What I don't like, Alan, is the boom-splat. You run and run for a few years, and then you take a big reset in your financials. I didn’t want that. I wanted to judiciously balance the level of returns and their duration. I wanted to reinvest in the company.
In a way, I think that's the job of boards and CEOs — to make sure that you reinvest enough in the company. Give short-term performance to investors, but keep reinvesting to keep these big iconic companies that give you sort of a debt-like return with an equity kicker. So that pensioners have the safety of these stocks.
Alan Fleischmann
Which is amazing. You also brought in experts and stakeholders. You were very conscious of the fact that stakeholders were changing also, right? Your employees were looking at the world differently. They were younger, they were thinking about economic and environmental challenges. Your investors were probably thinking differently, and you were very conscious of that. It doesn't mean people take action when they notice their stakeholders, but you did. But you brought in experts and stakeholders to be part of the design process.
Indra Nooyi
The funny part is — and maybe you have an answer to this, Alan — very often, people change their own eating and drinking habits when they don't like plastics in the landfills or they don't like too much water being used, especially if they live in a water-distressed area. They hate the fact that their children don't eat and drink healthily when in school, so they restrict what they give the kids in school. And then they go to work and they say, “No, let's just push more treat products,” or “Let's not worry about the environment.”
I think you've got to worry about the moral core of your life and the moral core of your livelihood coming together. What it reminds me of is, a lot of tech executives in Silicon Valley don't allow their kids to interact with devices until they're much older. It’s the same thing. Why is that? So to me, it was the same. It's not that I will ban you from tech. I want to see how to give you limited time with tech and make you go out and play and run around a little bit more. That was my portfolio transformation.
Alan Fleischmann
That's amazing. You really did, though, design something that had a lot of voters. That idea of sharing responsibility, sharing the creation of it, which is important. It made you a worldwide leader, you are recognized as really one of the great leaders in corporate social responsibility. The fact that you focused on it, it also sends a message. It's not a marketing program that can be buried somewhere within the bureaucracy. The fact that you, as a prominent global CEO, said “this is a priority,” it changed the way people saw CSR, which led to ESG, which kind of became the conversation on stakeholder capitalism.
What advice would you give to leaders who are now at just the beginning of their companies’ own journeys on sustainability, social issues, and good governance?
Indra Nooyi
I'd say, always link it back to shareholder value. Sometimes what people say is that there’s shareholder value and ESG as two separate metrics. In many ways, if you pick the right ESG metrics, you're actually focusing on de-risking the company, because if we don't focus on certain social issues or governance issues, it’s going to come back to bite you as a company at some point in the future.
One of best examples I was reading was Lights Out, the book on GE. At a time when GE dumped all those chemicals in the Hudson River, somebody had to come back later and clean it up. So had they focused on those issues, clean it up while it happened, or not even let it happen in the first place… So I come back and I say, focusing on ESG, the right ESG metrics, is de-risking the company, which is shareholder value creating. So I would always say, look at the shareholder value consequences of ESG. Don't just put in metrics for the sake of putting metrics in. Always personalize the issue; ask yourself, if you are a citizen in this community, how would you view the company? If you were a user of this product, how would you view it? Would you give it to your children, would you give it to members of the family? Always personalize it, because businesses are not inanimate things. Businesses interact with people, they change societies.
Alan Fleischmann
And at the end of the day, it is all people, people forget that. It is all people internally and externally, a lot of stakeholders all interacting. Certainly, technology can help advance and catalyze ideas. But at the end of the day, it's still a people-to-people business, and you you've done that with everything you've done.
But you also were also, all along, a role model, certainly as a socially conscious CEO. You were a role model, especially to young women, I would argue, and women in general. Certainly a globalist, having come from India. I'm just curious if there are any kind of stories that you would tell, or advice, maybe more specifically, that you would give to the young people who are listening. Especially young women, but also just young people that want to live a values-driven life. Can you do that in the private sector? I mean, I think you and I both agree, the answer is yes. But maybe explain why and what you advise them about.
Indra Nooyi
In many ways, I am a walking advertisement for what the United States stands for. Because I came here not fleeing persecution, I didn't come here because I was a refugee. I came here because I wanted to come here. My entire life and success has been tied to the US.
I talk about one incident when I was in Chequers, the Camp David equivalent of the UK Prime Minister. Many years ago, he asked me, “Indra, you went to the US many years ago. Why didn’t you come to the UK to study?” I said, “Mr. Prime Minister, had I come to the UK, I wouldn't be having lunch with you.” And I sincerely mean it. I am an American story, Alan. My story could have only happened in the United States. I think very often we forget that. For all the self-criticism we have, we still are the greatest country in the world. If you open all the doors of every country, people will still come to the United States. The question is, how do we take this great country and keep it great and make it even greater?
To me, I look at my entire life and say, this next generation of my life is giving back in profound ways to a country that gave me so much. So, post my working life in corporate America, I've been doing a lot of things. I taught for three years at the US Military Academy at West Point, which to me was like, the best experience I've ever had. I went there to teach, I ended up learning from them. I learned about what duty, honor, and country actually meant. I learned about unselfishness. I learned about complete commitment to guiding and protecting the country, our freedom and our rights. I mean, I learned so much from those people.
I was sitting on the board of MIT and Memorial Sloan Kettering. I learned so much about all the institutions that make our country so successful. And now, post my book, I'm working on childcare infrastructure. A lot of people are working on it, I'm helping them accelerate their journey to see how we can help young family buildings get access to good childcare, so that they can keep working in paid jobs and still have a family, because the country needs young children too. So, I'm now in this phase of giving back, because I've gotten so much from the country, it's my turn to give back.
