VIP Speaker Series: Pepsi CEO Indra Nooyi speaks at McCombs

Uploaded by UTMcCombsSchool on 21.03.2011

Hi, everyone.
Thanks for coming today.
My name is Eva Agoulnik and I'm this year's VIP Distinguished
Speaker Series chair.
Today we have Tom Gilligan the Dean of the McCombs School
of Business from the University of Texas at Austin
and Indra Nooyi, the chief executive officer
and chairman of PepsiCo.
Indra K. Nooyi is chairman and chief executive officer
of PepsiCo, which has the world's largest portfolio,
a billion dollar food and beverage brands.
Mrs. Nooyi was selected No.
1 on Fortune's most powerful women
in business from 2006 to 2009.
No. 1 on Financial Times' top women
in business in 2009 and No.
3 on Forbes' list of the world's 100 most powerful women
in 2008 and 2009.
Mrs. Nooyi has directed the company's global strategy
and led its restructuring into the powerful young brands
and including its divestiture of the restaurants
into those young brands.
The acquisition of Tropicana, the merger with Quaker Oats.
Prior to PepsiCo, Mrs. Nooyi held executive positions
at both Asea Brown Boveri and Motorola, after she worked
at the Boston Consulting Group for six years.
Mrs. Nooyi serves as a member of several international boards
such as the U.S. China Business Council
and the U.S. India Business Council.
She was appointed to the U.S. India CEO Forum
by the Obama Administration.
Mrs. Nooyi began her career in India
where she held product manager positions at Johnson & Johnson
and Mettur Beardsell Limited, a textile firm.
She holds a B.S. from Madras Christian College,
an MBA from the Indian Institute of Management in Calcutta,
and a Master of Public
and Private Management from Yale University.
Please help me welcome Dean Gilligan and Indra Nooyi.
Hello, Indra.
Welcome. We're very glad you're joining us today.
I just want to say a personal thanks to you
and your colleagues at PepsiCo Frito-Lay for all that they do
at McCombs School of Business.
We really appreciate your partnership.
Thank you.
It's our pleasure.
Could you, we just want, this is a casual conversation
and which is designed to help students better understand the
career paths and lives of someone like yourself.
Could you start by maybe telling us something
about your first jobs or the way that some
of your early values and traits began?
Yes. But before I begin first let me thank you for inviting me
to speak with all of you and I have a question, show of hands.
How many of you have showed up for the free food
and how many of you came because?
Nobody put their hands up.
Okay. Because I really didn't give you a choice.
My first job, I tell you, I had an unusual childhood
because I graduated from high school when I was 15.
I graduated from college when I was 18,
and I finished business school in India when I was 20.
So, it was kind of early to do all that stuff
and in retrospect I regret that I raced through school
and college the way I did.
My first job was a brand manager for a textile company in India.
It was a British textile company in India and I was hired
as a product manager for textiles.
And they had a normal practice of hiring students
out of the business schools in India.
And the first day I showed up on this job I was given a desk
and I was told you're the product manager for textiles,
and incidentally you're responsible for printed fabrics.
The company made plain dyed fabrics and printed fabrics.
So I looked at them and I said okay,
what are my, what is my job?
Is it a training program?
They said no; figure it all out for yourself.
Figure out your training program,
figure out what you have to do.
I said, are there files?
Are there anything that, you know, I can look back on?
They said, yeah, it's in that cupboard there.
I open the cupboard and out tumbles fabric swatches, books,
files, it just tumbled out.
So I looked at this man and I said, I'm supposed to function
as a product manager for printed textiles, there's nobody
to teach me what to do, and all I have is a cupboard full
of the archives.
All just shoved in, nothing filed.
So for the first week I decided I wasn't going
to be product manager.
I was going to be staff assistant, cleaner, filer,
organizer, because lesson one, if you don't sweat the details,
if you don't organize yourself before you start anything it's
not going to work.
So, first week I decided I have
to organize every printed fabric produced by this company
in some methodical way, so that, you know,
people after me could follow that nomenclature.
It's not just for me.
And then organize quote the office with three people.
So I spent the first week organizing the office,
and once I organized the office I said what do I know
about textiles?
Not much. So I'm going to go to school.
So I went to the mill, I spent almost 10 days
at the mill learning every aspect of the business.
I started with the junior most guy in the mill,
started with him, said tell me your job
and tell me how you do it.
And I worked my way up.
Every day I'd go to another department and work my way up.
