Former PepsiCo CEO Indra Nooyi: Lessons from the Top

0:00 Growing up in an environment where India had just come out of Three hundred and fifty years of British rule. You sit there going I have to pull myself up. You had a conversation once with Steve Jobs, where he told you not to be too nice. How did that candid conversation influence how you ran PepsiCo?

0:16 I think the biggest lesson I took away was he said what I was focused on was micro understanding. Because if you don't understand the business down to where the rubber meets the road. You can make decisions at the top. Which are not implementable. The business was a multi multi-billion dollar business. And remember if you don't earn your place, the people below you are waiting to push you out. So people don't realise that as you get more senior in an organization, it's up or out.

0:49 Welcome to the Knowledge Project Podcast. I'm your host, Shane Parrish. In a world where knowledge is power, this podcast is your toolkit for mastering the best of what others have already figured out. My guest this week is Indra Nuy. The former chairman and CEO of PepsiCo. who led a global transformation at the company as one of the most remarkable leaders of a generation.

1:10 What makes Indra fascinating isn't just her accomplishments, it's how she navigated her colliding worlds. An immigrant who became more American than most Americans. a dutiful daughter who became a corporate revolutionary. A mother who reached the pinnacle of power but kept her daughter's please come home note. Tucked in her drawer as a reminder of what she was missing. This is a conversation rich with clarity, resilience, and ambition.

1:35 Indra shares the surprising of how she almost quit PepsiCo, the unforgettable advice she received from Steve Jobs, and the moment her mother told her to leave the crown in the garage after being named president of the company. We talk about how to give feedback that gets heard. Why great leaders zoom in before they zoom out. and how real strategy always has to be implementable. If you're trying to lead better at work or at home.

1:59 This episode is packed with timeless lessons. It's time to listen and learn. I wanna start with this wonderful story about you and your husband. When you first met, you um went to a movie And you watch Silver Streak at the Sandberg Theater, and then you went out to dinner after. And you decided to get married.

2:22 But you're still not sure who asked who. Who proposed to who? I want the real story here. That that is the story. Sometimes I tell him, Why did you rush this proposal? I wanted to be dated and wooed and dined and wine. And he said, I didn't propose to you, you proposed to me. So I said, Why did you accept if I propose to you? And I think over summer, even though we didn't spend much time together one on one Um There must have been some spark.

2:51 And uh he's just a very good guy, to be honest. And I I guess he thought I was a pretty good person too. And so it was just a meeting of the minds, value system, families. Every which way. And I said yes without being wined and dined and He said yes without

3:07 You know, dating me and getting to know me and The rest is history and forty five years later we can look back and say, Huh, who proposed to whom again? That's such a incredible story. I I love these stories of couples that just it clicks right away. You might not know each other uh as well as uh some other people who get married and it just works out. My aunt and uncle I've never actually dated another person. They started dating at thirteen and they are still happily married today. It's incredible. Maybe that's the reason we're happily married because we started to date each other after we got married. And we started to discover each other after we got married. So we had that long process of discovery.

3:46 And in spite of that. We kinda liked each other. Loved each other. That's incredible. Uh, I wanna go back to your childhood in India. Are there memories or lessons that stand out from your mom?

3:59 That you still carry with you today. It's mom, dad, grandfather, the whole extended family, it's not just the mother. And I think that It was a focus on excellence. and doing well. It was it w it was d uh sort of beaten to us. If you're gonna do something, do it well.

4:17 Uh if you can't get good grades then You know, w what's your value to society? What are you gonna do for society? So it was always this thing about push yourself. Don't sit idle. Satan has work for idle hands. If you can read in every spare minute do it. That's the environment we grew up in. And we couldn't go complain to somebody else because our entire community was that way.

4:40 And so you sit there going, Who am I gonna complain to? If I complain to an aunt or an uncle they'll say, Oh, I'm doing the same with my kids. So we grew up in an environment where everybody was being pushed. And we were being pushed because We were growing up in an environment where India had just come out of Three hundred and fifty years of British rule. And was trying to find his place in society.

5:01 And we were looking at other countries and saying Wow. You know, there could be growth, they can be innovation. The economy could get a whole lot better. And so everybody

5:11 Needs to Pull themselves up to contribute to the country in order to make the country better. So that was the goal to push young people. And so you sit there going I have to pull myself up.

5:24 The family pushed you, but you have to pull yourself up. Everything in my childhood was about that. Working hard and Being a team member at home doing chores.

5:34 Uh not having much money at all. But Lots of discipline. uh freedom within the frame That's what I remember.

5:43 Uh but Work hard, study hard, and be viewed as a reliable person. If you promise something Deliver it. Okay, unless you're dead, you will deliver it. When you came over, like growing up in that environment, when you came over and you went to Yale.

5:59 Were you like this is These people don't work as hard as I do. Like they don't They don't come from this environment where you know, you're struggling to break out and you're You're sort of driven by your parents and everything around you is sort of pushing you forward and there's no option for failure. You have to succeed and you have to keep going. I actually came here, I was in awe of everybody I met. And I tell you why, because There we worked hard because the simple things in life we didn't have.

6:26 You know, if you wanted to Uh ir in a uniform. Half the time there was no power. So you had irons with hot coal inside them. Uh you know, s you have spray starch here. You know, we had to when I was in a Catholic school, the uniform had to be starched.

6:41 and you had to show up looking very crisp. Here you just buy spray starch and you spray it and you iron it on. There you had to make your own starch at home. And sometimes it would be clumps that would s you know, land on the uh uniform because you didn't really You know, cook out the clums and the starch that you made. And so we spent a lot of time doing things that people here didn't have to think about. We just went to the store and bought it, or you had electricity, you had water. So you took all that for granted.

7:08 We had to spend a lot of time on those un so called unnecessary survival tasks. growing up. So you come here and you watch everybody here going Wow, they're so brilliant. They think differently. They break boundaries. They are irreverent.

7:25 But they're reverent also in their own ways. How does one become like that. You know, I was more in awe of them rather than they don't work so hard. Oh it's just that The working hard part was on stuff that

7:40 was made easy in the United States. I never thought of it that way. Thank you for sharing that. There was a moment before you came over. And I think it was uh Norman. Yeah. And you went to talk to him and you said, Should I take this?'Cause you were about to take over sixty percent of factory. Or go to Yale.

8:01 And walk me through that moment and what went into that decision to because that's a huge promotion. That's incredible success. No question about it. I would have been incredibly young to run such a big part of the company. Would have been successful, would have been in a environment that I was quite familiar with. my expenses would have been nil because I would would have had to live at home, no issues with anything. Um but I had always dreamed about the United States because all my friends had come here and

8:30 Loved American music, culture, innovation, entrepreneurship, everything I read about Just fascinated me. And at that time the I mean, we're not talking about the seventies. America was the seat of culture and Just brilliance. And as a young person growing up, your dream is to be part of this environment.

8:49 So I went to Norman and said, Hey Norman, look Uh this job you've offered me is fantastic. Uh one side of me says take it and you know grow in the The other side of me says be a rebel.

9:02 Go and be part of this incredibly amazing country and culture and environment called the United States. And I knew one was risky and one was safe. And uh Something in me. Wanted to take that risky bet also.

9:17 But Norman was clear. He said, Look, if I were you, I would take the risky bet. Even though it would be a loss for me and the company. If I were you, I'd take the risk you bet with you may not get this chance again. And even though I knew I was gonna take on loan liabilities I could fail.

9:33 I was an alien country that I didn't have too much family in. I decided to take the plunge. Has that changed how you when you were like the CEO of Pepsi, did that change how you develop people where the best thing for Pepsi might have been for them to stay, but the best thing for them might have been for them to leave? Well at some point when people come to you and say I've got this great opportunity, you sit there going Would they be better off leaving? And in case I want them back, I can always go back and get them.

10:03 Or are they better off staying at Pepsico? Sometimes selfishly I look at this and say I'm actually better off if this person goes goes and gets this completely different experience'cause I can bring them back. So you always look at this in a nice selfish way. I don't mean in a uh negative selfish way, in a nice selfish way. Somebody went to a tech company, go there

10:24 I'm sure the allure of PepsiCo would make you want to come back if I wanted you back. And now I have somebody who's got the PepsiCo pedigree. has got a tech background. and now can come back and contribute to the company in profound ways. Or partner with me. So I'd look at it that way. But if I felt that a person did not have much runway in Pepsi. I would also tell them very honestly that

10:46 They might be viewed as a critical professional in PepsiCo. You know, they could have a career but not a fantastic career. And if they got a better opportunity somewhere. I would provide the reference. And I would help them.

10:59 Find something. I think if you really care about people development, you've got to think that way. I love that. Mm. After Yale you went into the consulting business, what did you love about that?

11:10 It was a sink or swim place. I went to the Boston Consulting Group in Chicago. We had just opened up And I'd never been in consulting before, and so this was a new experience. First of all, the calibre of people is just fantastic. Each one Who's pushing the other. You're operating at the highest level of a corporation. And

11:30 In B C you worked on two different assignments at the same time. So you had to understand two industries, the value drivers Two non competitive industries. What are the value drivers? How do you think about adding value to the client? in the assignment you're working on.

