After 12 years at the helm, Indra Nooyi — a role model for Indian leaders and women leaders — will step down as the global CEO of PepsiCo. Her leadership transformed Pepsi into an organisation for the times; one that has weathered well the storms of changing tastes and market pressures, and has been diligently prepared to confront the challenges of tomorrow. Indra was a leader admired for both her leadership style and the results they bore. Many leaders try to get by with one without the other, but she gracefully straddled both.
As Ian Cook, the presiding director of Pepsi’s board put it: “She has delivered strong and consistent financial performance, managing with an eye toward not only the short-run, but the long-run as well. As CEO, she grew revenue more than 80 per cent, outperforming our peers and adding a new billion-dollar brand almost every other year.”
Indra’s leadership style and habits can therefore offer many lessons for us, as they combined both the process and results of leadership. Let’s reflect on a few lessons we can learn from her.
Self-awareness and self-acceptance
One of the self-leadership qualities that Indra Nooyi displayed throughout her career was an honest self-awareness and a graceful self-acceptance. She would say, “I decided after a while I was never going to win the looks battle. I focused on the brains part. I focused on doing the job better than anyone else could do it. I started to depend more and more on my brains and my hard work as opposed to how I looked or how I talked.”
As students of business, aspiring managers and leaders, the importance of building this skill cannot be overstated. The reason this is so important, is that this self-awareness and self-acceptance give a leader a strong foundation of personal security. Very often, a leader’s mistakes and poor choices stem from insecurity. They are trying to fill perceived holes in themselves. But a leader who feels complete and has accepted who they are and do not feel the pressure to use every situation and every person to fill those holes. This becomes a quality that not only makes for effective leadership but also is a condition that must precede real leadership.
I remember a recent conversation with a business management student who asked me how to deal with requests for help from her classmates. She asked, “Why should I help my competitors?” Such thinking can create a very small view of both the path and the purpose of leadership. In class today, do I view every classmate or every interaction as a way of building my profile and fashioning a path for my success? Do I feel insecure when a classmate is praised or does well? In a class presentation do I seek to impress or seek to express? All these are expressions of trying to fill the holes. The more self-aware we are, the more we accept ourselves and seek to be authentic, the more our leadership can be focussed outwards, as it is meant to be.
Building relationships
Indra’s habit of building relationships with people beyond just transactions is seen so well in her words. “If you only want people to help you when you need them and not have an ongoing relationship with them, they don’t know you, they don’t know where you come from, and they are doubtful whether you really are interested in the issue; or are you just trying to skate over a current problem?”
This quality of awareness has another benefit. It leads to unfettered decision making. It focuses on what is right for the organisation rather than how to make the leader look good. When Indra was asked about her restructuring of the business that led to the selling off the restaurant chains like Pizza Hut, KFC and Taco Bell, she showed how she could transfer her gift of self-awareness to the organisation so that it could be more aware of its strengths and weaknesses. This prepared the organisation better for the brutally honest actions that were required.
Here’s what she said: “Two months after I joined the company, the restaurant business ran into trouble and we realised that we were imposing a packaged goods culture on a service industry. Once the strategic analysis was done objectively, rigorously and presented without emotion, it was easy to make the decision to unfetter the restaurants. The process was emotional because we had to separate people who grew up with PepsiCo and put them into a new company, but people accepted the decision intellectually and said, let’s get on with it.”
Listening to customers
Peter Drucker made an important distinction when defining what the objective of a business was. He said that it was not to ‘maximise profit’ but to ‘create a customer’. His insight helped management and leaders understand how they had to reorient their organisations from being pure profit players to being centred around the customer.
Indra Nooyi made that a habit. She listened to customers and was able to get a keen sense of the need of the times. She heard customers say they wanted healthier, better food, drinks and snacks. Her listening gave her the insights for decisive leadership action. She categorised Pepsi’s businesses into “fun for you” — the ‘junk’ stuff (potato chips and the standard fizz drinks) and a ladder of healthier alternatives through “better for you” (sugar free fizz drinks), and then “good for you” — focusing on giving customers healthy options for drinks and snacks. Her insights helped navigate PepsiCo away from a decline in its fortunes when people shied away from its ‘unhealthy’ food, to an organisation that is still growing and that will hopefully thrive. The new categories now account for more than 50 per cent of Pepsi’s offerings, up from about 38 per cent 10 years ago.
This listening habit also leads to being able to lead by example. When we listen to what people really think and feel, we are able to appreciate limits and constraints, we are able to validate actions by our own example before blindly foisting orders on others. Indra could therefore say with conviction. “I wouldn’t ask anyone to do anything I wouldn’t do myself.”
Performance with purpose
Recently, I had a great conversation with a young man who had just finished a course in Public Policy and Administration and was grappling between choices of the typical corporate job that would bring him the visible signs of success and the more purpose and meaning driven choices where the money might not be as good but where he felt impact and fulfilment would be higher. I congratulated him on the fact that he was even posing this choice to himself and that it was a dilemma.
Many students are increasingly asking these questions of themselves, which is very good news. Indra strove for this ideal at Pepsi. She sought to bring meaning and purpose to her contribution and her leadership impact. As she put it once: “It doesn't mean subtracting from the bottom line, [rather] that we bring together what is good for business with what is good for the world”. The Performance with Purpose approach that she institutionalised at Pepsi is her leadership legacy. It taught the company to see possibilities where none existed, to learn to get and also give.
If we can learn from her these qualities and practice them in our leadership, we will find that we can create teams and organisations that don’t just make cars, or steel, or bottled water but also make a difference. And that is the real test of leadership.