Conversation with PepsiCo CEO Indra Nooyi and David Bradley

good afternoon I hate to begin with by creating envy and I'm not certain of this but I've been backstage I think we just saw Governor Jerry Brown I can't tell you how exciting that was for us what have you guys been doing anything going on out here so let me do this introduction again Aspen I would like you to meet ingenue II who is the chairman and CEO of Pepsi and PepsiCo and Indra I would like you to meet Aspen what you have here is a representative sample of any small mountain town in Colorado we do it you know you sure this is not a plot against CEOs you start with drew faust the amazing drew Faust you go on to the spectacular Secretary Clinton and then you have Al Gore and Tony Blair following an Aurora Mercy games do one more time ha ha there's a tough act to be R so privileged to have you here let me give you all of indras life I'm going to give you all Avengers life in one minute since we have reasonably little amount of time I'm going to start by introducing her husband Raj noe who's here in the front row and then let me tell you this story so Indra was born to a conservative Brahmin family in southern India she excelled at high school and she overwhelmed college she got a BA in math chemistry and physics at a Madras Christian college and then she stepped out of the normal course of things for a young Indian girl she came to the United States went to Yale School of Management took a job with the Boston Consulting Group almost as if my transition to a large global corporation life and 20 years ago she joined Pepsi in the strategic planning area and eight years ago she became chairman and CEO of the company she is driven famously she gets four hours of sleep a night she had a reputation earlier in her life of being a young hippy she was in a girl's rock band and then she has been spotted walking in bare feet in the Pepsi offices and she says that she has music in the back of her head going on in hums and stressful moments she's also on every list of the most powerful women in the world so Indra originally I was scheduled to interview General David Patraeus you wouldn't want to talk about Predator drones would you I think it's a great topic actually we are looking at drones to deliver Pepsi and frito-lay products to homes because I believe there's Predator drones are not so good peace drones are good so if you really want your Pepsi in sort of instantly just call up for it on on online and we'll send it to you by drones can I tell you how unhappy the Pakistanis are with this opening comment that's actually they prefer perfect bombs so Indra you run a company with 300,000 employees almost 70 billion dollars in revenues you come one day as president of the company just appointed and your mom's not that impressed will you tell that story you know this was about 14 years ago and I was working in the office I work very late and we were in the middle of the Quaker Oats integration of the acquisition and I got a call at about 9:30 in the night from the existing chairman and CEO at that time and said to me that in row we're going to announce you as president and put you on the board of directors of PepsiCo I mean I was overwhelmed because you know look at my background where I came from to be president of an iconic American company and to be on the board of directors I mean I thought was just something special had happened to me so rather than stay and work till midnight which I really would have done because I had so much work to do I decided to go home and share the good news with my family so got home at about 10:00 oh you know parked the car got into the garage and my mother was waiting at the top of the stairs and I said to mom I got great news for you and she said well then let the news wait can you go out and get some milk I said to mom look I looked in the garage looks like my husband is home what time did he get home she said 8 o'clock so why didn't you ask him to buy the movie because he's tired okay he's tired he's tired we have a couple of help at home why don't you ask them to get the milk she said because I forgot I said okay fine she said just go get the milk we need it for the morning so I like a dutiful daughter I went on got the milk and came back I never banged it on the counter and I said I had great news for you I've just been told that I'm gonna be President on the board of directors and all that you want me to do is to go out and get the milk what kind of a mom are you and she said to me let me explain something to you you might be president of PepsiCo you might be on the board of directors but when you enter this house you're the wife you're the daughter you're the daughter-in-law you're the mother you're all of that nobody else can take that place so leave that damn crown in the garage and don't bring it into the house now I have to tell you David I've never seen that I've never seen it between my husband and my kids they've hidden it so I haven't seen it ever now that you look back Indra could you see that your mother was ambitious for you was she ambitious for you and how did she convey either ambition or the possibility that the world was your oyster you know we grew up my sister and I have an older sister that's known to many people here and very smart you're older than I and myself and we have a much younger brother the two of us grew up in a very very strict conservative family my mother never went to college because her parents didn't have the money to send her to college and she was very smart so she lived her life vicariously through the daughters she would ask us to dream and be whatever we wanted at the same time she would say at 18 I'm going to find a guy and marry you off so it was this constant conflict at home she's going to find a guy and say you got to marry him the same time she says dream big every night at dinner we would sit down and we would eat first and then my mother would sit down to eat and she would ask the two girls to prepare a speech or if you were president of the country what would you do if you were prime minister of the country what would you do at the end of the dinner we had to give the speech and she would decide who she's going to vote for so here is a mom who's suggesting all these and putting us through the paces on these aspirational jobs at the same time she's threatening us to find some vague guy and marry