So until I learned every aspect of that job I didn't come back
to headquarters to be the product manager.
So sweating the details, learning the business ground
up is particularly important.
Mm hmm. And then the first batch of prints I had to produce
after the designs were finalized,
I didn't trust the organization to execute exactly
on that color swatch, exactly the way I wanted it;
not because they were bad people but because of so much writing
on these printed fabrics.
So I went to the mill that was producing the printed fabrics,
they were running these batches in the night.
I'd sit down on the roller with the dyes
and compare it again this one.
Mm hmm. I was so obsessed with everything having to be perfect.
And so, I tell you the lessons I learned from my first job
and they carried through with me even today.
Because whatever job you have, sweat the details.
Second, be a student.
Go deep before you go wide,
because if you don't understand every aspect of the job
from the ground up, you can never be a credible leader.
And depend on the people
in the organization to teach you the job.
I can't tell you how many mill workers taught me the job,
how many wholesalers, retailers,
taught me how business was done, but I had to ask.
All I had to do is tell them I'm a student, teach me the job.
Today we have organized training programs.
In those days they didn't exist.
You just made it up as you went along.
And I think being a student, being, being willing to learn,
being open to exposing yourself
to saying I don't know really made a big difference.
It's amazing.
Well, you've had an incredible career.
Apart from your attention to detail,
what do you think has set you apart
from your peers throughout the career,
to give you the opportunities you have today?
Yeah. The first lesson I'd say, the first learning,
focus on the job that you're doing.
Don't run for office, don't say
to yourself I really want the job two levels above me,
because the day you walk into a job and focus on the next job
or the next job, you're spending more time worrying about how
to get there as opposed to how to nail the job you're doing.
You know, my grandfather would always say to me
if you're given a job do it better than anybody else
so that your boss says to you, I never have to check your work,
I never have to look at what you've done,
because if you've done it, it's got your seal of approval.
And I remember at PepsiCo in particular
when we were doing the restaurant spinoff,
I wrote all the work in preparation for the spinoff and,
you know, I would check everything,
go through the presentations in great detail.
I took it to the CEO and I said Roger, here's the doc
that we're going to show to the board of directors,
would you like to read it.
And he looked at it and said, I'll get to it.
I went back the next day and said, have you read it?
He said, no, I'm not going to read it.
I said, but you've got to, it's a four-hour presentation
to your bosses, please read it.
He looked at me and he said, if you have checked it,
if you have gone through the data,
there's nothing more I can add to it.
Mm hmm. And so I think it's that confidence that you have
to instill in the people that you work for,
that you're only focused on the job you've got and you're going
to do such a good job with it,
that everybody else can depend on you.
Mm hmm. And I'd say the first lesson I learned,
don't run for office.
Do what you're doing, do it well.
And then what you do is redefine your job.
Some people ask me, why do you work so hard?
Is it the job that's overwhelming you?
I said it's not the job, it's me, because if I were a janitor
in a building, I'd run the building within a week
with the same grade as the janitor.
Not because of anything else.
Once you do that job very well, you're also thinking
about how this job interacts
with every other function around you.
So you're automatically looking at the link to this.
So the other thing that I think got me to where I am today is
that I was always looking to see the impact of my work
on the rest of the company, and constantly looking
to see how I can help those - Right.
- Pieces of the department work better with us.
Now some co-workers in an environment
like that might be threatened or uncomfortable with an employee
like you who is always worrying about their back yard
and not your back yard.
Did you ever encounter conflicts in organizations
because of the way you're concerned
for the whole organization?
I think people actually reached out to help me.
Yeah. Because at the end of the day if all of us are focused
on the success of the company people don't care whether you're
encroaching on their territory
because they know you're not encroaching on their territory
because you want to knock them out of a job.
You're encroaching on their territory
because you feel there's an overlap
between what you're doing and what they're doing,
and together we can do better by the company.
So I think, I have to introduce Dave Raider.
Dave, where are you?
Show of hands.
There's Dave Raider.
Dave Raider's a UT Austin alumnus, and I mean,
there are many times that I encroached
on Dave Raider's territory, but Dave always stepped up and said,
I'm going to mentor her because I want to make sure
that what she does and how she extends
into my territory together helps PepsiCo get to a better place.
So, I think people just stepped up to the plate
and said let's see how we can help her do better.
Every step of the way, that's what I felt.
I see, I understand.
Are there some things you haven't
yet mastered that you'd like to?
Plenty. I'd like to learn to play the guitar.
