The world has become much more complex, and the only way companies can function effectively is if we put ourselves in the shoes of lawmakers and nongovernmental organizations (NGOs), and they put themselves in our shoes. Leadership Development, What were some of the actions that Pepsi took to manage a drop in demand? Leadership Development, Analysis of Several PepsiCo Brand Using a Boston Consulting Group Matrix Introduction The Boston Consulting Group matrix, also known as the BCG Matrix, divides brands and products into different categories based on their market performance. Related Expertise: If you do not treat them right, people today will say, “Goodbye, we’re going to the next job.” The only way you can hold onto these employees is by hooking them emotionally to the company, through our business model and what we stand for. How do we make sure that people who work for PepsiCo are able not just to make a living but also to have a life? How do you find the time when you’re running a company the size of PepsiCo? Sadly, this book is just tumbles down. I’d like that to be the way we do business. How can you stay true to the business you’re in while delivering choice in a completely different way—one that’s sensitive to the unique needs of a country? Are you spending more time with the external world now than you were before? You talked about public-private partnerships. They speak different languages, and their religious backgrounds are different. Not only do we have to learn the next leadership principle or the next management practice, but we also have to learn about technology and the younger generations. And it’s no longer about dealing with the traditional cast of characters—your employees, customers, suppliers, investors. How do you keep employees motivated in a slower-growth environment? Indra Nooyi is married to Raj Nooyi, a management consultant of Indian origin. They didn’t even say hello. Biographies are supposed to be motivational awakening zeal in readers. How do we make sure that we provide products that range from treats to health foods and allow customers to make balanced, sensible choices? My honest belief is that corporations are little republics in their own way. This summer, I spent two weeks in China. But I think it will take time for the rank and file to understand that international growth is a critical part of our future. Not only do we have to learn the next leadership principle or the next management practice, but we also have to learn about technology and the younger generations. We set the agenda very, very carefully. And as long as PepsiCo keeps doing well, people will be okay. Fourth, you must become much more open-minded. But you also need to be able to look at that person and say, “I value you as a person. That’s when I realized that I had not told the parents of the executives who do such an extraordinary job for PepsiCo that they themselves did a great job bringing up their children. This is more than a job—it’s a calling. We can develop hundreds of new products, and stores have enough space for them. Let’s take PepsiCo’s beverages. and values is more important than ever. Greenwich Historical Society honors former PepsiCo Chairman and CEO Indra Nooyi with History in the Making Award . So the question is, How do you still give the consumer in India a choice? Then, you start traveling. Indra Nooyi. Nooyi herself spent two weeks in China last summer, making sure to get out of conference rooms and into the countryside and people’s homes. Purpose has three elements. Beginning her career in India, Nooyi held product manager positions at Johnson & Johnson and textile firm Mettur Beardsell. In a conversation with Grant Freeland, senior partner and managing director of The Boston Consulting Group, Nooyi elaborates on her views about the changing nature of leadership. Third, we undertook brutal prioritization. If Nooyi says that she has not changed her leadership style during the recent economic turmoil, it is mostly because she has believed for several years that tomorrow’s leaders must have fundamentally different skills from those required of executives in the past. I went to consumers’ homes and visited with both younger and older people there, trying to understand how they live, what they think about products, and what we should be doing differently as a company. In a downturn, it’s even harder than usual to turn around a business because the rules are changing, the marketplace is changing, and the consumer value proposition is changing. And the reason we’ll do okay is because of A, B, C, and D. And the good news is that we’re a consumer staple company, so we won’t be affected as much.”. The notion of focusing only on short-term earnings is a thing of the past. You talked about public-private partnerships. The notion of focusing only on short-term earnings is a thing of the past. This is an old notion, but we must take it to a whole new level. You talk about performance with purpose. Performance with purpose is what I’d like PepsiCo to stand for. As she pointed out in a recent interview, “The most important part of per-formance with purpose is the use of the word with. Some of its notable alumni include Pepsi CEO Indra Nooyi, Israeli Prime Minister Benjamin Netanyahu, and … Fifteen years ago Indra Nooyi, then the head of strategy (now the boss) at PepsiCo, was a demanding client for consultants, having been one herself at BCG… In a downturn, it’s even harder than usual to turn around a business because the rules are changing, the marketplace is changing, and the consumer value proposition is changing. How can we introduce lots of new products there? PepsiCo’s emphasis on environmental sustainability, for example, is more relevant than ever today, because going green can actually save money and, along with other acts of citizenship, attract and retain the talent needed to succeed in difficult times. How do we make sure that, as a company, we replenish the planet and leave the world a better place