him off to us at age 18 and so we always lived in that fear that that could happen but I think the men in our family my grandfather and my father basically put their foot down said I don't care if it's girls or boys they all have to have an equal shot at being whatever they want to be and we're not going to get them married off at 18 we're going to let them do what they want to do was there ever a moment when your mother stepped back and said comments about the crown apart I can't believe what you've done Indra what a wonderful run this has been sometimes sometimes and I say it for you hey goodbye may I say it for you yeah no I'm sure she deep down inside she's very proud but I think it's the South Indian Brahmin tradition to always pretend that you're not proud so she will always hide it and tell me things like don't forget your family don't forget your husband don't forget your kids don't forget me don't forget your mother-in-law that's all she says to me all the time but deep down inside I'm sure she's very proud let's some transition gently to Pepsi so you this wonderful perch to see how American tastes are trending what's new in what we like in beverages and food I think American tastes in particular changing in interesting ways some things we can understand some we can't clearly there's a health and wellness trend and at health and wellness focus in all consumers but what does health and wellness mean is what's a real confusing aspect today if you asked me five or seven years ago I'd have said people are focusing on zero calorie products lower calorie products and switching away from high calorie products what we're seeing in the last couple of years people are switching away from diet products because they don't like artificial sweeteners and I don't know why because there's nothing nothing has been written about them not being saved they just fine but people are not consuming products with artificial sweeteners they're going back to consuming real sugar products so that's a surprising shift another shift we're seeing is people are going to portion control smaller cans smaller servings and they're reading nutrition labels even now sitting in the back room they are waiting to come back here I watched somebody pick up an easy drink but before she opened the can she read the nutrition label so I find people doing that more and more people are looking for natural organic labeling and they're looking for GMO label no GMO labeling now some of it is just myth because a GMO nothing is wrong with it and I don't know why people worry about those sorts of issues but we're seeing people because of the media because of blogs afraid of the food system I think in the u.s. we are one of the safest food supply systems and the products that are produced and the marketplace are loading the calorie levels going to healthier ingredients but I think consumers are rethinking how they eat and drink the trend that surprises me the most and I'm sure many of you are consumers of this trainer our daughters are they don't even prepare meals at home by going to the grocery to shop for things they shop for recipes and they go to blue apron or something like that and if you want to make full a Provencal pick a dish this service provides for you a tray which has a piece of chicken as a pinch of salt a pinch of every spice you wanted and all that you have to do is dump it into a pan and the sequence that they told you to dump it into and all of a sudden you have a great dish so people are not going to the grocery store as often as they should they are shopping for meals online they're trying to shift away from the old set of products to a whole new set which nobody can understand why and they're shopping an interesting ways local fresh so I think you're seeing a profound change in American eating and drinking habits we touch on to culture wars so quick primer for everyone here to culture wars that touch on Pepsi so the first one you would understand readily which is that there's a company that makes among other products sugared beverages and snack foods and then there's a concern about obesity and nutrition that battle was at least inside of Pepsi engaged and decided about 10 years ago indra was responsible for the purchase of Quaker Oats for Tropicana has set a goal for the company of doubling its nutrition foods from 15 billion dollars to 30 billion by 2020 whether you think the company is moving quickly enough on this spectrum or not it's definitely moving but what's interesting is as a second battlefront almost a rearguard effort right now a group of rump investors largely back in 2012 decided that indras focus on nutrition on sustainability on the future was a fuzzy sacrifice to short-term profits and so a real battle got engaged a couple of years ago indra i'm going to ask you what your response to it was but first could you explain as fairly as you can what were they saying well I tell you I think we all live in a world where people are much more focused on quarterly profits than they are on where is the company headed and is the quarterly profit a marker a mile marker if you want to call it that towards that long-term journey what's happening is that people are worried about the level of returns rather than the sustainability and the duration of the return so for example any CEO that comes into the job can say to themselves I want to run this company for my duration so let's say I had come to the job and said I want to be CEO for five years for five years in a big company like PepsiCo you can cut slash burn make enormous earnings and then let the next person pick up the debris of what you left for them you can easily do that or you can run the company for the duration of the company which is for decades to come because PepsiCo as a company has been around for deck decades and it should be around for a much longer time and the only way that you run a company for the duration of the company and not the CEO is to invest responsibly in transformation when the world demands a transformation so when I became CEO in 2006 and then chairman in 2007 I noticed three trends first the health and wellness trend was here and here to stay I realized then that carbonated soft drinks were going to start declining steadily and we had to retool the portfolio I realized that we had plants that making Pepsi and other beverages in many water distressed areas we generated a lot