The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. Then, you start traveling. But I think it will take time for the rank and file to understand that international growth is a critical part of our future. How do you make that a reality at PepsiCo? The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. Rishi said achieving the promise of spending two percent of GDP on R&D by 2017 will require a considerable jump from the current spend of approximately one percent. Are you spending more time with the external world now than you were before? Nooyi herself spent two weeks in China last summer, making sure to get out of conference rooms and into the countryside and people’s homes. You talk about thinking globally and acting locally. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. Could you briefly describe your personal background and your professional background? After gaining much prominence as a strategist, she received several job offers from some of the leading firms, including General Electric and PepsiCo. In a recent speech, you talked about five ways in which the role of the CEO will change. Indra Nooyi became PepsiCo's first female CEO in 2006, and she's also the company's first CEO who wasn't born in the US. If Nooyi says that she has not changed her leadership style during the recent economic turmoil, it is mostly because she has believed for several years that tomorrow’s leaders must have fundamentally different skills from those required of executives in the past. In fact, I’d say that it was reinforced by the downturn. Indra Nooyi has her unique charisma; her story between Michael D. White, chief executive officer of PepsiCo International and vice chairman of PepsiCo, is very popular in the company. She also stresses the need for leaders to have direct personal understanding of the markets and cultures in China, India, and other growth spots. This is an old notion, but we must take it to a whole new level. In August 2019 the Business Roundtable acknowledged that companies today operate in … Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. You wrote the parents of your 29 senior executives. Too many companies have not done right by their shareholders by focusing strictly on the short term. What were some of the actions that Pepsi took to manage a drop in demand? About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo embarked on a corporate mission—“performance with purpose”—meant to marry financial success and social responsibility. Could you describe this idea? Let’s take PepsiCo’s beverages. Let’s just focus a little bit more on the last 18 months. Half of humanity lives east of the Middle East. Before my time at PepsiCo, I was at Asea Brown Boveri and Motorola, and before that, I cut my teeth at BCG. Is that what happened in this situation? We also must give people the opportunity to work in international markets if they’re so inclined and have the capability. BCG was the pioneer in business strategy when it was founded in 1963. So this is a whole new environment, and the role of the CEO has forever changed. As you reflect on the last couple of years, what have you learned that surprised you? Unless you focus on purpose, you cannot deliver performance. I have to go back and explain to you the origins of performance with purpose to explain why it was untouched by the events of the last 18 months. And in today’s environment, people still want to eat healthy foods. Indra Nooyi is an Indian-born American business executive currently serving as the Chairperson and Chief Executive Officer of PepsiCo, one of the largest food and beverage businesses in the world. We did not want to cut back on all of our long-term investments. We actually thought this might be the right time to make some long-term bets. Related Expertise: Today’s young people do not want to be wedded to a job like the people of my generation were. While attending Yale School of Management, Nooyi completed her summer internship with Booz Allen Hamilton. We have enormous influence in the world. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. Although developed markets may not grow as fast as they have in the past, developing and emerging markets will grow faster. People think there are many, but in reality, there are few. Indra Krishnamurthy Nooyi is an Indian-born American business executive. Indra K. Nooyi on Performance with Purpose. I’ve been at PepsiCo for 15 years and became chairman and CEO about three years ago. But you also need to be able to look at that person and say, “I value you as a person. Related Expertise: BCG was the pioneer in business strategy when it was founded in 1963. You talk about performance with purpose. [Laughter.] First, you surround yourself with great people, who run the businesses. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws. We can’t do it. Performance with purpose is what I’d like PepsiCo to stand for. What were some of the actions that Pepsi took to manage a drop in demand? How can we introduce lots of new products there? I went to consumers’ homes and visited with both younger and older people there, trying to understand how they live, what they think about products, and what we should be doing differently as a company. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo embarked on a corporate mission—“performance with purpose”—meant to marry financial success and social responsibility. How do we make sure that, as a company, we replenish the planet and leave the world a better place than it was when we began playing around with it? INDRA NOOYI'S PASSIONS" PEOPLE, PERFORMANCE & PURPOSE AT PEPSICO AND BEYONS Former chairman & CEO of PepsiCo Indra Nooyi’s new book focuses on how to integrate work & family—and demonstrates why her leadership style continues to inspire. The world has become much more complex, and the only way companies can function effectively is if we put ourselves in the shoes of lawmakers and nongovernmental organizations (NGOs), and they put themselves in our shoes. But the way people live east of the Middle East is vastly different from how they live in the rest of the world. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. First, you have to focus on the long term. As the CEO of Pepsi, a position she held for 12 years, and in her time at the company before taking on that role, she had to make accommodations to raise her two kids. Too many companies have not done right by their shareholders by focusing strictly on the short term. Fourth, you must become much more open-minded. Be realistic, but don’t project doom and gloom. PepsiCo’s emphasis on environmental sustainability, for example, is more relevant than ever today, because going green can actually save money and, along with other acts of citizenship, attract and retain the talent needed to succeed in difficult times. And as long as PepsiCo keeps doing well, people will be okay. In 1980, Nooyi joined the Boston Consulting Group (BCG) as a strategy consultant, and then worked at Motorola as Vice President and Director of Corporate Strategy and Planning, followed by a stint at Asea Brown Boveri. and values is more important than ever. I have to go back and explain to you the origins of performance with purpose to explain why it was untouched by the events of the last 18 months. All rights reserved. We are likely entering a period of low growth. As a Western company, we at PepsiCo have to make doubly sure that we don’t just export a model and say, “Give it some local colors or local flavors.” We actually have to tell our people, “Develop a model in your country that’s right for your country.”. But the way people live east of the Middle East is vastly different from how they live in the rest of the world. Third, we undertook brutal prioritization. I am married, have two kids, and am trying to juggle being a CEO, a mom, a wife, a daughter, and a daughter-in-law. The matrix looks at two dimensions: growth rate of the industry and market share. We’ll come out of this okay.”, Second, we kept on trying to practice what I call realistic optimism. Among the senior leadership, it is. Now let’s consider India, which has tiny stores. That’s the new reality. We’re bigger than many countries. The way that the CEO projects himself or herself on the organization sets the mood for the company. Indra Nooyi is married to Raj Nooyi, a management consultant of Indian origin. If we do not become greener than we are today, young people are not going to come to work for us. In periods of crisis, leaders can be tempted to take greater control and drive change from the top. The second element is environmental sustainability. This is more than a job—it’s a calling. The most important part of performance with purpose is the use of the word “with.” It’s performance with purpose, not performance and purpose, or performance or purpose. As she pointed out in a recent interview, “The most important part of per-formance with purpose is the use of the word with. Some of its notable alumni include Pepsi CEO Indra Nooyi, Israeli Prime Minister Benjamin Netanyahu, and … We’re bigger than many countries. We can develop hundreds of new products, and stores have enough space for them. You talk about thinking globally and acting locally. These include the ability to work closely with public officials and to exhibit emotional intelligence toward employees. They didn’t even say hello. Governments have gotten more intrusive. Greenwich Time. The downturn has reinforced all the elements of performance with purpose. Indra K. Nooyi on Performance with Purpose, Investisseurs principaux et capital-investissement, Industries de transformation et matériaux de construction, Transformation, redressement et restructuration, Diversité et intégration - Promouvoir la diversité sur le lieu de travail. We have a profound role to play in society, and we have to make sure that we are constructive members of society. © Boston Consulting Group 2020. When I was visiting India two years ago, I went to visit my mum, and she wanted me to dress up and sit with her as she entertained all her friends, neighbors, and second through fifth cousins, who were coming to visit. When I came back from India, I wrote to those parents and told them how much they contributed to the success of PepsiCo through the gift of their son or daughter. So by being visible and not hiding myself in my office, I was telling people, “Hey, things are okay. If you look around the world, there’s still growth, but we have to view our portfolio differently. My honest belief is that corporations are little republics in their own way. The third element is talent. You are dealing with governments, with NGOs, and with any interested party that decides to take on the company. How do we make sure that people who work for PepsiCo are able not just to make a living but also to have a life? In the developed markets, we work with large stores. In fact, I’d say that it was reinforced by the downturn. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo … Analysis of Several PepsiCo Brand Using a Boston Consulting Group Matrix Introduction The Boston Consulting Group matrix, also known as the BCG Matrix, divides brands and products into different categories based on their market performance. Our businesses in those markets need to tailor products, business models, and people practices to the local market. You cannot just swoop like a seagull into and out of a country or a city. January 14, 2010. She also stresses the need for leaders to have direct personal understanding of the markets and cultures in China, India, and other growth spots. Was performance with purpose challenged during this last 18 months as the economy worsened? And unless you deliver performance, you can’t fund purpose. When I was visiting India two years ago, I went to visit my mum, and she wanted me to dress up and sit with her as she entertained all her friends, neighbors, and second through fifth cousins, who were coming to visit. Performance with purpose is what I’d like PepsiCo to stand for. Nooyi herself spent two weeks in China last summer, making sure to get out of conference rooms and into the countryside and people’s homes. Biographies are supposed to be motivational awakening zeal in readers. Governments have gotten more intrusive. I am spending a lot of time with lawmakers, presidents, prime ministers, commerce ministers, health ministers, and NGOs. How do you find the time when you’re running a company the size of PepsiCo? We have enormous influence in the world. I based these observations on my wandering around the world and leading our company. Beginning her career in India, Nooyi held product manager positions at Johnson & Johnson and textile firm Mettur Beardsell. Be realistic, but don’t project doom and gloom. When all her guests came in, they ignored me. You talked about needing to be open to cultures and customs. They speak different languages, and their religious backgrounds are different. [Laughter.] During this downturn, people realized that it’s even more important to focus on portfolio transformations and to be green, because being green actually saves you costs. I’d like that to be the way we do business. It appears your browser does not support JavaScript or you have it disabled. Before my time at PepsiCo, I was at Asea Brown Boveri and Motorola, and before that, I cut my teeth at BCG. Third, we undertook brutal prioritization. That’s when I realized that I had not told the parents of the executives who do such an extraordinary job for PepsiCo that they themselves did a great job bringing up their children. The way that the CEO projects himself or herself on the organization sets the mood for the company. Then, you start traveling. Third, you must be able to think globally and act locally. During this downturn, people realized that it’s even more important to focus on portfolio transformations and to be green, because being green actually saves you costs. We can’t have an adversarial relationship. We increased R&D through the downturn. In the year 2006, Nooyi was named the next CEO and White was her competitor. Early on, we realized that we were going to have a slowdown. Sadly, this book is just tumbles down. Nooyi credited experiences early in her career as a strategy consultant with Boston Consulting Group (BCG) for teaching her inductive thinking that helped shape her leadership style. To be able to manage these young kids who are coming to PepsiCo, we have to be able to think digitally and be able to manipulate all this new technology. If you look around the world, there’s still growth, but we have to view our portfolio differently. We’ll come out of this okay.”, Second, we kept on trying to practice what I call realistic optimism. According to Forbes, she is consistently ranked among World's 100 Most Powerful Women. We launched a restructuring program in October 2008, and we made some fairly deep cuts to create some breathing room, because we wanted to keep reinvesting in the business through the downturn. It’s 24/7. It’s 24/7. If we do not transform our portfolio, we cannot sustain performance. Within PepsiCo, do you think that the importance of the global market is recognized? 62K likes. You are dealing with governments, with NGOs, and with any interested party that decides to take on the company. She is the current Chairman and Chief Executive Officer of PepsiCo, the second largest food & beverage business in the world (by net revenue). Fifth, you must develop emotional intelligence. Now let’s consider India, which has tiny stores. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Indra Nooyi. Indra Nooyi. We have to make sure people understand that growth patterns will shift. To be able to manage these young kids who are coming to PepsiCo, we have to be able to think digitally and be able to manipulate all this new technology. Are you spending more time with the external world now than you were before? Leadership Development, The economy enabled us to hire great people and make investments with external companies at a much lower cost since there were fewer companies competing for those resources. Boston Consulting Group est un employeur offrant l'égalité des chances. In a recent speech, you talked about five ways in which the role of the CEO will change. How can you stay true to the business you’re in while delivering choice in a completely different way—one that’s sensitive to the unique needs of a country? But I think it will take time for the rank and file to understand that international growth is a critical part of our future. She worked with Boston Consulting Group (BCG), Motorola and Asea Brown Boveri. Aspiring CEOs have to understand that they are signing up for a lot more than CEOs did in the 1970s, 1980s, 1990s, and even four or five years ago. So I picked my battles. Fourth, once we gave the line managers their agendas, we let them loose and said, “Go make it happen.” And the only time I got intrusive is when a business needed to be turned around. This is an old notion, but we must take it to a whole new level. We actually thought this might be the right time to make some long-term bets. We have a profound role to play in society, and we have to make sure that we are constructive members of society. They went to my mum and said to her, “You brought up such a good kid.” They complimented my mother and didn’t really focus on me. 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