I haven't mastered it.
I want to learn ballroom dancing, I stink at it.
I mean, so many things.
I could learn to be a better mom.
I think I'm an average mom with lots more to learn.
If you ask my husband he'll say you haven't learned how
to be a wife as yet.
But leaving all that aside, what, you know what?
I feel I come to work every day saying,
I wish I could be a better leader.
I wish I could bring the human side
of CEOship more to the people.
Mm hmm. I wish there was 60 hours in a day not 24,
because there's so many more people to reach out to,
so many more issues to study.
So if you say to yourself that I've learned everything I can,
I think that's the day I need to step down as being CEO.
What is PepsiCo doing in, in today's market
to meet the challenges of growth and serving your clients?
Well, you know, from a growth perspective,
geographical growth is huge.
Mm hmm. I mean, we have opportunities all
over the world.
Mm hmm. And the convenience boom is taking shape everywhere
in the world, emerging markets.
I mean, there are 250, 220 countries in the world
which we've participating in,
so we have lots of geographic growth.
I think even in the United States, in developed markets
where the per capita consumption is high,
there's even more opportunities to make inconvenient convenient
but do it in a healthy way.
And so the shift in nutritious products is big.
Right. And we're doing a lot of that.
Yeah. And then going into adjacent categories,
the markets are changing all around us,
and I think PepsiCo is looking for every which way to get
into new products, new services, new adjacency.
Right. That's what we're doing.
I see. If you look at PepsiCo it looks
like a company that's trying very hard to align its assets,
like the foundation, towards what might be called the public
sentiments or social values associated
with nutritious products or access
to clean water, things like that.
And that, that's been a large initiative of yours I know.
Mm hmm. Could you talk a little bit more about that link
in the strategy of PepsiCo?
So, one of the things that, you know, I grew up in India,
in an emerging market.
Mm hmm. And, you know, life there was tough growing up.
And I grew up in the Madras in India
which was extremely water starved.
I remember days when my mom would get up at 3:00 or 4:00
in the morning and find every pot and pan in the house
to fill water because the central water supply,
relief water to homes only for two hours.
And every morning when the kids got up we were given two buckets
and said, this is your two buckets
for the day, for everything.
For your toiletries, for your clothes,
for bathing, everything.
These are the two buckets, figure out how you can work.
So I grew up in an environment which was water starved,
you know, there was shortage everywhere.
So, when I came to PepsiCo and became CEO, I,
I had deep in my mind the notion
that big companies can be a force of good in societies
because big companies bring technologies,
big companies can bring resources
and big companies can help address problems
of many governments and societies.
And in turn, if societies succeed, companies can succeed.
And so I realized that there was a great relationship
between the two.
The second, if you look at every corporation,
we operate under the laws of limited liability.
And the reason we operate under laws
of limited liability globally is
because we owe every society a duty of care.
That is the expectation.
Too often companies have forgotten
that we owe society a duty of care, right?
Mm hmm. So, I wanted us to go back to those roots.
PepsiCo was already there,
I wanted us to embed those roots into PepsiCo.
So the PepsiCo operating philosophy is
about performance with purpose.
Mm hmm. How can we
as the company deliver great performance while also doing
right by society?
Mm hmm. Now, be careful, it's not performance and purpose
or performance or purpose.
It's performance with purpose.
And the way we crafted purpose was such that
if you didn't deliver on the performance -
on the purpose commitments, you couldn't deliver performance,
and if you didn't deliver performance you couldn't find
the purpose.
Mm hmm. So purpose had three planks.
The first plank is what we call human sustainability.
We made products that were fun for you,
but society was changing.
We knew we had to change the portfolio
so we said we are going to balance the portfolio
so that the fun for you moved to better for you
by removing the negatives and then we add a healthy chunk
of nutritious products so that it's catering to societies
and changing lifestyles.
So the first plank was human sustainability.
And while doing that we added a plank which said,
our duty is also to serve the undernourished of the world.
We shouldn't just be worrying about over nutrition;
we should be worrying about under nutrition.
So we started active projects to feed the very,
very bottom of the pyramid.
The second part of the plank was environmental sustainability.
The water we use, we have a carbon footprint.
We knew that we couldn't continue to use water
in the Pepsi plant if in Madras there's no water to take a bath
or to, you know, cook.
So our plants not only had to become water neutral but we had
to help communities through rainwater harvesting,
and bring our global resources to communities.
So the second plank was all
about environmental sustainability
within the four walls of the PepsiCo plants but also
in every community we serve.