11:46 And so it challenged me in profound ways to first to learn industries, learn the economics of the industry, the value drivers. Think beyond the industry to see what insights you can bring to the industry. And Uh learn about dealing with

12:01 leaders in very high positions which I never done before. in the United States. I mean I had looked at these leaders as my God, so and so is the CEO and now I'm sitting in the same room with the CEO. How do I behave? How do I uh you know, articulate my point of view without sounding like I n I'm a no it all

12:19 There's so much I had to learn. In my six and a half years at B C I think I grew ten or fifteen years. It was tough it was a tough learning curve, but Man, I would never trade that experience for anything in the world. And a very competitive environment. Incredibly competitive. Günstig ohne App

12:37 Bei Aldi gibt es einen Preis für alle. Diese Woche Bio-Joghurt mit Crispy Müsli, 150 Gramm für nur 89 Cent. Oder Igloramspinat, 750 Gramm für nur 1,69 Euro. Entdecke weitere Angebote in deinem Aldi Nord. Aldi Gutes für alle. How did you go about learning about industries you knew nothing about?

13:00 It's surprising, you know, for example, let's say that I was working in the tissue business. Paper tissue. Uh I would actually go to factories. I'd go to manufacturing lines, had go to R and D laboratories, talk to Everybody that was willing to give me time because Consultants can't just sit there and articulate a point of view or provide direction.

13:23 without really understanding the details. So my philosophy was Zoom in before you zoom out. So in everything I've done, I always went deep into Whatever the business was, the company was the Try to understand things from the ground level. Then I'd zoom out and say

13:40 What's missing here? Why is the strategic direction In need of a re uh a tweak or a reset. And then I'd go back and say if we did reset it, how would it sit? in the front line, what changes would we have to make, then go back out. So this constant telephoto lens that I had in my head is what

13:58 stood me in good stead through my entire life. Zoom in. Zoom out, zoom in, zoom out. How did that help you at PepsiCo and your CEO in terms of understanding, you know, the right side of the decimal place at at the low level and then also, you know, thirty thousand foot view. Setting strategy for a huge company.

14:18 See, you should be careful not to micromanage. I agree with you. What I was focused on was micro understanding. Because if you don't understand the business down to where the rubber meets the road. You can make decisions at the top. Which are not implementable.

14:34 Or in the implementation. The intent of the strategy gets lost. To me strategy. And implementation have to go hand in hand. And very often the reason operating executives rise to become CEOs is because the belief is

14:50 They know how a strategy has to land. In the front line. In my case, I didn't grow up in the operating businesses. I grew up in strategy. Finance. you know, corporate operations, not You know, PL.

15:03 So my replacement for having not run a P L was Go and learn each business from the ground up. So you know, whether it was Steve Reinemann who gave me an opportunity to learn the right side of the decimal. whether it was the work I did with the Fritul A distribution system, it was always Zoom in.

15:21 Learn the business bottom up. And have the humility to tell people to teach you the business. People like it when you tell them, Hey, can you teach me this business? Yeah, I'd go to the R and D laboratories. I'd tell them Teach me how the concentrate is made. Teach me how the Fridole

15:38 uh you know, a chip is produced, a laze chip or a Doritos chip. I'd walk the manufacturing lines, walk the research labs, talk to people. I spent an enormous amount of time doing that. What was the right side of the decimal lesson? Wha I I forget what that was. So you know, when you're sitting in corporate as a CFO or the head of strategy, you're thinking in millions, tens of millions, hundreds of millions of dollars. That's the left side of the decimal. But money's not made always in the hundreds of millions of dollars. It's Can you take a penny out of uh

16:09 Delivery. For free to lay. And when you have so many routes times a penny, it adds up. So on a daily basis. You've got to think about A tenth of a penny, half a penny.

16:21 Oh. on a package or on a route. So it's that little micro pennies that add up to the whole business. So if you don't understand the business at the most granular level. You s you come at it in a very different perspective. And people don't understand you because you're talking in

16:38 Tens of millions and hundreds of billions and they're like I'm sending a Twenty five cent bag of Doritos. A forty five cent bag of Tostitos. What are you talking about? Don't talk to us about millions.

16:50 We gotta Cut a penny out of his route. Or cut a penny out of the packaging cost. to get the profitability up. So you've got to be able to talk that language. So the left of the decimal is that language where you sit down with a team and say

17:03 Can we take out two cents? From this entire product package. That reminds me of JD Rockefeller when he was first starting out with standard oil and they were welding the oil cans that they were shipping it in. They were putting I think it was thirteen welds on these and we do it with eleven. Yeah. And those two wells would make a huge difference over the volume that they were doing. I mean the example is when we decided That it's an imperative that we reduce the water usage in our beverage plants. Right? We were using two and a half liters of water to make a liter of Pepsi.

17:34 No. I want to get it down to one point two or one point three. And it's not enough to provide a a dictate and say, get it down to one point three. It's a question of What does it take to get it done? Let's talk through it. Where do we use the water? How can we recycle some of the water? How do we need to clean it to fish bond standards? You've got to ask all those questions so that the R and D people realize that.

17:57 You're not just providing a mandate. You're basically saying, I'm gonna help you get to the right answer. So then you said gold saying. By year two let's get to two liters. Then let's get to one point eight, one point seven. Here's a meaningful step down. over a reasonable period of time so that we can get to the one point four or one point two within five years. So it's having respect for the front line. So you talk to them in a language that they're familiar with as opposed to waving your hands and saying

18:27 I wanna say a hundred liters of water within two years. And people go Does she know what she's talking about? I wanna come back just for a second to the consulting and one of my favorite anecdotes from this Your book was

18:40 When you were sitting in a bar in Green Bay, Wisconsin. And you were listening to the line workers talk about the problems in the business. And you were getting insights from that. And I thought that was like so unique and I'd never I've never seen anybody document that before, and I'm sure people do it. Are there any other ways that you went about learning that were sort of off the beaten path that provided valuable insight like that? Well the one of the most interesting ones was um

19:07 I was working for a particular industry and uh a competitor was building a big plant. And we wanted to know how big the plant was. How many how many bays they're gonna have and What kind of bays, what kind of transportation? And we couldn't get enough information from the local filings or whatever, and the plant was being built in a very wooded area.

19:29 Um so it was a highly wooded area, but the middle Was cleared for the plant. And a big lesson I learned is that in the United States, don't ever say the data's not available. So you didn't look hard enough. 'Cause the data is available somewhere.

19:44 So I kept digging and digging and digging to see where I could get this data. Until and the US government has got fantastic data available. Somebody from one of the departments said, Oh, I know where you can get the data. If you did an FOI a freedom of information request to the intelligence department And ask them to give you satellite photographs.

20:03 Of the Plant. From different Altitude. Ding we're pretty good.

20:09 picture. And I did that and in a few days I got the pictures at like five thousand feet and three thousand feet. And I now know From the top what the plant looked like, the size of the plant, You know, what kind of base? you know, what kinds of products they might be considering manufacturing there. And so

20:27 The valuable lesson is don't tell me you can't get the data. find a way to get the data because in the US directly, indirectly, tangentially You can get enough information and data. Two.

20:40 you know, really develop hypotheses about the issues you're working on. And so I've always kept that in mind. P when people come to me and say, I don't know how to get this data, I say, Come on, go look hard. It's there. What an incredible story. Are is there another example like top of mind that comes to you when you think of that? Well, when we were doing covet, the question is

21:00 Uh we didn't use it as much, but one realized this was available to us. Um, you know, when you had to do tracking to see Who's got covet but not declared it and how big could the Transmission B. you know, the syndromic surveillance, which is a well known

21:16 Mm. May you Uh look at their Um Driving patterns. If they keep going towards

21:23 A pharmacy and buying tests. You know that they might have Covid, okay, so you gotta immediately track that person to say, should that person be socially distancing? or quarantining. So they're so looking at the wastewater that comes out of their home, you can tell whether there's covet. So I think It's how do you triangulate on data using multiple sources. Now with social media you've got lots more opportunities to

21:48 track people, know what's going on. Without invading their privacy, you can get all this information. Those days it was all paper and pen and you know A pouring through boards of data. As a leader, you've called yourself blunt and direct when delivering a message to people. I'm curious what you've learned about Delivering a message that gets heard. You know, it's a evolving process, if you want to call it that. Sometimes you people d deliver messages that are not heard.

22:16 Because You haven't really delivered the message. Candy. People actually come out of performance appraises and say, I think I'm doing a good job. And you're going to be able to do it.

22:26 Oh my god, I hope. That's not what you heard. You're saying to yourself, because this person was supposed to have told you the three or four things areas that you're supposed to improve upon and The three or four things that you did wrong?

22:38 You're supposed to have gotten very direct feedback. People don't like conflict. People don't like to deal with issues. Directly. They like to beat around the bush and then leave saying

22:49 I think I give the person the message. I had the opposite perspective, which is Give the message, do it in a supportive way. And make sure that whatever you tell them they have to work on, you help them get to that. So I chose to write performance appraisals which said

23:05 This is what you've done well. This is where I think You didn't do well. This is what you need to work on. And if you were to work on these issues and show progress, this is where you could go. So you see what this letter did was

23:19 Celebrate them for what they did well. Told them what they didn't do well. Told them. The three or four things they had to demonstrate. Progress on

23:29 in the next year and how I was gonna help them. And then also told them, If you showed progress, this is your trajectory. Because if we don't do it I think we're not getting the best out of people. There's a kindness and clarity.

23:42 Toughness, kindness, and clarity all three. But don't forget the toughness. Because You're confronting them and saying, you know. I asked you to really get to know the international markets.