Alan Fleischmann
That’s wonderful. I will say this, the DNA of any corporation or organization, the culture, is definitely a reflection of the CEO. You transformed Pepsi, which must have been an incredible experience. But then, it also must have been hard to decide to leave, I'm curious about that.
Your memoir, My Life in Full, tells the story of your journey and your career. There are some extraordinary insights that people really can take from it, I recommend the book wholeheartedly. But I'm curious: In there, it also talks about the decisions you made and the tough ones you had to make. Stepping down as CEO must have been very hard. Because at that point, you were synonymous with the company. I thought of Pepsi, I thought of you; I thought of you, I thought of Pepsi.
Indra Nooyi
Well, interesting. Twelve years is a long time to be chairman and CEO. A normal term is six, so I did two terms, put it that way. CEOs leave when they're tired, when they have lots of succession that's ready to take over, enough successors, or the board throws them out. In my case, the board and I was still on great terms and the company was performing well. I was tired. And the company had so many successors that had been developed over the years. I mean, I had developed such a stable of successors that the board had four or five people to pick from, which is very unusual. All of them went on to be CEOs of other companies, those that didn't get the job. So the time was right.
Interestingly, on October 2nd, when I left the place in PepsiCo near the flagpole where I gave my farewell speech and I walked out, I never looked back. The next day, I landed in this office and I forgot that I ran PepsiCo. So, it just showed that I had a very full life at PepsiCo, I was thrilled about the succession, and I've come on to different life. This is now equally fulfilling, and I think that's how transitions should be made. For me, I told my successor, “Whatever you do is right. Just keep doing it. You won't hear from me. Retired CEOs can be seen, but never heard from.” I follow that rule to a tee.
Alan Fleischmann
You gave the oxygen for your successor to succeed.
Indra Nooyi
Exactly right.
Alan Fleischmann
That’s great. But it's true, you look so happy.
You transitioned away from that role in 2018. You’ve stayed extremely active. You serve on a variety of boards, including Amazon and Philips. You've been a vocal advocate for empowering women in the workplace, which I love as a father of daughters. I asked my daughters last night, who are 18 and 15, “Do you know who Indra Nooyi is?” And they knew a lot about you, it was really wonderful. My older daughter actually said — she’s going to Barnard in the fall, and she said that she's read a lot about you. She started to say things that I started to read because of it, and I was so blown away. She said, she's looking for role models, and you're one of them.
Indra Nooyi
I’m touched.
Alan Fleischmann
That just shows your impact on women is such a powerful part of your legacy and journey, and continues to be.
Indra Nooyi
I think that's the… we all derive success in how we lift other people up. So I always tell my team here, “This is not about me anymore, it's about you guys in the next generation. How do we enable you guys to start making and changing the world? Because at our age now, we’re counting down. They're all counting up.
Alan Fleischmann
That’s exciting. It also says a lot to people who are big supporters, who are inspired by you, that you didn't say, “I'm gonna go retire and go learn to play golf.” You actually said, “I'm going to stay in the arena, I’m going to stay engaged.” You’re staying engaged with board life, you’re staying engaged in your philanthropic life, I'm certain.
Indra Nooyi
With my state. I was co-chair of Reopen Connecticut, and I do a lot of work on the economic development of the state. I love my state.
Alan Fleischmann
And you're doing a lot of thought leadership with your writing. Really powerful, powerful stuff.
Is there something that you have not fulfilled that you're still looking to do?
Indra Nooyi
You know, I wanted to be a ballroom dancer, and COVID prevented that. Originally, I thought I would travel, but now I have no interest in traveling, I actually enjoy staying home, reading, and just puttering around Connecticut. I just love the state. So I'm enjoying that. I'm spending more time with my kids and my husband, which is also a big blessing. And whenever I want to do something that takes me away, I do it. But I'm not forced to do it based on a schedule that was set for me two years ahead of time.
Alan Fleischmann
You can say no, which is a wonderful thing. And I imagine, even your board meetings, some of them are virtual, so you don't have to travel, which is pretty amazing.
And then your daughters, where do they live? Do they live nearby?
Indra Nooyi
One daughter lives in Connecticut, and the other one lives in Seattle. Both of them have got their master's, they are off doing their thing. Good kids, very good kids.
Alan Fleischmann
That's one of the great joys of life. Now you can spend time enjoying them as well.
Well, you are such an inspiration, I must say. This is one of those, Indra, where I wish we had two hours. And we might — if I get you back, I'd love to have you back on to talk even more about your insights. Because when I think of you, I think of someone who has that ability to ask the right questions, and know to say no to some of the answers. That's a really hard gift for people to achieve, and I think you're one of the great role models for people, who are willing to take risk, are willing to see the impossible and make it possible. You're also willing to say no to the things that people should say no to, which is probably the hardest thing of all.
Indra Nooyi
I wish I had more time.
Alan Fleischmann
Me too. I really enjoyed it, I’m looking forward to spending more time with you.
This has been “Leadership Matters.” I've been your host, Alan Fleischmann. This has been an extraordinary hour we have had with Indra Nooyi, the former chairman and CEO of PepsiCo, discussing her journey and her life.
There's a lot more coming from you, Indra, I know it. And we're looking forward to being on this journey with you and having you back.
Indra Nooyi
Thank you. Good to see you, Alan.