And this was global.
And the third part which was my favorite was
about talent sustainability.
How do we make every employee
in PepsiCo bring their whole selves to work?
Mm hmm. We recognize that every person is first a daughter, son,
mother, father, husband, wife,
and too often we were asking people to park themselves
at the door, come in as a PepsiCo employee,
then pick themselves up when they went home.
Mm hmm. It doesn't work that way
because people feel wonderful working for a company
that recognizes that the community has to be enriched,
that they as people have to be taken care of in terms
of recognizing that they have families to take care of,
they have family issues to be dealt with.
So we wanted to change the environment
in PepsiCo radically.
We were already a great company but change it even more
so that our employees truly felt they could bring their whole
selves to work.
Mm hmm. And we wanted to change the way we did people
development, talent management, so that it took into effect all
of these issues of people.
For example, we don't do development plans anymore
for two or three years.
We look at 10-year and 15-year development plans.
Mm hmm. So an employee comes in, let's say they have three kids
and the kids are 5, 6 and 7 years old.
We sit down now with the employee and say,
when your kids get to high school
in which school system do you want to be?
The international system?
The U.S. system?
The British system?
The Indian system?
Which system?
At that point we know where we need to land them.
Then we work backwards.
Between now and then which companies do we have
to rotate them through,
what experiences do we have to give them?
Do they have aging parents they have to take care of?
So now we are beginning to think of people development
in a whole different way.
Now, what's the logic?
If we don't transform our portfolio,
we can't deliver the numbers.
If we're not environmentally prudent NGOs
and governments will shut us down.
If we don't have the best people who can bring their whole selves
to work, we won't have the right talent base
to feed performance going forward.
So it's this virtuous circle that results
in performance with purpose.
So, my legacy is that when I leave PepsiCo I want people
to look back and say, PepsiCo was indeed a good company.
Good commercially, but also good ethically What,
back a little bit to your, to yourself.
What's the best piece of advice you were ever given
to manage your career?
Given or gotten?
Given. Given.
Gotten. What's the best advice you were given or you got.
Oh, the best piece of advice I got, is what I started with,
you know, I never forget the words my grandfather would say,
just do the job you've got well.
Mm hmm. Do not worry about the next job.
It will come automatically
if you do the job you are given exceedingly well Too often I
find that too many people are
in my office saying what's my next job?
When am I going to get it?
Do your existing job well and don't spend
so much time worrying about the next job,
it will take care of itself.
Yeah. I said, if more people think of it that way, trust me,
I think progression will be quite easy.
This next question is very important to a lot
of the students in here.
What makes you, what makes a person stand out to you
when you talk to them and you think
about putting them on the PepsiCo team?
As an entry executive or a senior executive?
We'll start, let's say as an entry executive
and then we can move on.
Yeah. You know, unfortunately, one of the downsides
of my job is that I don't see enough entry level people,
except when, you know, they're in roundtable with me.
But let me generally speak about what draws you to somebody.
Anybody who I sort of get excited about is somebody
who has raw intelligence, raw competence,
because if somebody doesn't have the core horsepower there's no
point trying to spend any time with them, because -
from a business perspective.
They can be friends but, you know.
Yeah. You know what I mean.
So the core horsepower.
What do I mean by core ****?
You've got to be damned good at something.
You've got to have a hip pocket skill
that you're very, very good at.
A generalist is usually not very good, okay?
So decide what you want to focus on, be very, very good at it
and be a lifelong student at it.
Mm hmm. You know, constantly read about it,
reach out to people, go beyond the boundaries of that skill,
but fine tune that skill.
Make sure you have the breadth
and make sure you have the depth.
The second thing that draws me
to people is are they courageous?
Do they have confidence?
Because a lot of people who are brilliant,
if you don't have the courage to speak up it doesn't matter.
And how do we look for that?
When you ask somebody to give a point of view,
the kind of people I cannot stand are people who say well,
it could be Option A or Option B. It could be this
or it could be this.
What kind of an answer is that, you know?
I asked you for a point of view.
I know it could be black or white,
but what is your point of view?
What color is this?
You know, a lot of people who don't want to give you an answer
because they want to know what you want to hear in **** answer.
I don't want people who want to tell me the time
after borrowing my watch.
Mm hmm. I want them to tell me, look into the sun
and the stars what the time could be.
So I want people who have the courage and the confidence
to put themselves out on a limb.
Mm hmm. The third thing I look for is communication skills.
