Chairman and CEO of PepsiCo Indra Nooyi spoke during the Tate Lecture at McFarlin Auditorium April 4.
In her lecture, Nooyi outlined her seven lessons for running a company in the 21st century. She also cites these lessons as being seven values of a great leader. With these values that Nooyi holds to PepsiCo, she has seen ultimate success.
1. The need for a vision
Since Nooyi took the reins of PepsiCo, she changed the company to fit the current millennium with a vision of “performance with purpose.”
“I believed we needed to give a new sense of meaning, a new sense of purpose to the work we did every day,” Nooyi said. “’Performance with purpose’ was not a corporate social responsibility initiative. It was to fundamentally change the way we make money.”
Having grown up in India, Nooyi said she “had seen how international corporations could be either a force for good or a force for bad in society.” Her upbringing in India was also inspiration for her seven lessons.
2. Nobody can take our place in our families
It was 2006 and Nooyi had just received a call from her boss at PepsiCo that she would be the new President and head of the world’s second largest food and beverage company. She was on her way home at 10 p.m. and was excited to share the news with her family.
Her mother, visiting from India, Nooyi’s home, was standing at the door waiting for her daughter, but only to ask Nooyi to run to the store for milk, not giving Nooyi a chance to tell her the good news.
When she returned from the store, Nooyi was finally able to tell her mother the good news. “Okay, I had great news to share with you. I’ve been named Chairman of PepsiCo and all that you wanted me to do was to go out and get the milk,” Nooyi said.
“[My mother] looked at me and said, ‘Let me explain something to you. You may be the CEO of PepsiCo, you may be king, I don’t care. When you step into this house, you’re the wife and the mother first. Nobody can take that place. So when you walk in the door, leave your crown in the garage,’” Nooyi remembered.
3. People are everything
The first time she went home to India in 2007 after being promoted, Nooyi recalled an experience in which her success was not the focus of attention, rather, people recognized her upbringing.
Many people showed up to her house, saying hello to Nooyi before turning to her mother and saying, “You did such a good job with your daughter.”
“I realized then that they didn’t care about me,” Nooyi said. “I was just a prop.”
Though Nooyi used “prop” in a pejorative, jesting tone, it nonetheless taught her a lesson on the importance of people, specifically the importance of family.
“I have just one request of [the audience],” Nooyi said. “Try writing to the parents of your executives … write and tell them how awesome it is to have the gift of their child at your company.”
“And let me tell you one thing — the impact of these letters has been more powerful than anything I’ve imagined, and they’ve led to some of the most meaningful, heartwarming experiences I’ve had,” Nooyi said.
It is through this appeal to the heart that Nooyi found a lesson in doing business: you can’t just appeal to people’s heads. You must appeal to all parts of them, most importantly, their hearts.
As Nooyi puts it, “people are everything.” For a business setting, that means, “without a good team, you’re nothing.”
4. You have to keep learning
It’s fitting that another one of her lessons was, “you have to keep learning.”
“Among the leadership qualities that I’ve been trying to model is being a lifelong student,” Nooyi said.
Recently, that includes reading Big Data for Dummies.
“That’s the last time that I thought I was a dummy,” Nooyi jested. “Believe me, it is pretty dang complex.”
Learning as much as she can also includes another vital skill – listening.
5. The most important part of persuasion is listening
“It’s the most important part of persuasion,” Nooyi said. “I have not always been good at this.”
But the relentless struggle, even if it is relentless, isn’t without return.
“I’ve been better for it as a CEO and as a person,” Nooyi said of learning how to listen. “The best advice … comes from the most unusual sources, outside of the company, when you least expect it.”
6. Think hard about time
Nooyi’s time at Pepsi is also marked with the objective of duration. For shareholders, that means focusing, “not just on the level of returns, but duration of returns,” she said.
The objective is to build a company that goes on forever, that stands the test of time.
“Where would we be now as a country if more corporations were focused on duration as they are on the level of returns?” Nooyi asked. That, she said, is the larger question.
“Would we have seen so much volatility, as much of a turn as we’ve seen in the S&P 500 as we’ve seen in recent decades? Would we have a bigger manufacturing base in our country? Would we be seeing the same levels of inequality in parts of the country?” Nooyi asked.
Though humbly she responded, “I don’t know. I can’t say for sure.”
But it is with this thinking and these existential questions that she has taken to heart the concept of duration, with courage.
The courageous part, she said it herself: “How do you convince the seekers of short-term gratification that a corporation should be something that endures?”
7. The power of persuasion
The power of persuasion was another of Nooyi’s lessons.
Convincing shareholders is just one party to whom she spends her job convincing. Yet, no matter the audience or subject, “we didn’t leave our values,” she said. “We doubled down on them.”
These seven lessons translate into taking a more holistic purpose when it comes to business and making money – a facet capitalism often overlooks.
“I’m a devout believer in capitalist society, because capitalism is a glorious thing,” Nooyi said. “It has created more wealth, lifted more people out of poverty, and produced more creativity and ingenuity than any other system here in history.”
“But I’ve also come to the belief that we need to hustle in a more sustainable, more inclusive form of capitalism,” she said.
The classic form misses a part of the dichotomy, the part that makes a difference.
Like capitalism, there is room to grow. And as individuals and Americans, there is room for us to grow, too.