23:53 You made two trips internationally last year. And each trip in three days you came right back. How could you have learned international markets without getting out of the office in the US? Okay? And then you write saying, I'd like you to visit the following countries next year. And when you visit those countries, make sure you w go down to this level of detail. You know, some people would say A CEO shouldn't be getting to that level of detail.

24:16 Yeah. They're right. But if I truly care about this executive and I think they have great potential, I will get to that level of detail. And I will monitor it middle year of the middle of the year and say, Hey Did you make any international trips? Did you follow anything I said?

24:31 And they say nah really don't want to go, then you go back. You know, you don't have the potential to be a CEO. From the outside, we hear these stories about how CEOs pay attention to the top fifty at the top one hundred. How many people inside were you really monitoring and trying to develop and having a personal, a real one to one personal relationship where you're doing this and you're in the weeds and you're in the performance report and you're trying to build them. I think there's about three or four hundred that were corporate assets. And one watched them all the time because these are people who in fifteen years could be CEO.

25:04 There's something about them that you know you sort of caught your fancy when you were in a meeting. Or uh in some project that they were on, they had brilliant ideas. Not brilliant ideas that reinforced your thinking. Brilliant ideas that challenged your thinking and took us to a better place. Because you don't want yes people around you. Um you want people who say, Why don't we push the boundaries of our thinking? What if we approach this creatively?

25:28 And people who put the company before themselves. I look for that all the time. Uh and so There were three or four hundred people that We actually call them corporate assets.

25:40 And we track them. We game plan them, give them the right assignments, and even if they couldn't move Could we give them interesting assignments so that they could Get the experiences without constantly moving.

25:53 So that's the number of people Uh Retract. What were the signs that somebody was putting the company ahead of themselves? Uh they would put their hand up for difficult assignments.

26:03 Mm-hmm. If something went wrong, they didn't look for somebody else to blame? they would take the blame and say, Hey, you know, I could have done a different job, or I could have led differently, or I could've staffed my team differently. Um These are people who

26:18 would come to me and say, you know Whatever's going on in this other part of the company I think Maybe Putting something in jeopardy.

26:27 And I'm not throwing them under the bus. Would it be okay with you if I went and worked with them? To perhaps write things. And I said, Be careful how you do it. But go for it.

26:37 Can I Well tell them that I didn't send you there. That you were doing it out of your own uh good nature. Otherwise people say oh the C has got some pets that she's sending Oh they.

26:47 So you've got to be very careful how you deal with organizational dynamics, but These are people who look around themselves and are constantly looking for ways to improve the company as opposed to How do I get the next promotion, the next raise? Are there things you've learned about

27:02 uh reducing bureaucracy, increasing meritocracy, and decreasing sort of company politics, obviously in a company the size of PepsiCo with h hundreds of thousands of employees. Uh, there's a little bit of politicking going on, but how do you minimize that and how do you find and promote the best people? That's a Very important question, Shane, because I think you have to understand the politics of an organization. Where there are people, there's politics, okay? You've got to understand the politics, but don't play in the politics. Don't meddle in the politics. Just understand Who doesn't like whom and you know how meetings work just understand it.

27:40 And then figure out how best to contribute within that. Once you start to meddle in the politics and gossip about it. You become a negative force. That's been my mantra. through the entire time that I was in corporate America. Because

27:54 meddling in the politics, playing the politics, becoming political yourself and gossiping. It's only a formula for disaster. Focus on the job. Focus on moving everything forward. I think things would be great. Now, I was helped because of the fact that I had a family and kids.

28:10 So Work in the office, I had to go home to the family and kids. I had no time for bar talk or going out to dinner and talking about the politics and I really didn't care about it. What about bureaucracy? Was there ways to I mean, there's a natural entropy to these large organizations to hire somebody to do this job and then they they make that job important and Parkinson's law, it takes up all this time and you know, you're distancing yourself from it, and if you let it go, it just becomes, you know, at the extreme, it becomes government.

28:41 Uh and you go bankrupt. And how do you how do you fight that? Companies like PepsiGo. At least in my time. I can only talk about the time when I was there. Um You know, we had very good scorecards to measure productivity.

28:54 Uh and we've monitored that constantly. You know, is our output per employee going up? How many spans, how many layers do we have? Are we adding layers for no reason?

29:07 Uh yeah, we monitored all of that. carefully. And that's why the company was successful, because No, it's like an accordion. Sometimes you end up adding a couple of layers and then you say, Hey, wait a sec, how did this happen? Why did we drift there? Let's get the number of layers down.

29:22 uh you know, we see certain levels of people have to have at least eight reports or ten reports. So we have Different ways we triangulate. On organization, hierarchy, levels, bureaucracy, overhead. We look at all of that. And uh because our targeted process

29:40 uh for the businesses and for the company as a whole As always. reasonably stretched. It's never Um easy target. It's always a reasonable stretch. Then we always promise the street. A number that's lower.

29:56 than what we set ourselves to do. Right. Higher. we always had internally stretched goals. And we promise the street something.

30:11 More reasonable. We never got paid if we didn't make the stretch goals. The bonus we never paid out bonuses without the stretch goals. So that was the performance culture in PepsiCo. For every leader that was there in the company. You mentioned

30:25 kids and one of my favorite stories from your book, and I'm gonna read this'cause I wanna make sure I get it right, is when you got promoted to the president of PepsiCo and you drove home after work and you were so happy and you're feeling so confident about yourself and When you got home, your mother was there and you told her you had the most incredible news and and she told you the news can wait, I need you to go out and get milk. And you went back in the car and you drove to the store for milk and you came hopping mad telling your mother I've just become president of PepsiCo and you couldn't just stop and listen to my news.

31:01 You wanted me to go get the milk. And your mom said to you, listen to me. He may be the president of whatever of PepsiCo or whatever. But you come home, you're a wife, a mother, and a daughter. Nobody can take your place.

31:15 So leave that crown in the garage. Mm-hmm. What does that teach you about power and humility? Well, you know, we grow up with all these dualities, especially as you ascend to the top. The dualities just grow.

31:29 Okay. Power and humility was a set of dualities that I had to struggle with always. Uh because I chose to be a mother. I chose to get mad.

31:40 I chose to work hard and ascend in my career. I was helped along by other people, but I decided I'd like to keep working and I'd like to do well and move forward. So when I make those choices I can't Delegate all of that to somebody else. Um I chose to marry an Indian man, which means that

32:00 There were some duties and responsibilities that went with being a person of Indian origin. I didn't shoot them. And so having made those choices, she was right. Um somebody else can take my place in the company, but at home Who else is gonna be the wife and the mother and the daughter?

32:17 Nobody else but me. Um and so I knew that I had to play those roles and play them well. So the real question was since I made all those choices How do I get the support structure? And uh

32:31 Have the resilience to play all those roles. It's not easy to play all those roles, okay? Um you can't just come home and start bossing your kids around because they say, I don't work for you, mom. My kids have told me that. Stop treating us and Like we work for you, don't give us instructions. Um and so it's not that I Talk

32:49 the people work for me that way, but somehow they interpreted it as I just sit there in a chair and I boss people around. Little do they know. But they would say we don't work for you. I said, Yeah, I understand. Um and so I think that All that she was

33:03 Telling me was Just constantly remind yourself. As to all the roles you play. And don't just think that you can walk away from any of those rules because you made those choices yourself. Do you see that as balance or do you see it as harmony between these things?

33:19 There's nothing called balance. Word balance. You know, any time you use the word balance, I think of this beam sitting on a fulcrum as perfectly still. Yeah. It's it's juggling all those

33:32 Rules. It's not even uh harmony. I sometimes it's not very harmonious. You just juggle those roles and hope the most important balls every day don't fall in. Crash and burn, so That's all you do. They're all full time roles, each one of them.

33:47 I think this often with you know, uh being ambitious and driven and working hard and then also holding myself to an incredibly high standard as a parent. And it motivates me and it simultaneously like having those standards can also be um Counterproductive. Uh, because you're so hard on yourself. Is there any advice?

34:10 You gotta start off by saying, Look, the job is a selfish thing. Okay, we love the job. We love You know. Working on challenges. Um

34:19 But when you have kids you've got to understand it's a tether. It's a beautiful tether, but it's a tether. It's a loving tether. But it's a lifelong tether. And so Uh I think you should have kids only if you love having kids. I mean

34:35 I adore my kids. They may not think that always, but I just adore my kids. Um I love them more than anything in this world. And so

34:46 Does it cause angst at times? Yeah, it does. So sometimes I sit down and say, God, I wish I could just work on this problem. Uninterrupted? Yes. But that Ther comes with some responsibilities.

34:59 And so I have to have the resilience to balance all of those things. So each of us as parents, working parents have to find a way to manage all of these priorities and not lose ourselves. So what you end up doing is Giving up some of the things that you wanted to do for yourself. Just

35:16 Forget them because You've got to see it through the eyes of your kids, through the eyes of your spouse, through the eyes of the job. You have to morph into a new Bing. That's a reality.

35:27 And when you were CEO of Pepsi, your kids were pretty young. How did you manage the information flow, just the volume of information that goes to the CEO? How did you Do your full day at work. You I imagine you had like a homework bag almost where you're coming home with, you know, two or three or four hours of homework as well. But you gotta put dinner on the table, you gotta be there for the kids. How d how do you w what did that information flow look like? I had two or three. Skills.