You know, you never follow somebody or never bet
on somebody who cannot articulate what they're
thinking, but articulate it in a compelling, engaging way.
Mm hmm. Because that's what it takes all the time.
I mean, I can tell you on an average day talking
to five groups of employees or some outside group all the time,
and in every case you're convincing them
to do something they never thought they needed to do
when they walked into your office.
So you've got to have complete ability to communicate to them,
with courage, with confidence, based on your confidence.
Mm hmm. So it all links together.
Right. The fourth thing we look for is consistency.
Do you shift your point of view with the wind
or do you actually believe in something
and defend that position?
We look very carefully to see if you're consistent
because if you're one of these wishy-washy kinds,
then nobody's going to follow you.
Mm hmm. And the last one, which is hard to test for,
but you do it through role play, is do you have integrity?
Mm hmm. It could be, you know,
typically an interview processes we give you difficult situations
to role play and see how you would resolve that situation.
Mm hmm. And that's really a test of integrity.
Mm hmm. So to me it's competence, courage
and confidence, communication, consistency
and the moral compass.
Uh huh. Which really decides whether somebody belongs
in PepsiCo or not.
Okay. Well, Indra, thank you so much.
Now is the time of the program
where there's a lot of risk involved.
Students are - Uh huh.
- going to ask you questions.
Let me - there's a little logistics here.
There are two microphones in the middle of the room.
Those of you who want to ask a question just please come
up to the microphone and queue up
and we'll get to you when we can.
We're going to begin by asking Chris, Chris Schultz,
who's a junior in our business honors program
to ask the first question.
And those of you who want to ask additional questions,
please just stand up at the point of the microphone.
Hi, Indra.
I just first want to thank you for being here
and sharing all your knowledge with us, it's awesome.
My question is, that I know Pepsi drinks sat
out of last year's Super Bowl ads,
where they used to be the No.
1 Super Bowl ad provider, to kind of put money
into their community service program called Project Refresh.
And I was wondering if that initiative was a success
and if you see that becoming more, more and more involved
as you move into the future.
Great question.
So let me tell you a little bit about the controversial decision
to pull out of Super Bowl last year, and our,
according to the media, wonderful decision
to re enter the Super Bowl in a big way this year.
And then Pepsi Refresh O.K. In 2010 and coming out of 2009,
we looked at the economy, we looked at the state of affairs
and we saw the number of grants we were getting,
grant requests we were getting to our Pepsi Foundation,
but for small amounts of money, you know,
for little community projects, etc., etc. So our team sat down
and said given the state of the economy wouldn't it be nice
if we could give away a lot of our dollars to these communities
who are desperately in need of small amounts of money, right?
And so, so was born the Pepsi Refresh Project.
When we launched Pepsi Refresh, I'm sure,
how many of you don't know about Pepsi Refresh?
Oh my God, where have you been?
So Pepsi Refresh Project was you go online
to the Pepsi Refresh site, you make a submission
for a worthwhile cause and you can apply for even a $5,000.00,
$10,000.00, $25,000.00, $50,000.00, 100,
125, 250 thousand grant.
And every month we give out 17 grants in a certain number
for every dollar amount.
And basically all these projects lined up
and then you got everybody to vote on it,
and whoever had the highest number
of votes got the grants, all right?
So there's a democratic process,
there was an independent judging committee
that decided whether one was a slick NGO that was campaigning
for the works which we didn't like.
It had to be real grass roots organizations.
So let me tell you what we decided.
We decided we were going to give the money away.
But we also said we're not going to measure volume every quarter
and see if there's an uptick because these sorts
of projects never result in volume growth
in the first quarter so we said we're going to stay
with this project the whole year whether volume goes up or not.
That was a conscious decision we made.
Was it successful?
Let me give you some numbers.
From a sales perspective it was very hard
to isolate whether it was successful or not.
From a Super Bowl perspective the Pepsi Refresh Project
and the fact that we stayed
out of the Super Bowl generated three times
as much media coverage versus had we stayed
in the Super Bowl, okay?
Which is not very good for the NFL but it also haloed
on the NFL, all right?
Second, the first one,
in the Pepsi Refresh Project we accept a thousand submissions
every month and then we put it out to vote.
So people, there might be more than a thousand submissions
and we cherry pick a thousand based
on the depth of the project.
The first month we had in 17 hours a thousand submissions.
And we worried whether we'd get a thousand submissions the next
month, okay?
The second month we had a thousand submissions
in 17 minutes.