than it was when we began playing around with it? So this is a whole new environment, and the role of the CEO has forever changed. So by being visible and not hiding myself in my office, I was telling people, “Hey, things are okay. It appears your browser does not support JavaScript or you have it disabled. Greenwich Time. But we cannot be guided purely by the earnings cycle, or we might end up adding costs to society. I am married, have two kids, and am trying to juggle being a CEO, a mom, a wife, a daughter, and a daughter-in-law. How can we introduce lots of new products there? Although developed markets may not grow as fast as they have in the past, developing and emerging markets will grow faster. BCG was the pioneer in business strategy when it was founded in 1963. Although developed markets may not grow as fast as they have in the past, developing and emerging markets will grow faster. Many companies take a global product and send it to Asia painted in a local color or given a local flavor. The matrix looks at two dimensions: growth rate of the industry and market share. As a Western company, we at PepsiCo have to make doubly sure that we don’t just export a model and say, “Give it some local colors or local flavors.” We actually have to tell our people, “Develop a model in your country that’s right for your country.”. And it’s no longer about dealing with the traditional cast of characters—your employees, customers, suppliers, investors. And it unleashed emotions that were unbelievable, creating an emotional bond among the executives, their parents, and me. You talk about performance with purpose. The findings of the position paper, prepared by Boston Consulting Group for the chamber, are part of interviews conducted with over 50 global thought leaders drawn from the industry, academia and policy makers. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo embarked on a corporate mission—“performance with purpose”—meant to marry financial success and social responsibility. Could you elaborate on those five characteristics? When all her guests came in, they ignored me. Half of humanity lives east of the Middle East. Fourth, once we gave the line managers their agendas, we let them loose and said, “Go make it happen.” And the only time I got intrusive is when a business needed to be turned around. I know that you have a life beyond PepsiCo, and I’m going to respect you for your entire life, not just treat you as Employee Number 4,567.”. Could you describe this idea? If we do not transform our portfolio, we cannot sustain performance. That’s the new reality. You talked about needing to be open to cultures and customs. So I picked my battles. It’s 24/7. Is that what happened in this situation? In the key markets and cities, you need to make sure you spend quality time. Why did you do that and what did you learn? This is more than a job—it’s a calling. To be able to manage these young kids who are coming to PepsiCo, we have to be able to think digitally and be able to manipulate all this new technology. Western models cannot simply be applied to those markets because they differ culturally. I am spending a lot of time with lawmakers, presidents, prime ministers, commerce ministers, health ministers, and NGOs. First, you surround yourself with great people, who run the businesses. During this downturn, people realized that it’s even more important to focus on portfolio transformations and to be green, because being green actually saves you costs. How do you make that a reality at PepsiCo? I am married, have two kids, and am trying to juggle being a CEO, a mom, a wife, a daughter, and a daughter-in-law. People Strategy. You talked about needing to be open to cultures and customs. The economy enabled us to hire great people and make investments with external companies at a much lower cost since there were fewer companies competing for those resources. Fifth, you must develop emotional intelligence. Let’s just focus a little bit more on the last 18 months. How can you stay true to the business you’re in while delivering choice in a completely different way—one that’s sensitive to the unique needs of a country? Being a CEO is not that much fun after all. She also stresses the need for leaders to have direct personal understanding of the markets and cultures in China, India, and other growth spots. The first is human sustainability. This is an old notion, but we must take it to a whole new level. 62K likes. Western models cannot simply be applied to those markets because they differ culturally. When I came back from India, I wrote to those parents and told them how much they contributed to the success of PepsiCo through the gift of their son or daughter. Indra Nooyi knows how hard life is for working moms. Early on, we realized that we were going to have a slowdown. We can’t do it. How do you make that a reality at PepsiCo? Nooyi is one of the top female executives in the United States and is consistently ranked among the World's 100 Most Powerful Women. Our market capitalization is almost $100 billion. We can’t have an adversarial relationship. If we do not become greener than we are today, young people are not going to come to work for us. According to Forbes, she is consistently ranked among World's 100 Most Powerful Women. The chairman and chief executive officer of PepsiCo explains how tomorrow’s leaders must develop a personal understanding of the markets and cultures in China, India, and other emerging markets. Michael D. White is a competent controller and a capable operator, and that is why he is one of the backbones of the company. The third element is talent. © Boston Consulting Group 2020. But the way people live east of the Middle East is vastly different from how they live in the rest of the world. We also must give people the opportunity to work in international markets if they’re so inclined and have the capability. Nooyi herself spent two weeks in China last summer, making sure to get out of conference rooms and into the countryside and people’s homes. Look at PepsiCo. You wrote the parents of your 29 senior executives. To be able to manage these young kids who are coming to PepsiCo, we have to be able to think digitally and be able to manipulate all this new technology. We can’t have an adversarial relationship. First, you have to focus on the long term. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo embarked on a corporate mission—“performance with purpose”—meant to marry financial success and social responsibility. You talk about thinking globally and acting locally. The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. They didn’t even say hello. All rights reserved. I visited a school of traditional Chinese medicine to understand how the Chinese practice prevention and cure and how our products might play a role. We set the agenda very, very carefully. I kept saying to our employees, “The economy’s bad, unemployment is going up, but we’ll do okay. Our businesses in those markets need to tailor products, business models, and people practices to the local market. The second element is environmental sustainability. Indra Nooyi ranks 11th - Forbes “Most influential women in the world”, the tone of this book so casual that it completely fails at many levels to capture her aura. The Great Recession has only strengthened Nooyi’s belief that performance and purpose mutually reinforce each other. First, we were very visible, doing as much walking around as possible. If we do not become greener than we are today, young people are not going to come to work for us. It appears your browser does not support JavaScript or you have it disabled. —Indra Nooyi (chairman and CEO, PepsiCo) “In the end, there are not that many value levers. So I picked my battles. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. She is the current Chairman and Chief Executive Officer of PepsiCo, the second largest food & beverage business in the world (by net revenue). You are dealing with governments, with NGOs, and with any interested party that decides to take on the company. How do we make sure that, as a company, we replenish the planet and leave the world a better place than it was when we began playing around with it? Indra K. Nooyi on Performance with Purpose. Nooyi credits her work at BCG, a notoriously rigorous job, as being an important stepping stone and a “formative experience” in her career. Boston Consulting Group est un employeur offrant l'égalité des chances. We increased R&D through the downturn. About three years ago, shortly after Indra K. Nooyi became chief executive officer, PepsiCo … Indra Nooyi has her unique charisma; her story between Michael D. White, chief executive officer of PepsiCo International and vice chairman of PepsiCo, is very popular in the company. If you look around the world, there’s still growth, but we have to view our portfolio differently. In periods of crisis, leaders can be tempted to take greater control and drive change from the top. How do you keep employees motivated in a slower-growth environment? Let’s just focus a little bit more on the last 18 months. How do we make sure that people who work for PepsiCo are able not just to make a living but also to have a life? Third, we undertook brutal prioritization. Now let’s consider India, which has tiny stores. You wrote the parents of your 29 senior executives. Indra Nooyi. We launched a restructuring program in October 2008, and we made some fairly deep cuts to create some breathing room, because we wanted to keep reinvesting in the business through the downturn. The economy enabled us to hire great people and make investments with external companies at a much lower cost since there were fewer companies competing for those resources. She is the current Chairman and Chief Executive Officer of PepsiCo, the second largest food & beverage business in the world (by net revenue). So this is a whole new environment, and the role of the CEO has forever changed. In fact, I’d say that it was reinforced by the downturn. An Interview with the Chairman and CEO of PepsiCo. Fourth, you must become much more open-minded. Was performance with purpose challenged during this last 18 months as the economy worsened? In a recent speech, you talked about five ways in which the role of the CEO will change. All rights reserved. When all her guests came in, they ignored me. At the beginning of the year, we started with five priorities and we kept hammering on those priorities every quarter, in every town-hall meeting, in every interaction we had with the employees, and in every piece of communication. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. Read More. We have to make sure people understand that growth patterns will shift. We’re bigger than many countries. Among the senior leadership, it is. I’ve been at PepsiCo for 15 years and became chairman and CEO about three years ago. CEOs have to become learning CEOs. We are likely entering a period of low growth. We also must give people the opportunity to work in international markets if they’re so inclined and have the capability. Could you briefly describe your personal background and your professional background? We have to make sure people understand that growth patterns will shift. In the year 2006, Nooyi was named the next CEO and White was her competitor. Governments have gotten more intrusive. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. In a recent speech, you talked about five ways in which the role of the CEO will change. People think there are many, but in reality, there are few. Aspiring CEOs have to understand that they are signing up for a lot more than CEOs did in the 1970s, 1980s, 1990s, and even four or five years ago. At the beginning of the year, we started with five priorities and we kept hammering on those priorities every quarter, in every town-hall meeting, in every interaction we had with the employees, and in every piece of communication. 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