35:55 Talents, I don't know what you want to call it, or curses. I didn't sleep much. Okay. So you know, you can either say that was wow, you're lucky or man, I wish I could sleep. Um I had a pretty good memory. I could read anything and It'll stick in my brain.

36:11 And I was a speed reader. All three happened. I had a support structure between family and then later on I could afford to hire help. I had a support structure. So to put food on the table, the food was prepared.

36:26 And then the most important thing is I had a supportive spouse. Oh. The role that my husband played in this hall was just fantastic. And if I wasn't there he made sure the kids were taken care of because he was working full time too. And I did

36:40 The same and he was Traveling. And so I think the two of us worked as a team. We had support from family. A little bit, but mostly the help around us.

36:51 We're like family. And the weekends we had no help. It was just us. But then we said, look, the weekends we were just devoted completely to family. I never went into the office on the weekends most of the time, but I work from home. 'Cause there's just lots to read. When the kids did homework, I did homework.

37:09 And so was I always there for the kids? I'd say no. But you don't get to be CEO by being the perfect mom, the perfect uh wife, the perfect everything adult. You do the best you can, and that's all I did. Do you think a lot of people are unwilling to make those sacrifices? It's hard to make those sacrifices. I mean I'd like to say it's easy. It's not.

37:32 You look back and go, Oh, God, I missed all of these things I could have done for myself. I missed all these funny events. I miss twenty date nights, yes. You missed all of that. But You know? On balance if you put it all together.

37:44 The whole Package worked okay. I see this often. We hold up CEOs and entrepreneurs and people starting a business as a sort of we want that, but we don't want all the things that come with it. It's that climb, it's a tough climb. Anybody who thinks it's easy to get there.

38:02 And then keep the job as time. I mean I'm Every organization is a pyramid. Okay, it's not a cylinder, it's a pyramid. So As you go from the bottom layer of managerial positions to the top

38:15 Think of it in Pepsi on the bottom lay probably fourteen, fifteen thousand people. By the time you get to C or minus two, you're at about Sixty or seventy. C or minus one down to fifteen. So you've gone from fifteen thousand to sixty to fifteen to one.

38:31 Just think of the time. And then This is all happening at a time when the world around you is changing so much. So you've got to keep up with all the changes in the world. And you've got to make sure that you earn your place in the next round.

38:44 And remember, if you don't earn your place, the people below you are waiting to push you out. So people don't realize that as you get more senior in an organization, it's up or out. So just keep those jobs is very difficult. Is that why there's a lot of turnover after a CEO change, like when you were promoted to CEO? The people you were competing with for CEO probably left.

39:06 I kept many of them because I told them look I may become CEO, but I can't I don't see why we can't work together. Most of them stayed. Uh, after two or three years they got CEO jobs and they left, but many of them stayed. But you're right.

39:20 You know, when you're when if there are five people competing to be CEO and only one is made CEO Typically what happens is other companies grab them. Especially for a company like Pepsi, which has a great leadership development. People came and grabbed them. And so they go off to be CEOs, which is good because you've got Pepsico alumni now running so many companies.

39:40 Uh but You know, you've got to think about this math, which is pretty tough. When you became CEO I'm I'm gonna rewind after this and go to pre CEO, but when you became CEO, you walked into your general counsel's office, Larry, and you fired him. And you hadn't thought about this beforehand. And then he looked stunned and about ten seconds later you hired him back. What was the importance of that? I had to make sure that all the people working for me knew that

40:06 they were working for me the new CEO, not just carryovers from the old CEO. Typically what happens when you have carryovers is that People wonder if you can trust them. there's any bad feelings between you and the old CEO, but you want your own team. The general counsel is one of the most important jobs. And even though I worked very closely with Larry and I adored him

40:27 I didn't ever want him to think that. He was always going to be viewed as a carryover from Steve. Even though Steve and I were best friends. Um great colleagues. I respect Steve enormously.

40:38 So I had to make sure Larry realized that I w I'm gonna respect it even more. If he was now my hire. So I walked in and said, Larry, you're fired. But I did it with a smile. And he just looked at me and said, What do you mean, boss? I said, Okay, you're not hired as my general counsel.

40:54 He burst out laughing and I mean I my first years at PepsiCo, my early years as CEO successful because of Larry. What are the general counsel? Well, even he said that that was an important moment because it reset him as well to not being a holdover and to to being there. Is it

41:11 When you mentioned you sort of like the old CEO around, if a CEO goes to the board, how does that impact the new CEO? The outgoing CEO is never in the deliberations. You provide your perspective, then you leave the room. The board picks the next CEO because remember the outgoing CEO doesn't have to deal with the new CEO, right? And so Uh that's what happened when Steve Was stepping down?

41:34 And that's what happened when I was tipping down. I told the board what I thought the company needed going forward. I gave them the dossiers of four or five people and said These are all the pros and cons of each candidate based on what the company needs. And this is how these people have evolved over time, the trajectory of their development over the last five

41:52 Or seven years. But it's your decision. You need to deliber deliberate You need to interview each of these people. You need to do your assessments. But at the end of the day, I'm gone.

42:02 Mm-hmm. You have to make sure the company stay successful. based on the choices you make. And so the board deliberated diligently, met each candidate one on one and Got to know them and spent almost two years deciding who should be CEO. So

42:18 That's so mm. That's the way to do succession. And so I think Outgoing CEOs. can develop people but they don't select the person.

42:28 When a CEO steps down, is there a risk if they join the board of the company they're stepping down from a CEO? Uh in a way that limits the incoming CEO in a way? That's my belief. I think an outgoing CEO should just leave. Should not sit on the board because then you're Sort of coding. What the new CEO can do.

42:48 Because they're now always looking over their shoulder to see If They can take a direction that's different than The CEO sitting on the board. Terrible situation.

42:58 When I stepped down as CEO, I told the board I wouldn't be chairman for more than two months, Max. And then I'm out. 'cause I wanted the new CEO to have total flexibility to do Whatever he wanted. While we're on boards, uh you're on many boards, including Amazons.

43:16 What's the difference between being the CEO and being a board member? When you see you, you're it. When you're on a board you're Uh one among peers. So it's a group of you collectively.

43:28 That are serving the company. Nobody is more important than yet. We're all doing it together. So it's got to be Uh you've got understanding you're dealing with peers. And together we are the board first. Point number two.

43:41 Um There's a Deep urge as a CEO to want to manage the company. You cannot manage the company, you can only provide direction, idea, suggestions to the company. And what about the governance of the company?

43:54 Um so you've got to make sure you don't dig into the weeds and create confusion as to Whose direction should we be taking? So it's very important that CEOs Forget their CEO ship. and put on a board hat. And always ask yourself the question When I was CEO if a board member behaved the way I'm behaving now.

44:13 Would I have liked it. Oh, that's a good question. You always ask yourself that question. And if you say, Oh God, I would have hated it. And change your behavior. Okay, so understand the roles of the CEO and understand the role of the board member.

44:26 And the third thing is You know, when you're a board member of the company Remember that The shareholders are expecting you to play the role of

44:36 You know, setting the right strategy, picking the right Now leaders, all of that are the roles that this uh companies expecting you to the shareholders are expecting you to perform. Focus on those things. Focus on the strategy. Focus on leadership development. Understand the business so you can marry it with a strategy. Focus on those things.

44:54 Don't try to get into the weeds and Try to micromanage quarterly results, annual results. It's just not You're all You've spent your life in strategy.

45:04 W what is strategy? You know, it's a nebulous concept, but it's a very clear concept on the other hand. The strategy in my uh books is Uh crafting a path forward. for an entity.

45:18 But Allows it to Execute on that. Path forward. With superior results.

45:25 Can you never craft a strategy so that your results are diminished? You always craft a strategy to improve your results. But if you craft a strategy which is not implementable, it's not a strategy. So strategy requires Implementation with it?

45:40 And a place is better. Then where you are today. Both are difficult to'cause you have to almost anticipate what the outcome of the strategy could be. It can be implemented and you're gonna get to a better place. And that's the challenge for strategy. You've almost gotta have a three hundred and sixty degree view of the environment, of competition

45:58 of the markets, of customer revolution, everything else. And then you're crafting a path to say This is how we should proceed. This is why it's gonna be better for us than it is today. And incidentally.

46:09 If the world around us changes, we're gonna zag a little bit. But we're still gonna focus on getting to a better place. That's why I think strategy requires unique skills. Zooming in, zooming out. being able to have peripheral vision constantly.

46:24 learning from other industries. That's where consulting was a huge benefit because that's what consulting taught you. Strategy consulting. And I think that's what I sort of took to heart and everywhere I went that's what Stood me in good stead. There's two times that you've mentioned in this that it has to be implementable.

46:44 What's the importance of that? Is is that something that comes up often, or is that the difference between academic strategy and sort of real world strategy? Yes. Definitely the latter because very often Strategy as it as it is taught. It's taught by people who've never run a company, never implemented strategy. So I'll give you an example.

47:04 Um In business schools they teach The fact that organizations A siloed And

47:12 Siloed organizations are terrible. You should have information exchange with an uh divisions in the company, et cetera, et cetera. But then you know universities are the most siloed. Places.