Last month we had, the submissions open
at 12:00 midnight, 12:00 midnight
and 17 seconds we had 1,000 submissions.
And there's a backlog of somewhere between 35,000
and 40,000 projects waiting to be submitted.
So there is a groundswell of projects out there
that are dying to be submitted.
What are the kinds of projects?
I met one of the groups that got a $5,000.00 grant.
This was a young kid in Florida, like a little girl in Florida,
middle school I think or maybe a sophomore in high school,
who has a sister or a brother who's disabled.
I think sister.
And her sister always wanted to be in the cheerleading squad,
could never be on the cheerleading squad
because she wasn't up to snuff.
So she decided she was going
to start a cheerleading squad for disabled kids.
She put it on to vote, she got a $5,000.00 grant.
Think about the emotion in the project, and if you go
into Pepsi Refresh or
and you browse through these projects,
I swear to God you will have tears in your eyes before you're
through the fifth project.
You know, the amazing thing about the team at Pepsi?
If you want to submit a project to get votes,
they will even walk you through how
to prepare your dossier to submit it.
So we actually have a group that teaches you how to submit it.
So this was an unbelievable project,
consistent with performance and purpose,
consistent with the soul of PepsiCo.
We're going to go global with this project starting next year.
And we're going to continue with the United States
because it has so much pent up need.
Can you identify yourself too, please?
Testing. Indra, thank you so much for being here.
I'm aware that you wore a sari
to your first consulting group interview.
What your thoughts are on diversity in corporate America
and what you're doing specifically
to implement that in PepsiCo.
Yeah. You know, the fact that I wore a sari
to my first interview was out of necessity,
because when I was a student at Yale
in the business school I had no money, okay?
Summer job time came, I had fifty bucks to buy an outfit
and I - nobody buys an outfit for fifty bucks.
And in those days Yale didn't have a support system,
the business school didn't have a support system
for people like me.
This is three years into the business school,
and fifty bucks, I was too afraid to go
to somebody to ask for help.
So I went to the local Kmart and I found a pair of pants,
because I'd never worn a skirt before.
I found a pair of pants and I looked at the fitting room
and it had a curtain and not a door
and I was afraid people could peek
in so I decided not to try these clothes.
And my mom's words came to me, she said,
always buy clothes two sizes bigger
than you, you'll grow into it.
So, I had because, you know, when you don't have
that much money, you know,
you always stitch things a little bit looser and you hope
that the kids grow into it.
So I bought clothes that are a bit bigger,
I didn't try the trousers on, and I had no money for shoes
so I decided to wear my snow boots,
so that it was a pretty ugly scene.
So I showed up at my first interview
with a jacket two sizes too big, with the trousers about an inch
above my ankle because I didn't realize when I hemmed it
up it wasn't quite how you wore it.
And then these snow boots that I was tucking
under the table right through my interview.
When the people saw me they sort of gave a collective gasp,
you know, sort of a seizure of sorts
because this was a pretty ugly sight.
But I needed the summer job
because if I didn't have a summer job I didn't have money
to live.
So I went into the development office and I said, Jane,
look at me, why are people laughing?
She said, because you look like a freak show, you know.
This is not the way to dress.
I mean, you've got to do something different.
I said, I used up my fifty bucks, I don't have any money
and she said, what would you wear
for an interview if you were in India?
I said, I'd wear saris.
I have lots of saris with me.
She said something I've never forgotten.
She said, wear the sari to the interview.
If they don't hire you for who you are then they don't
deserve you.
Then we'll find another solution for you, but wear a sari.
So the summer job was at Booz and Hamilton and BCG
and I wore the sari, and I got the job.
But I want to tell you something that speaks volumes
about this country, and I tell it, the first job I went
to where I looked like a freak show,
there were about 40 people interviewing
for that summer job.
They hired one person.
They made one offer.
They made that offer to me,
even though I looked like a freak show.
And so in a way the country is a meritocracy.
Now, let me get your diversity and inclusion for the topic.
So, if you act true to yourself and be who you are but focus
on your skills, your courage and confidence,
your communication, doors open for you.
However, there's no question the playing field is not
level everywhere.
There's still work to be done for certain groups
that need to be pulled up.
So in PepsiCo we have explicit programs to ensure diversity.
There's only one problem:
when you have a global company what is diversity?
Is it multinational, multigenerational?
Is it ethnic diversity as we know it in the United States?
So we have a double problem.
