Indra Nooyi is an entirely different kind of CEO, a product of her native India as well as of PepsiCo’s family values approach to grooming CEOs. She is not hung up on pay. She’s not shy about asking for help when she needs it. She’s 52 years old and does not plan for this job to be her last. Her friend Henry Kissinger predicts that it’s only a matter of time before she is plucked for a big Washington post, possibly a cabinet job, and Nooyi acknowledges that at some point, she’d like that.

She’s cosmopolitan, rigorously educated, and a strategic thinker—her background is Boston Consulting Group—much more interested in the burgeoning markets in Russia and China than in the noisy U.S. cola wars.

Since becoming CEO, she has reorganized PepsiCo to make it less fixated on the U.S. and broadened the power structure by doubling her executive team to 29. . . . She has created a motto—“Performance With Purpose”—that puts a positive spin on how she wants PepsiCo to do business both at home and abroad.

It essentially boils down to balancing the profit motive with making healthier snacks, striving for a netzero impact on the environment, and taking care of your workforce. “If all you want is to screw this company down tight and get double-digit earnings growth and nothing else, then I’m the wrong person,” she says.

“Companies today are bigger than many economies. We are little republics. We are engines of efficiency. If companies don’t do [responsible] things, who is going to?

Why not start making change now?” . . .

Indra Krishnamurthy Nooyi has one of those incredible, impeccable track records. She grew up in Chennai

(formerly Madras), on the southeast coast of India, the daughter of an accountant and a stay-at-home mother who “encouraged us but held us back, told us we could rule the country as long as we kept the home fires burning,”

she says. Her grandfather, a retired judge, scrutinized report cards, presided over homework, and in his later years prepared her in advance for all the theorems in her geometry book to be sure she’d be able to excel if he were to die before the school year ended. Every night at dinner her mother would present a world problem to Nooyi and her sister and have them compete to solve it as if they were a President or Prime Minister. Though her family is Hindu, Nooyi attended a Catholic school, was an avid debater, played cricket, badgered her parents

(and the nuns) until she was allowed to play the guitar, and then formed an all-girl rock band—the first ever at the Holy Angels Convent. . . .

One of Nooyi’s most stunning talents is the art of suasion. She can rouse an audience and rally them around something as mind-numbing as a new companywide software installation. Her new motto, “Performance With Purpose,” is both a means of “herding the organization”

and of presenting PepsiCo globally. Because these days, she knows, you can’t take even an emerging market for granted. . . .

Nooyi sells her ideas with a famous intensity. Her colleagues say she “brings her whole self ” to the office.

She insists that everybody’s birthday is celebrated with a cake . . . and everyone is forever 35. Her karaoke machine is the ubiquitous party game at every PepsiCo gathering. She talks about being a mother. In December one executive recalls how Nooyi described to her whole team what it felt like to be a soccer mom whose week it was to bring the treats. You get a very specific list.

You can’t have nuts. You can’t have wheat. The situation confounds the CEO mom, she confesses, urging them to

“make it easy for me so I don’t have to think. We can do this. We already have the products.”

Just as she was held to very high standards in her youth, she expects everyone around her to measure up.

She has red, green, and purple pens and uses them liberally to mark up everything that crosses her desk. “My scribbles are legendary—legendary,” she says with a twinkle. Like “I have never seen such gross incompetence.”

Or “ ‘This is unacceptable,’ and I underline ‘unacceptable’

three times,” she says. She’s joking, but she gets her point across. One of her so-called love letters once scared some secretaries so badly that she had to go assure them that their bosses were not about to lose their jobs.

“She challenges you,” says Tim Minges, president of the Asia Pacific region. When his team couldn’t find an inexpensive alternative to palm oil for its products in Thailand last year, she kept pushing and pushing, saying,

“I hear you, I hear you, so what’s the right solution?”

until they came up with one: rice bran oil. “But don’t try to delegate up, because she will bounce it right back in your face,” he says. . . .

With her team, there’s nothing remote about Nooyi.

She is part schoolmarm, part mother hen. She once told Hugh Johnston, who worked for her in corporate strategy, that he was dressed like a bum. At the time he was helping roll out the company’s IT program, and he replied, “Indra, these are IT people; this is what we do.

We don’t go out of the building.” When he moved to headquarters, she told him where to shop, and he has acquired a whole new wardrobe. She knows she is demanding, and she worries about it. She throws dinners for members of her team and their spouses, including Q&A sessions in which she insists on getting questions from the spouses and won’t sit down until she does.

She appreciates the support from families, she says, because her career has been tough on her own family.

Questions for Discussion

 1. Use Table 16–2 to evaluate the extent to which Indra Nooyi displayed the characteristics associated with being a good leader and good manager.

Table 16-2

2. Which different positive and negative leadership traits and styles were displayed by Ms. Nooyi?
Cite examples.
3. To what extent does Indra display situational approaches toward leadership. Explain.
4. Which of the four types of transformational leadership behavior were displayed by Ms. Nooyi?
5. Would you like to work for Indra Nooyi? Explain why or why not.
6. What did you learn about leadership from this case?

Transcribed Image Text:

BEING A LEADER MEANS Motivating, influencing, and changing behavior. Inspiring, setting the tone, and articulating a vision. Executing plans, implementing, and delivering the goods and services. Managing resources. Managing people. Being charismatic. Being conscientious. Being visionary. Understanding and using power and influence. Acting decisively. Planning, organizing, directing, and controlling. Understanding and using authority and responsibility. Acting responsibly. Putting people first; the leader knows, responds to, Putting customers first; the manager knows, and acts for his or her followers. responds to, and acts for his or her customers. Managers can make mistakes when 1. They fail to grasp the importance of people as the key resource; or 2. They underlead; they treat people like other resources, numbers; or 3. They are eager to direct and to control but are unwilling to accept accountability. Leaders can make mistakes when 1. They choose the wrong goal, direction or inspira- tion, due to incompetence or bad intentions; or 2. They overlead; or 3. They are unable to deliver on, implement the vision due to incompetence or a lack of follow through commitment. BEING A MANAGER MEANS Practicing stewardship, directing and being held accountable for resources. SOURCE: Reprinted from P Lorenzi, "Managing for the Common Good: Prosocial Leadership," Organizational Dynamics, vol. 33, no. 3, p 286. 2004, with permission from Elsevier.