47:24 There's hardly any Sharing of information across departments is the most salute organization. They're teaching something which is not implementable in that entity. So from our perspective, if I go into an uh into the company and say

47:39 I want power of one. I want perhaps you go to practice power one. As opposed to Fruit or any beverages. I'm not gonna say

47:47 What is power of one? What do I mean when I say power of one? What all do I have to change to make Power of One happen? Where can the friction be in the company to implement Power of One? How do I provide the right incentives to remove that friction? Because at the end of the day, Everything has to happen through people. So you've got to understand people. And you've got to understand all the changes you've got to make to people, processes, incentive structures, everything.

48:13 To enable a change to happen. And that's what I mean by implementable. Don't just sit there saying we should have power of one. Talk about what is it gonna take to implement it. I understand where it could be derailed. Anticipated. Keep addressing it. Watch for signs when it's not working well. See what changes you've got to make. So you've got to be very alert when you're making a change.

48:35 You're one of the few people I've interviewed that that started with removing friction, which I think is beautiful. Most people start with force. How do I make this happen? How do I will this how do I push through the friction? Most of it is friction in organizations, friction points which you've got to look for and Reward it. Coming back to the board just for a second here. What's the difference between a good board member and a great board member?

48:59 A good board member probably does governance well. And um knows all the board rules and can show up at a meeting reading the material. A great board member reads a lot more than the material that's provided to you. You know, go read everything that's available outside on the company, it's businesses, it's competition, technologies, whatever. So when you come to the meeting.

49:19 You don't just Do what the basic stuff required to get through the two days of board meetings, but you're adding value over and above the basic requirements of the board. Uh and so when you provide insights that are

49:33 really um c cause the company to pause and say, God She's got a great point there. Let's call back and say, Hey Indra, can you tell us more about what you m meant by that Now you're really a value added board member. As opposed to yeah, so's a good board member.

49:49 Read the board material. Made sure that Governance was ticked off. I think That's the table stakes to be on the board?

49:57 But a great board member does a lot of work themselves to read way beyond what the company gave you to read. I love that. Amazon is known for doing things completely differently. Yeah uh internally, including their their memos to start meetings and stuff like that. What are the lessons that you've learned from being on the board there? That might have been counterintuitive or new to you.

50:19 You know, the entire company is focused on the customer. The obsession of the customer is something else. And it's always like how do we make customers' life better? How do we lower costs for customers? How do we improve delivery times? How do we Uh latency, all of these things are what they focus on all the time. So I've never m been part of such a customer obsessed company. Okay. PepsiCo is consumer focused, but these are customer obsessed companies first.

50:45 Second Uh Amazon has paranoia about Well, you know, sort of devolving into hierarchy and uh you know, what they call losing the day one. Day one culture being when they were young entrepreneurial.

50:59 how hungry they were and how How they hustled? They wanna have that hassle culture all the time. The fact that they're paranoid about it. Even today, given their size, is what blows me away. They always scared that they will lose that day one culture.

51:14 And so you've got everybody hustling to make sure that hierarchy is not built. Bureaucracy doesn't kill ideas. Uh and so anybody can come up with an idea as long as they can write a six page document and present it to people. And you know, seek funding if your document is good. So I would look at Amazon as this gigantic

51:33 Day one company. That's customer obsessed. It's an unusual culture. Uh the c culture that's prevailed. A culture that's

51:42 Constantly re examined. So that It never Uh ever uh Changes.

51:49 From this day one hustle. And I feel privileged to be part of this company. You've led directly as CEO through many crises, including uh I think you had a food Safety scare while you were CEO of Pepsi Co. What are the differences between I mean academic and real world leading to a crisis, I guess would be a good way to frame this. No academics teach crises, which is good because how else will students learn about

52:16 what pe leaders did in crisis. So I I respect academics who teach all that. And they do a good job of doing the teaching. The thing is when you're in a crisis It's happening in real time. Public is writing about it. You're being Taken down the eyes of

52:33 Everybody in the media and investors, analysts Uh your home. Everybody's scared because your face is on the T V saying What the hell's going on? And it was even tougher for a female CEO because You know, women's CEOs

52:49 Got a lot more attention. than men. And so Um when you're going through a crisis First of all.

52:57 You've got to understand the crisis down to the details as opposed to we have a recall. Sit down and get your R and D and manufacturing guys and say Tell me about this in a lot more detail. Ask all the questions you need to ask. to understand exactly the root cause of the crisis. then let them give you a plan as to how they're going to address it.

53:17 Then step back and decide what the messaging is going to be. Very often people don't take the time to really understand the root cause of what causes crisis. And don't listen to the plan. And then they try to pass the blame onto somebody else. As a CEO, the buck stops with you. How does that go with positioning? I love this because uh how do you take what's happening? You've agreed that this is the plan, this is the path forward.

53:40 You have credibility with this. I think we can do a lot with this. And then how do I position that in a way where the company is moving forward in the best way possible, but you're positioning it for an audience too, to to be receptive to it. And not pass the buck. Honesty is critically important. When you have a crisis Be honest with your employees with the outside world saying

54:01 This is the crisis we are facing. This is how we're gonna address it. And we will give you an update on this time frame. Honesty means uh I mean, it changes the whole game. Because when you try to Use big words to hide.

54:16 the crisis, so you just try to deflect Responsibility people just don't have time for this, including your own employees. Okay. And so um I'll give you a little crisis when we had our second activist invest in the stock.

54:30 It was a crisis for the company because nobody likes to have an activist in the stock. I did a town hall and I told everybody. I said, Look I'll give you regular updates. On the activist. You see it on TV, ignore it.

54:42 There's the general counsel, the CFO, and I who'll handle the activist. Your job is to just keep focusing on delivering performance. That's your only job. Don't worry about the other distractions. And you can be sure. That three of us.

54:56 have the company's best interests at heart. And they all knew that I always put the company before me. I said, We have the best interest of the company at heart, but we will keep you informed. But your job. Yes too. Mm.

55:08 Driving the performance. Deep down inside, you know, I was in turmoil because I had to deal with all of this stuff instead of just focusing on the company. However, to the employees, I had to show that I was calm. I was in control. And then I was going to take them to a better place.

55:26 So I think boards Pick leaders. for resilience, ability to manage through crises. And can you stay calm through it? Mm.

55:36 The second activist investor you had, was that Nelson? Nelson Pills. Yeah. Walk me through that. What was that like? What was the engagement with them like? I mean, it's so far in the past now that it's all sort of come out, but from your point of view. It was a typical activist book. He wrote a white paper and gave it to me. I mean I knew Nelson Pells for years. I liked him actually. So there was no um strangers walked off the street with the white paper. It wasn't that way.

56:02 He done his work. Most activists pick data selectively. To make their case. And so when he gave me the white paper, I didn't sit here going I'm not gonna listen to you. I said, look, let me study his white paper because he may be the external activist. I'm an internal activist. I want this company to do well. So why don't we look at his white paper as a

56:21 Free consulting report. And let's pull through it. If he has any ideas. that we haven't implemented in the company, let's take those ideas. But we're not gonna make Big changes to the company just because Nelson said I had to make it.

56:36 We'll make it if it makes sense, said For this company. And if we can keep performing at the level we're performing. So I was clear on the company's strategy, the board was clear on the company's strategy. We

56:49 Listen to everything Nelson said because we have great respect for him. Okay, so there's a lot about blowing off activists as terrible. S some companies do that. I didn't do that. I said I'm going to treat him with respect. Every time we wanted to meet, I met. Anytime he wanted to meet a board member, they met with him.

57:05 But every time he proposed something We said look, we're doing this because of the strategy. Of this direction because of these trends. If he wants to change a strategy, it's because you think the trend has changed. Has the trend changed? No, it hasn't.

57:20 Then if the trend is that way, that's our strategy and we're not changing it. Okay. So he came around. I mean he's a a smart guy. He came around and we've remained friends since there's there's no question about bad feelings or anything of that sort. Often activists want a board seat or demand a board seat. What are the pros and cons from your point of view as a CEO of letting an activist investor onto the board? And at what stake do you think it makes more sense uh even if you disagree with it? What ownership levels? Well it depends on the board member they propose. You know, Bill Johnson from uh who we used to run hind came on our board.

57:55 Um and Nelson actually suggested Bill Johnson. But What Nelson didn't realise is that Bill Johnson and I knew each other and we were friends already. So when Nelson recommended Bill Johnson was a welcome thing for us because he came from the consumer world, knew us well. Now had he recommended somebody who was disruptive. We may have paused and said, Don't want that board member because you don't want to

58:18 Spend our time answering activist questions when we should be running the company. Bill Johnson was hugely accretive to the board. And um Oh, you know, he'd known Nelson forever. But he knew the consumer world, he knew PepsiCo, and so

58:32 You know, he actually Added a lot to the board. It was a win win. Is there a percentage in your head where if a shareholder has a certain percentage, then it's sort of probably right for them to have a board seat even if they might be disruptive? Oh, fifteen percent or so, ten, fifteen percent maybe, maybe. But one to two percent and you try to agitate for a bullseat, I think that's really wrong. You mentioned women CEOs. Correct me if I get this wrong. When you became CEO of PepsiCo, you were the first woman CEO in the S P five hundred.

59:04 No, no, no, no. A couple others. Califi Arena was uh so when I became CEO in two thousand six I think there were Eleven companies that had Berman CEOs. Okay. When I became president of PepsiCo, I think I was one of two or three. But I was the first woman of colour to run a Fortune fifty company.