In every county in which we operate we have to worry
about that country's diversity, and on a global basis we have
to worry about multinational, multigenerational diversity.
So we have an interesting challenge.
Diversity is one part of it.
The second part is inclusion.
It's very easy to bring people in the door;
how do you now make them feel included and move up the chain?
We do a lot of inclusion training, Inclusion 1,
Inclusion 2, Inclusion 3, because we believe that we have
to constantly educate our managers
to make sure they recognize when you're working
with a diverse group of people you have to behave differently
and be sensitive to them.
This is a journey.
By no means are we perfect.
We're still learning,
we're always discovering mistakes we're making,
but I think we've made a lot of progress.
Thank you.
Yes And again, Ms. Nooyi,
I think it's been an absolute pleasure thus far.
I think we all are better for this event then before.
I have a two-part question.
I think as a student of finance and I'm a student
at the university, of course a large multinational
like PepsiCo relies heavily on organic growth
but a fair bit also comes from inorganic growth.
Uh huh. And we can, we can get lost in numbers and synergies
and all sorts of fancy things.
But as a student of the subject I feel
like cultural assimilation of an acquired company is perhaps one
of the biggest challenges.
What in your opinion is,
is perhaps the right mantra going forward
and how do you broach this entire issue?
And what's the second question?
My second question is what was your favorite acquisition?
I know that there's been a lot that's been said
about Quaker Oats and other things like that,
but if you could talk about why
that was your favorite acquisition.
I'm not asking you to name favorites because - Yeah.
- We all have them, but if you could just talk a little bit
about a deal or an acquisition just from a,
from a human perspective and stuff that we don't read
in the papers, that would be enormously helpful.
Yeah. You're, you're absolutely right
in saying the cultural assimilation is the toughest
part of a deal.
You know, we always say that the sexy part
of the deal is doing the deal, you know,
you feel like you're a hotshot, okay?
But the difficult part is post merge integration.
And getting the numbers, getting all that ticked
and tied is not difficult.
It's getting the people in both companies to work together
to get all the synergies.
So, what did we do when we bought Quaker Oats?
And, you know, we bought Tropicana
and we bought Quaker Oats, two different companies,
and I'll talk about both.
We bought Tropicana in '97.
When we bought Tropicana in '97
for the first year we said anybody who wants
to visit Tropicana had to get permission from corporate to go,
because we wanted to make sure that that culture of Tropicana,
that nutrition culture, the fruit and vegetable culture
of Tropicana, wasn't tainted by the rest of PepsiCo
because it was a small company and the weight
of PepsiCo could have overwhelmed it.
And then over the first year we gingerly learned our way
through the Tropicana culture.
We started sending a few people into Tropicana,
we brought people from Tropicana to PepsiCo,
and we slowly assimilated them, okay?
So that was one way.
In the case of Quaker Oats, it was a much bigger company.
Of course, PepsiCo was six times bigger than Quaker Oats,
but we had to make the Quaker Oats people feel
like it was a merger of equals, so that they didn't feel
like they were acquired and they were suppressed.
So we worked very, very hard to make, I mean,
Roger Enrico was brilliant.
He made himself and Bob Morrison co-chairman of the company,
that way Bob Morrison was an equal partner with him
and that sent a strong symbol, a message,
to the rest of Quaker Oats that this was a merger of equals.
And so the first year or so
after a merger is critically important.
You have to make sure that you're very, very sensitive
because everybody's waiting for the shoe to drop and for them
to be thrown out and for the acquiring company's people
to come in.
So most acquisitions fail because of cultural reasons
so we, we tiptoe through this very carefully.
On the case of my most favorite acquisition,
I loved the Tropicana acquisition
and I'll tell you why: because when we bought Tropicana we
didn't have a beverage
which people consume before 10:00 a.m. in the morning, okay?
On the 2:00, 2:00 a.m. shift,
people consumed some Mountain Dew,
but that didn't count, all right?
But, you know, we calculated day path wise,
the first PepsiCo beverage that they reached out for was
about 10:00 a.m. And Tropicana was a great acquisition.
Quaker Oats on the other hand, everybody talked about Gatorade
but really the excitement of Quaker Oats is the Quaker brand
and business, because you couldn't take Frito-Lay
and make a healthy bar out of it.
You know, if I sold you a Frito's bar
and told you it was healthy,
you'll probably get turned off, okay?
Or if I told you that this Lay's bar is nutritious you wouldn't
believe it or you may start getting turned off
of the Lay's brand.
