One CEO that seems to float under the radar when it comes to the immense impact she has had both on her organization as a whole, as well as her employees is Indra Nooyi. Although many people may not be too familiar with Indra, almost everyone has heard of PepsiCo, the company she is in charge of leading. What sets Indra apart from most other CEO’s of fortune 500 companies is the fact that she is only one of thirteen women and one in six Asians in control of a fortune 500 company. She has been noted by Forbes as number 5 in “Most Influential Women in the World” (2007), number 1 by Forbes in “50 Most Powerful Women,” and number 22 in Fortune’s “25 Most Powerful People in Business.” In the upcoming blog I will discuss how Indra has become so successful particularly looking at what sets her apart from other CEO’s of fortune 500 companies.
Indra Nooyi has always had a clear organization vision of where she wanted PepsiCo to be. This vision concentrated on two main ideas, improving the nutritional status of the products and making PepsiCo an environmentally sustainable company. Indra realizes the importance of an organization to stress corporate social responsibility and take blame for their actions. Nooyi realizes the severe obesity epidemic in the United States and attempts to help defeat it by offering alternative healthier products. In addition to her emphasis on corporate social responsibility, she also stresses the idea of the triple bottom line theory. Instead of just concentrating on the economic revenues gained from the company, Indra attempts to look at environmental issues regarding her products as well. Indra knows the importance of the different social and environmental aspects that go beyond just the conventional economic influences. While some have criticized Indra Nooyi for being too preoccupied on long-term benefits with disregard to short-term issues, she has still managed to help increase companies profits while using this triple line type approach.
The first way in which she helped improve the nutritional status of the company’s products was by acquiring Quaker Oats and juice maker Tropicana. By buying out some of the competitors she not only helped reduce competition of potential PepsiCo products, but also gained a valuable healthier product line. Indra also made sure to reduce all of PepsiCo’s high sugar, high calorie beverages with healthier alternatives. One major alternative line she offered was the “refresh everything” campaign which offered a product line consisting of all-natural ingredients. In addition to offering this healthy product line, she also re-emphasized the launch of the Propel fitness drink Propel to consumers. Even from the very start Indra was determined to help offer consumers healthier products, which was evident when she was one of the first in the industry to cut all Trans fats from PepsiCo’s products.
Nooyi’s success has also been a result of her environmentally friendly outlook. While some companies tend to overlook this aspect of business in order to save money, Indra knew the importance in the long run to concentrate on an environmentally friendly product line. One particular area that she concentrated on was reducing plastic used on the different products packaging. She also looked for more biodegradable packaging for products in efforts to reduce hazardous effects caused from products packaging on the environment.
The last area that I would like to discuss today about Indra Nooyi is the way she treats her employees. Nooyi has always been known for holding extremely high standards from her employees and expects nothing less than perfection. She stresses the importance of finding solutions to all possible questions and pushes her employees extremely hard. As we discussed in class, one motivational technique that is apparent Nooyi uses is the reinforcement theory. In particular, Nooyi has explained that she is not afraid to punish her employees or provide them with negative feedback when they screw up. Nooyi is not afraid to help use punishment as a motivational tool to help make employees do their job and do it right the first time.
Another thing that I found quite interesting from the article was the fact that after she beat out her competitor for the main CEO position she made sure to give him a pay raise as well as made sure he received a much larger role in decision making in the company. Although she offered him a pay raise, which could be considered a hygiene factor, she also made sure to still give him more influence in the company which probably spurred motivation and increased job satisfaction. The hygiene factor of an increase in pay still managed to help avoid making this employee dissatisfied, but it was the increase in work responsibility that most likely helped increase his overall job satisfaction and helped motivate him.
After discussing some of the key visions of Indra Nooyi it is not hard to see why she has been as successful as she has. Her leadership role as CEO of PepsiCo has helped spur profits as well as stressed new areas of corporate social responsibility. She not only understands the benefits of implementing a triple bottom line strategy, but also realizes the importance of concentrating on the long-term vision of the corporation.
Do you agree with the heavy importance Indra Nooyi is stressing regarding implementing environmentally friendly products and healthy alternatives to consumers?
Have you noticed any other recent changes in PepsiCo products that are reflected from an environmental/healthy influence?
Do you feel that Indra Nooyi should pay more attention to the possible short-term outcomes/problems of concentrating so much of the company’s time and money on environmentally friendly and healthy product lines?
http://www.minyanville.com/special-features/articles/influential-ceos-pepsi-indra-nooyi-indian/5/28/2010/id/28099
http://www.forbes.com/lists/2009/11/power-women-09_Indra-Nooyi_1S5D.html
Written by: Jason Dangles
I truly believe that Nooyi is focusing on the right things to improve her company. Providing environmental friendly products and healthier alternatives is a great way to attract consumers who are considered about their health and environment. In today’s world everyone seems to be going “green,” meaning having a strong concern in taking care of our environment by making it cleaner, less polluted, and saving money. As mentioned Nooyi does this by using different forms of packaging to protect the environment of hazardous products. These types of products would make moms happy and willing to buy because they would feel safe that there child would be protected from the danger of any sort of chemicals.
ReplyDeleteA fairly recent healthy alternative that Pepsi has made available is Pepsi One. Pepsi One is a soda that has great taste with only one calorie and low sodium. This can be a healthy alternative for those who love soda but need to watch their intake. They know can still have soda because of the lower calories and low sodium in the drink.
I believe that everyone in a leadership position needs to maintain some focus on the short-term goals. Nooyi seems to be doing very well in the way she is leading her company to be a major success in the business world, therefore I wouldn’t tell her to change anything. She seems to have established a good balance between short-term and long-term goals that works best for her. If I were to tell her one thing is just to be aware of what your competition is doing to try to surpass Pepsi Co.
Posted by: Mitchell Terry