59:24 Now that I think there's about fifty four women CEOs. of the fortune of the of the S P five hundred. Does it feel like we've made progress to you? You know, when you're at ten percent, it's not really progress. Uh because fifty percent of the uh MBA graduates are women. Okay, so somewhere the pipeline is leaky.

59:43 But You know, it's it's a it's a journey because you've got to make so many trade offs, but Why didn't you get to the top? But um It was novel at the time I became CEO.

59:54 the first immigrant person of colour from an emerging market. To lead a fortune fifty. Iconic American company. It might have made a lot of news, but deep down inside I'm like God I better prove myself. Okay, I lived off of that fear of making sure that I did my job right and didn't let any of these

1:00:11 Constituencies down. To the outside world it was big news. How do we? go about creating more of a equal opportunity

1:00:21 while maintaining a meritocracy. In companies that allow for more women. Like where do we get in the way of this happening? I think If you decide that you wanna have a meritocracy in the company, you should draw from the entire talent pool.

1:00:35 When you have more than fifty percent of the graduates are women, women are getting all the top grades. They're hungry. They want to move ahead. And then you don't hire from that pool. Because you're starting to saying, Oh, she's a woman must not be very good. You have these biases. That's a problem.

1:00:51 So you've constantly gotta check your biases at the door and say If I had to put on a blindfold and hire people, how do I make sure that I draw from the best to the brightest? That's what consulting does, okay? So you draw from the best and the brightest. And then while they're in the company moving ahead Make sure that

1:01:09 Barriers that exist to their success. Uh removed. Because Once you attack Somebody's

1:01:17 Confidence. It attacks their competence. Go deeper on that. So if s a woman is presenting and you roll your eyes at her. Or When she's presenting you cut her off. Or she says something and you cut her off. Or

1:01:31 You know, I've seen this often. Somebody will say, Oh yeah, this is so theoretical. When a woman presents when man says the soul the same thing they'll say, Oh God, that's so brilliant. So these things happen As a matter of practice in companies. Women, people of colour when they present. They do go through some bad behavior.

1:01:49 I'm talking of then. Things have changed a lot now, but in those days it did happen. Uh and so when those things happen, you've got to figure out a way to call those people out right there and say, Hey Can you let her finish? Can you let this person Articulate the point of view before you cut them off.

1:02:07 Will you stop rolling your eyes when she's presenting?'Cause you can feel The person rolling their eyes. So If you really value every talent for what it is, Meritocracy.

1:02:18 Bring them all in, allow them all to thrive. Then everybody has the confidence to continue to contribute. But if you have all these unconscious biases that impact People who are different. Then they lose their confidence.

1:02:32 And once you lose your confidence. You no longer feel comfortable so your competence is impact. 'Cause you're questioning yourself. Am I good enough?

1:02:41 Can I do this? So I think The whole Idea of uh meritocracy is thinking about all talent is equal.

1:02:51 As opposed to one talent is more s more important than the others. And then creating equality of opportunity, I would imagine. Making sure we don't slip back to old bad habits. And making sure we have the numbers. Usually we need one or two diverse people in the organization.

1:03:09 You can't really Practice. How to be inclusive. And then you have to constantly check yourself and say If

1:03:17 Sixty percent of the summer cum lauders. From that college. Well women. Where are my summer cumuladas? Why aren't they in this company? Mm okay.

1:03:27 So you've got to ask yourself those simple questions based on The statistics coming out of all the graduate uh graduating classes because If uh fifty five percent of the graduating class are women.

1:03:40 Fifty five percent of the summa cum lauders and magna cum lauders are women. And even in STEM disciplines if it's more than fifty percent. And if you only have twenty percent of the hires are women, why aren't they coming to you? So you've got to look at all these numbers and say Let me ask the question about what is it about my company?

1:03:59 Especially if you're a consumer company, you go, Boy, they should really want to come here. What are we doing wrong? So you've got to get introspective yourself. One of the anecdote that you pointed out in your book, and correct me if I'm getting this wrong because I I'm just going from memory here is

1:04:14 When you started listening in on the performance reviews with the men, it was they did all these things. And the But with the women it seemed like they did all these things but Yes. Was that like a bias within the organization or what was going on there?

1:04:28 So performance appraisals for men is like You know, he didn't deliver on all his goals. Yeah, I agree. But the guy's got really he's got great potential. With the women it's g it was she delivered on all her goals.

1:04:41 But I Think You know, her future trajectory is not that great. Go, why not?

1:04:49 Well, I don't know, something about her tells me that she won't be successful. Sometimes it was just ineffable. Not with all people, but some of the people that's how the d dialogue would go. You have to stop it at that time, I say. Let's let's not just leave this discussion. Let's really have a conversation. about this because maybe it's true, maybe it's not.

1:05:08 And sometimes It used to be issues related to her style, the way she dressed, or how she showed emotion, or how she gesticulated too much. Only because Again, I'm not criticising.

1:05:21 The Original idea of the executive. was a certain kind of male. Mm-hmm. And now these women show up in these C suites and it's a different gender, behavior, everything.

1:05:33 People have to get used to it. So you need more examples of people in C suite. And then you say, Okay, look Each person behaves differently, but they all bring a richness to the dialogue. Was that what happened when you quit PepsiCo? 'Cause you quit. You went to Roger and he said

1:05:49 I'm leaving, I'm gonna do this board meeting. And then I'm gone. I didn't quit, remember, I just threatened to quit. I said I'm Oh yeah, I just said uh after this meeting I'm leaving. Tomorrow. I didn't even say that. I said you know, look you've been

1:06:02 And you said nothing. So um I'm gonna make this presentation tomorrow to the board after that I quit. And he didn't say anything.

1:06:14 And then uh that day the meeting with all the presidents that was supposed to happen. Where I would always get beaten up. Didn't happen. called off that meeting and said he brought in the people who

1:06:26 were tough on me and I think he had a chat with them. And then the next day morning he walked into my office and said, Say, you know, next week we're going on this trip to look at these operations and these operations. Just make sure. He didn't even tell me I hope you've changed your mind. He just assumed. He just acted like Yeah. Nothing. And then believe me. I don't know what conversation he had with those people.

1:06:48 Everything was night and day after that. We never talked about it. Did you ever have to have a conversation like that with people? I would call out bad behavior immediately when I saw it. But in a gentle way, I'd say Hey.

1:07:01 Can you let her finish? Stop interrupting her or Him. What I would say Don't roll your eyes when you're talking under something's wrong with your eyes. Okay, so but I do it in a way that didn't make them feel bad. But it was

1:07:17 Direct and pointed. You only have to do that a couple of times now that I've got to be. The message goes quickly down the company. You had a conversation once with Steve Jobs where he told you not to be too nice. How did that Can the conversation influence how you ran PepsiCo?

1:07:32 I think he taught me a valuable first of all, he gave me time, which was just so generous of him. I think the biggest lesson I took away was he said If you care about something and you should care about a few things. Show your passion. Okay. For example, uh the guy who ran TBWHID Day, the Ad Agency.

1:07:52 which was doing work for Apple would always say When you go to see Steve Jobs the campaign, if he didn't like it, he'd throw the stuff all over the room and say, I wanna see a new campaign by the morning and it would scream Utter profanities, do whatever. But he wasn't doing it to destroy the place. He was doing it because he cared so much about Apple.

1:08:13 But he wanted the Absolute. Brilliant. right campaign for Apple. And his way of showing

1:08:20 His frustration at himself and at the group. was to Act the way he did. Okay. No.

1:08:27 As a woman I not the kind that utters full at words and throws things around, but All that Steve Job was telling me was, people have got to know what you're really passionate about. When you're really passionate about something. Don't sit here going, God, I don't want to send them back three times. It's okay to send them back three times.

1:08:44 get it to a point where you're really comfortable this is gonna be good for the company. Show your passion, push people back. So I got to a point when design as a discipline was set up in PepsiCo. Um When they'd bring me something I didn't like, I'd say hate it. absolutely hate it. And then I would tell a joke about it and say This is what the customer's gonna say when they

1:09:05 Or I'd say something like that. This new product is delayed. I don't care in six months we have to launch it, even though Normally takes three years to do it. And guess what? I'm the program manager. So we're gonna meet every Friday morning to talk about this program. People go, You're the program manager? I said, Yeah, I'm the program manager.

1:09:22 And people go, This is a disaster because to have a CEO review every week means we have to have two other reviews before we come to see you, I said, No, I'm the program manager, I'm not the CE, I'm the program manager. And I was And I told them no need for pre discussions before you come to me. I'm the program manager. And so

1:09:41 People sort of um realized that I was passionate about launching this product. And so They went along with the programme and they were grateful. I removed every barrier told them that, okay, this is what's holding you back. Let me make a few c phone calls and see if I can't get this out of this company faster.

1:09:58 So I would I jump through hoops for them. There's a lot of value in being passionate about something and just that energy sort of like transferring over to everybody else. There's also a huge benefit to just having clarity. It's not like it's okay, you know, maybe try changing colors. It's like no, I don't like it. It's garbage. Like come back with something new. But there's one big lesson. when you're in such positions of leadership and you have passion about something, don't try to take the credit. If the team does a great job at the end of it, even though you were the program manager and you drove it, Give the credit to the team.

1:10:32 Because you couldn't have done it yourself. The team did it. It's just that you exercise the power of your office. To help them get there. So the credit should go to them. Make sure you give them the credit.