So again, like Tropicana, we needed a food franchise
that had credentials in the healthy space.
And that's why the Quaker brand name is so powerful
and brought a lot of attraction to PepsiCo.
Is it true that you went
to the temple the day before the video got announced?
The day it was announced.
Yeah, absolutely.
I'm big on faith, so.
Yeah, absolutely.
Thank you.
Hello, I'm an exchange student from the Netherlands.
Uh huh. And I, it's very impressive to see
such a great leader here.
I have taken a leadership class actually taught
by the previous business dean, Mr. Gau,
and it's a question about leadership.
All right.
How are you a leader?
Like, what is your leadership style?
What are your leadership qualities?
How do you motivate your followers, your employees?
Maybe you should ask all my orange shirted Frito-Lay
people here.
I don't know.
I'll give you a point of view and, and at the break
if you want to accost any of those people in brick orange,
is that the right word?
Yeah, burnt orange.
Burnt orange T-shirts, please ask them.
I don't think I yet have the perfect formula worked up,
but let me tell you I work on.
First, if you want to lead a company like PepsiCo you have
to feel PepsiCo every day.
I mean, you've got to feel it in your heart,
you've got to feel it in your head, I mean,
you've got to be a PepsiCo person, you're going
to live it all the time.
Second, you've got to make sure
that you run the company not just intellectually,
but you're also going to run it from a human perspective, okay?
And maybe this is one place where I have departed
from even the prior CEOs,
and maybe it's the fact I'm a female,
but let me give you some examples.
When I was president and CFO I cannot tell you the number
of times I'd reach out to my CFOs on a personal basis,
because I wanted to get to know them as people rather
than just the position that they were holding.
And when I became CEO, one of the practices I started
and this actually came out of an experience I had
which I'll relate to you to tell you what came up.
When I became CEO, you know,
I became an overnight celebrity in India, right?
So I went to Madras to visit my mom.
And my father had passed away and my mom was there, so,
you know, I went home to stay at home, you know,
my mom's got a home, we've got a home in Madras.
When I went there, you know you go
for a holiday, you want to rest?
My mom would wake me up at 7:00 and say get up,
get ready and sit down.
I said, well I don't want to get ready; I want to hang
around in my pajamas all day.
She said no, no, no.
There are guests who are going to come.
And so I got dressed, you know, jetlagged out of my mind.
I'd be sitting in the living room,
strange people would walk in.
Absolutely strange I'd say, mom, who's this?
That's the next door neighbor's third cousin.
Then why am I sitting here talking to them?
Because you leave, I have to cope with all of them,
so you better sit here and say hello.
But what they all did, they came in, they'd say, oh hi, Indra,
how are you, and then they'll go to my mom and say,
Mrs. Krishnamurthy, you must be wonderful,
you raised such a good kid, aren't you wonderful.
So I was just the sideshow.
But, but let me tell you something.
It taught me a very valuable lesson that I brought back
and it goes back to leadership and the whole person.
It came back to me that every person is a product
of their upbringing.
And we have never taken the time as leaders
to thank the parents of our executives.
So when I came back to the United States after this visit,
I wrote to the parents of all my direct employees.
I wrote to them about this incident and I said,
I wrote to you, I'm writing to you to thank you
for the gift of XYZ to PepsiCo.
This is the job they're doing,
let me tell you what a wonderful job they're doing,
and I want to thank you for the wonderful upbringing you gave
this person that gave me such an outstanding executive.
What did that do?
That bonded the person, the executive, closer to PepsiCo;
I now have an independent relationship with the parents
of all my direct executives.
And trust me, if any of them want to do something else other
than be in PepsiCo, I'm reaching out to the parents.
And I'm not joking.
This is a very personal relationship,
a very personal relationship.
I'm illustrating this as one of many examples
of leadership is not about just being an intellectual leader.
Leadership is about leading with the heart.
Leadership is about getting to know your people
as individuals, as people.
And leadership is living those values every day.
And leadership is about showing your vulnerability also.
We are people too, I mean, I have kids, I have a husband,
I have work life issues, I have family issues,
I have all kinds of issues.
Why do I come to work and pretend
that I'm absolutely perfect?
I come to work and I say I had a scrap with my husband today;
I need 15 minutes to cool off.
So everybody knows she's a person, too.
It's okay.
So, that's what I guess makes me okay.
Thank you very much.
Well, Indra, regrettably,
that's all the time we have for questions.
Thank you very much - A pleasure.
- For the time you spent with us today 15