1:10:43 Well, if something had go goes wrong. Take the blame. When In a blame. Flows upwards, credit should flow downwards. Steve uh jobs inspired the design thinking at Pepsi. How did that change how PepsiCo went about their business? Like

1:10:58 I remember you gave binders to sort of people and stuff, but like how did it tangibly work its way into products and and what was the impact of that? Well, all of a sudden people are saying, God, we can do so much with design, we can change our innovation process, we can change our package, our product design. We started to move from what's the color of the package on the shelf to how is this product gonna be consumed, how is it gonna be used? How is it gonna be carried? How's it gonna be stored on the shelf? How's it gonna be stored in the pantry at home? We were thinking about the chain, the use chain all the way to How does the consumer shop for it, put it in the pantry at home and then take it out and eat it and carry it in the purse. We were thinking about every touch point.

1:11:39 Of the product. Until it's not. Gone to the mountain. Was consumed. So it expanded

1:11:45 The entire chain of Which goes into the thinking. And previously you were sort of focused on like what's gonna make it stand out on the shelf, how are people gonna buy it. Right. And then we're not worried about it once they put it in the cart. I think you know, if there were ten steps, we worried about three steps in the past. Well thirty percent. Now we started to worry about eighty, ninety percent. So it was a different expedient.

1:12:07 It was fulfilling. People loved it. Are there any other lessons that you've taken from other CEOs? I mean, you you had a conversation with jobs, you work with Jeff Bezos on the board of Amazon. Where you're like, Oh, that's a really good idea, or really clever. I wish I would have known that before, or ones that you did implement while you were CEO of PepsiCo. You know, one of the things you should do as a CEO, talk to other CEOs.

1:12:30 If you see something interesting they're doing You're such a rare club, the CEO Club. call them up and say, Hey, you've done this, it's so interesting. Can you share some? Findings with me. Can you share some?

1:12:42 Or I'll give you one example. We used to do business with club stores like Costco and People like that. very different businesses than a regular retail store.

1:12:53 Item merchandisers, cost only merchandise, so many SKUs, limited number of SKUs. They're all in a different packaging. than most. Other retailers. You know, I said they're going

1:13:05 I don't understand Costco enough. Yeah, I my salesman told me about Costco, but I didn't understand Costco now. So I called Jim Sinegal. who was at that time the founder and still running. Cosco. I want to do better at Costco.

1:13:20 I'm seeing you. And he said to me if you wanted a better at Costco Walk the store with me. Come to store opening, spend the whole day. Because he goes to every store opening. Walk the store with me.

1:13:32 Amazing human being, Jim Sinegal. Just I mean heart of gold. That he gave me a day. Walk the store with me. Taught me how Club stores.

1:13:42 Operate. Taught me the basics of the business. This is CEO to CEO. He taught me the basics of the business. And in that store everybody watches him, Jim Sinegal and me, being Great friends, but

1:13:55 I'm the student, he's the teacher. And he taught me the business. Oh my gosh, walk me through this. Like what did he point out? What did he notice? What did he draw your attention to? Package sizes. How they think about packaging sizes, how they think about treasure hunt. Because in Costco there's always something new. How do they think about the treasure hand alley? How they think about pricing architecture?

1:14:17 You know, it's like Costco would have a unique packaging configuration. Which was not really comparable to anything out there in the marketplace and why that was important for Costco. You know, what is their Thinking about

1:14:30 how to manage the budget of a family, especially a family with two or three kids. How do you think about that budget? So Uh he for example he's We stood at the refrigerated shelf. I remember in Port Chester the store. You know, again he said, Okay, Andra.

1:14:44 You get to pick a product that I should put Into the store. Do you have an idea? I said, Yeah, I gave him an idea. I'm not gonna tell you what it was. I gave him an idea. I thought you know six months it'll show up on the shelf.

1:14:57 Two weeks later I go to the Costco store, it's there. How he got it done in two weeks I don't know, but it was a huge seller, so I felt relieved. But Based on the draw of that Mm.

1:15:10 Uh consumer in that neighborhood. I thought this product would do very well. But he listened. You see that? You see how you feel about the fact that the CEO wasn't just teaching, he's also learning from you. And so I had experiences like that. I remember there was a Walmart senior executive.

1:15:27 Greg Foran, who's running North America Walmart. And uh he was in uh Kiwi. And he was turning around Walmart, North America. Uh people thought it was very difficult. And uh I went to meet him.

1:15:41 And Doug McMillan, the CEO told Greg Foreign, Hey, Indra is a good friend of mine. And um Great for answered well. If you really want to learn Walmart. Follow me on a store tour.

1:15:54 And you know, these guys go to a store every day. Some region. So Greg would say I'm going to be in Pittsburgh. from eight AM to six PM on the twenty third of March. So I'd fly to Pittsburgh and meet him there. And my job was just to trail

1:16:09 great for and to see How he looked at every aisle. How he looked at how Clothing should be merchandised. What product was manied with what?

1:16:18 Uh, where did he stop and say, redo this entire display for the consumer? So I was learning from Grapefore, but he allowed me to tell him. Okay. And so I felt it was a gift he gave me. And at lunchtime he would only take a half an hour break. He said, Tell me what you learned. Let me tell you what I think you should have taken away.

1:16:40 Can bring down New Zealand. I was in New Zealand a year ago with him. We're reflecting on our market experiences. He taught me more than I would have learned from anybody. But this is the

1:16:52 Advantage of being Open to ideas, open to learning. And you can learn a lot from CEOs and become a better person yourself, because at the end of the day a company does not exist in a vacuum. That's one of the reasons we interview so many CEOs and share your lessons with our audience. Is there anything that stands out about what you learned that day walking through Walmart or the lunch after Where you were sort of, Oh, I never thought of it that way. You know how they merchandise T shirts as Doctor Light.

1:17:20 You know, when you hang let's say you You're hanging a certain uh a T shirt. But you've got to make sure the colours go from dark to light. If you mix up all the colours, consumers have a difficulty shopping for a t shirt.

1:17:33 He'll go and stand there and then he'll look at his team and say, What have we done wrong? And yeah, sometimes the guy will have the right answer, sometimes they won't. You gotta merchandise it. Dark to night. Or

1:17:46 He's style in front of a free to lay. I and you say to the guys. What do you think about this aisle? All right.

1:17:53 And they'll say it's perfect. He'll say, yeah. Why isn't every eye like the free to learn? Because perhaps it goes merchandise us perfectly. Well, the best example I remember we stood in front of a Quaker old side.

1:18:07 he'll pull out four packages of multi packs, you know, all the different flavours of He'll put all four packs in look at me, Andrew, come here. I say, Yes, Greg. I said awesome lineup because in my products, right? I own Quaker Outs. You say Each of these boxes

1:18:23 The three different sizes. But each of these boxes has got Nine packs, twelve packs. Six packs, whatever. But the pricing doesn't reflect the changes.

1:18:34 You know? Oh why is that? And why do I need four different packs? Why don't I just have two? Mm-hmm. And I'm going but I don't have the reason. Uh but You know, he he's thinking about

1:18:46 How can I get it? the maximum Inventory on these shelves. That makes sense for the consumer. But have price transparency so the consumer is served well.

1:18:58 And basically what he was pointing out to me is my pricing architecture was messed up. And it was causing confusion, I would imagine. And even if the consumer didn't express their confusion, they were probably confused because we were confused at that time looking at the four packages. But he would look at it at that granular level. That's incredible. And you know you learn so much and say, guys, hang on. When you go back and you look at pricing architecture, you ask people these questions, how many skews did you put on off Quaker Oaks? Why do we need ten skills, why not four?

1:19:27 It'll simplify the manufacturing operations. I think Frito does their own stocking of shelves, do they know it? Is there a reason behind that? Because the velocity is so high and it's all, you know, air in the bags, right? So if you put it through the warehouse, it'll take up too much space in the warehouse. So we bring it into the our trucks and our salesmen know how to put the right skills in the right place on the shelf. If Fridole products and beverage products came through the warehouse, they would have to build separate buildings just to house those products. Right. A freedom leadship will turn forty, fifty times a year.

1:20:02 Beverages might turn sixty to seventy times a year. Toothpaste turns twelve times a year. cookies done ten times a year. So you know, those people those can come to the warehouse. But chips, milk. uh beverages very hard to bring it through the warehouse.

1:20:18 When you look at an aisle of Fritelay or PepsiCroc, what what draws your attention? What do you notice? Well, I look for new products today. Have they been slaughtered? Are the existing workhorses like a layers or Doritos got enough facings? So the consumer knows that they should grab it. Because that's the media you own, right? When your consumer sees the product on a shelf. That's a media talking to you. So to me the media you own is very important.

1:20:48 to the consumer. Because the media you rent is your T V and your advertising. Many people don't see it. But they see that billboard effect on the aisle. So how does your package show up on the shelves? Is the right assortment there. Can they shop it easily? For example, is there a corporate block called Friedolane? Or do you have potato chips, corn chips? How would you prefer

1:21:08 having it. Are the dips next to the chips? If something is on deal, is it on an end dial? There's so many things we look at. The Fritale guys do a great job. That's awesome. One of the big strategic pivots, I guess, that happened under you is when you were president You sort of outsourced the bottlers and then when you were CEO you brought them back in. Do I have that right? Well, you know, when Roger was uh CEO we spun out the bottlers in North America. I execute it on his direction.

1:21:36 And th at that point it was the right thing to do. When I became CEO I realized that When the market was growing, the bottlers were thriving. When the market growth rate slowed down. Okay.

1:21:47 Oh The pie wasn't growing, but there were two companies, the concentrate company and the bottling company fighting for a larger share of that pie. It was not constructive. We were not serving the customer, but now fighting amongst ourselves. I made that hard decision.

1:22:02 to buy back the bottlers. Now it gets back to strategy. Sometimes people say all your flip flops, no? The environment changed. Remember I talked to you about You change strategy, the environment changes. You cannot be dogmatic about your strategic direction.

1:22:17 When the environment changes round you, you've got to zag a little bit, which is what I did, bought back the bottlers. Had we not bought the bottlers back at that time in North America, we'd still be fighting with the bottlers and the pie would be shrinking. 'Cause you're not serving the consumer, we're fighting each other. So it was tough my big bought and back. But one of the ways that people deal with reality is to be Humble. You know, that was the best path at the time, but That sounds so easy, but this is a multi billion dollar decision. The business was a multi multi billion dollar business, so

1:22:48 Again. You know people are gonna criticize you for flip flopping. People are gonna say you took on a more acid intensive business. But was it right for the company? Gotta put the company before you. They might criticize you. But is it right for the company?

1:23:04 The answers, yes. What have you learned about decision making that you wish more people knew? I think many people do it well. Um Decisions are rarely made in a vacuum.

1:23:14 Decisions are made because You've root dreams of data, you're married with experience. A little bit of intuition. A lot of counselling with other people, lot of discussions, a lot of input from other people too. Don't underestimate.

1:23:29 Uh, you know, how much knowledge is resident in your teams. And how you can tap into it. And so I think If you're willing to incorporate all those points of view into decision making you're gonna end up with a great decision. But you've always got to r keep one thing in mind.

1:23:44 If something goes wrong with the decision you made. The blame is yours. If it goes well. Give it to thee. Team that worked on it.

1:23:53 Provide air cover. But don't try to take the credit yourself,'cause the more you take the credit yourself, people go She just wants to look good. Okay. Just say, guys, I've got your back.

1:24:05 We've done all the thinking, discussion, we've looked at this from every perspective. Go make it happen. If something goes wrong, I got your back. You know, people feel empowered. You were involved in a lot of acquisitions. uh of companies through strategy and through

1:24:21 Um being the CEO of PepsiCo. Why do so many acquisitions not work out the way that they're intended? First of all, the acquisition Logic should be correct. Okay, don't do deals just because

1:24:35 It's exceed to do a deal. Or you're trying to buy some short term. growth or profitability. If you do it for the wrong reason, they will not work out. Second. Any acquisition

1:24:45 The deal process is just ten percent of the whole process. The whole workers in the post merger integration. How do you integrate the acquired company into your company? How do you extract the synergies? How do you build a new culture? How do you Absorb them.

1:25:00 People don't pay enough attention to that. I mean post merger integration efforts are not done right. acquisitions do fail. You've got to keep that in mind. And uh sometimes acquisitions don't work'cause the people

1:25:13 that you put in charge of running the new company. are not competent. I think one of the lessons I learned is respect the culture of the company of a choir. I'll give you two examples. When we bought Tropicana, the days when there were oranges available in Florida. Um Roger said something very interesting to me. He said Um

1:25:32 It's a different company. It's a good for you product. Don't allow People from the rest of Pepsi go to go there. And Put their ideas on.

1:25:42 Good for you. business because you'll mess up that business. Mm. So you made me go sit down with Ellen Marham, who was running that business, to say what are the rules Under which tropic and I should operate.

1:25:53 Almost a value system. And he said, preserve that until this company is mature enough to be called part of PepsiCo. Very important lesson. The second was when we were buying Quaker oats. Um it was

1:26:06 Bob Morrison was very important to Quaker oats. Which included Gatorade, right? Quaker oads, yeah. He said when we're buying Quaker Oads Whatever happens, we're gonna do everything possible to keep Bob Marison. At least for the first two years. So The onboarding into PepsiCo is done with the way that

1:26:23 You know we respect their culture and they respect us. made a whole lot of difference. So I think acquisitions fail when you don't recognize these pitfalls and don't address them. Proactively. Are there any big mistakes that you made in an acquisition where you're like, uh Lesson learned for next time, but

1:26:42 I'm not going to tell you those mistakes, but yeah, of course. I mean We correct them, but yeah, we made mistakes. And um If the mistakes were made is because I wish we

1:26:53 played out how that market could have evolved. even more or I didn't bring the bottlers in soon enough to talk about How are they going to carry it on the bottling system? Uh or

1:27:05 I put it into Fritolee even though it was a good for you product? And somehow it became a fun for you product when I wasn't looking. So yeah, we made mistakes. The key thing is Where it makes a huge difference and big bucks are are involved. Be careful. Be ultra careful about.

1:27:22 postmer integration in people because the cost of failure is very high. I'm gonna ask a question. I wanna hear your sort of rapid fire response of other behaviors or traits. If somebody had an unfair advantage in PepsiCo and they were just constantly like knocking it out of the park all the time, what would be the behaviors and traits that that person would have or the skills? They've got this uncanny ability to zoom in and zoom out. Mm-hmm. They

1:27:48 mm draw they ask people for opinions and ideas and incorporate them. Um They um put their hands up for difficult assignments and learn from difficult assignments. They've gone through failure in the past.

1:28:03 People who hit it out of the park have been through a lot of failure. and learn from that failure. They haven't allowed it to get them down. They've learned from those failures. They pick themselves up. Talk about what they learned, fix it the next time and move forward.

1:28:16 Uh these are people typically humble. You know, people who hit it out of the park rarely beat their chest and say, I hit it out of the park, I hit it out of the park. Look at me. I gotta move forward. These are people who say, Hey, this is what the company needed, I did it. And perhaps you go on a lot of them. Was that almost a reverse signal when people were um too braggie about what they've done or look at me, look what I've done? And then you're you just dismiss that because

1:28:42 You know, historically that doesn't correlate really to people who do the work. You know, Pepsi didn't have too many of these vagging people. So I was blessed too. run a company where the culture was such that Uh some people might have tried to be

1:28:57 A bit more out there to take credit, but there were very few people were braggers, really. Even Amazon has no braggers. Uh Phillips are the other company I said on the board of the MedTech company from the Netherlands. Not at all. Nobody brags. Everybody's talking about what can we do together to move the company forward. So I think I'm just lucky to be in these sorts of companies. Do you think that there's an important component to being part of a company? And w I mentioned this in the sense of maybe COVID or work from home where

1:29:26 it's really easy not to feel part of something larger than yourself, but there's this very human side of us that needs to feel part of something larger than ourselves, whether it's a family or work, that we're making a difference, that we're contributing to society. Does that get lost in work from home, do you think? I don't even know what it is to work from home only. To me, if you don't come to work. Interact with other people, understand the culture of the company.

1:29:53 Oh You know, see people in the corridor toss around ideas. pop your head into a meeting and say, Hey, I see you guys are working on this. Can I help? If you don't have that sort of human interaction, I don't even know what it is. To work in a corporation as opposed to doing a job from home.

1:30:10 doing an assignment from home if you want to call it that. So I grew up at a time when everybody came to work. And I loved it. So as we went through covet and post covid. I'm struggling.

1:30:23 To see how I would have run the company. without people coming to work. I'm struggling to see how I would have developed people Without seeing them. No. Let me come to the other side. I also see the benefit of

1:30:36 people who choose to work from home because they can now juggle more responsibilities. Working from home. So I understand that too. However, I'm also of the belief, Jane, that If you choose to work from a m male or female, I don't care.

1:30:49 If you choose to work from home. You might also want to accept that your promotional challenges maybe Your promotional opportunities may be limited. That was the most controversial tweet I've ever put out. I put this out I think in twenty twenty one or twenty twenty two, and I said if you work from home you're gonna end up reporting to somebody who works at the office. Unless you're in a company where only individual contributors move forward because they're all super techie.

1:31:14 But in companies where You really have to work in teams to move things forward. I don't see how you can do it all on Zoom. I want to thank you so much for your time today. This has been a fascinating interview. We always end with the same question, which is what is success for you? Performance with purpose. You know, when I ran, Pepsi ran it on that motto.

1:31:33 To me. Delivering performance in whatever field is one thing. But you've got to l make leave the place better than you found it. You've got to do it with a deep sense of I want to make the world a better place. I want to make the company a better company. I want to make the employees feel better about themselves.

1:31:52 Then when they Uh you know, came into PepsiCo or had a different leader. So at every point in time How do you have a deep sense of purpose to leave the place better than you found it? Those are the three words I used as a CEO Pepsico. Those are the three words that continue to Guide what I'm doing today.

1:32:10 This deep sense of purpose without taking your eye off. the core performance you have to deliver. Thank you very much. That's a beautiful way to wrap this up. Thank you, Shane. Thank you for having me on your show. It's a privilege talking with you.

1:32:24 Thanks for listening and learning with us. Be sure to sign up for my free weekly newsletter at fs.blog slash newsletter. The Farnum Street website is also where you can get more info on our membership program. which includes access to episode transcripts, my repository, ad-free episodes, and more. Follow myself and Farnum Street on X, Instagram, and LinkedIn to stay in the loop. Plus, you can watch full episodes on our YouTube channel. If you like what we're doing here, leaving a rating and review would mean the world. And if you really like us, sharing with a friend is the best way to grow this community. Until next time.

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