of plastic and that was not very good for the environment and we had to change our model to be more environmentally sustainable and I also realized that our people were our biggest assets and we had to change a lot of things about PepsiCo to attract and retain the best and the brightest so doing all of these things shifting the portfolio of a large company making us environmentally more sustainable when we were good at it but not great at it but we had to be great and changing so many things about the talent agenda was not something we could do overnight couple that with the fact that in 2008-2009 we had the enormous financial meltdown and the focus of the company shifted to the emerging and developing markets when we were a North American company so we said about making one of the biggest transformations in the history of the company but through it we performed some of these investors came out and said we'd like you to perform at an even higher level sure but if you performed it an even higher level you would have to sacrifice the transformation I made a decision with my board that I'd rather do what's right for PepsiCo over the duration of the company which is decades rather than doing something that did not have any courage behind it what was good for me as an individual I believed that responsible CEO should do what's right for the company I knew it would be unpopular I decided to do what's right with the support of the board and therefore we transform this company we increase the amount of nutritious offerings in the company we were the most water conscious companies today we have a phenomenal record on water environmentally we have an unbelievable record and we are one of the best places to work for employees every in every part of the world and through it all we've performed we've delivered top-tier earnings per share great shareholder return to all our shareholders so we feel good about where PepsiCo is today so Pepsi stock is up 50% in the last two years but go back before then give us one decision that actually took courage where you can remember saying maybe to Raj at home at night this one's really going to be tough well you know there were many decisions I think the biggest one was telling our people that we were going to lean in to help to nutritious products because remember what we were we were a company making covenants offerings and potato chips and corn chips fabulous products tasted great brought a smile on people's lips but society was changing and it behooves us to change our business model try telling people who grew up with that business model for twenty thirty years that we going to continue to do to sell those products but we were also going to dial up nutritious offerings but not only what we're going to sell our soft drinks and our you know snack products we're going to reduce the sugar in those soft drinks you're going to reduce the salt and our snack food products and this transformation meant we were going to reallocate resources a little differently it was not easy and every night that I came home I struggled with those decisions because we always had a group of people inside PepsiCo who questioned those decisions leaving on investors I remember going to Boston for an investor show and one particular investor I mean just took me to the cleaners said who are you mother Teresa we are American we eat chips and we drink soda it's not your business to transform the company to healthy offerings if we want to own a company that makes nutritious beverages and snacks we'll go buy a nutritious beverages and snacks company stock you don't have to do it I said what about PepsiCo and our future oh you just become a cash cow and die a natural death but that's not the way you should think about institutions we want to grow we want to stay around for a long time our goal is to have you buy our stock put it aside in your portfolio never have to worry about it because we're a bond with an equity like kicker that's our goal big Mega Cab Company you'll get that dividend check steadily that's what we like to do that requires transformation you introduce three words in 2010 to the PepsiCo vocabulary of performance with purpose do a paragraph on that go back to those three trends you know shifting the health and wellness trends the environmental trends and the fact that we had to create a different environment for our people I also realized something else it was going on as we surveyed our employees every one of them were looking for a purpose something in life that made them feel good about the company remember we don't make life-saving drugs we don't provide technology that changes your life we make fun products so we wanted to give people a real purpose why coming to work at PepsiCo was the greatest thing so what we did is we said why don't we make the shifting of the portfolio offering more nutritious products offering more grains offering more fruit and vegetable offerings really becoming an environmentally conscious company and creating an environment in PepsiCo where everybody can bring their whole self to work part of the agenda as to how we make money not how we spend the money how we make money and that could encapsulated in these three words performance with purpose it all starts with performance we want to deliver the greatest financial returns but we want to deliver those profits while we transform our product portfolio worried about the planet and worried about our people and that was simply performance with purpose and this fundamental difference between corporate social responsibility and performance and purposes that performance with purpose is about how we make the money not how we spend the money that we make so if we don't transform our portfolio we cannot make profits if you're not environmentally sustainable we won't get a licence to open a plant and we won't reduce the cost of our packaging and if we don't create a phenomenal workplace for our people we won't be able to hire the best and the brightest so we but our purpose became how we deliver the profits too often I think people confuse purpose with corporate social responsibility which is a problem because you could run the company anyway and then just do a charity program in some country and then feel good that's corporate social responsibility to me that's like going to confession after you've made a mistake I think what we are talking about is we've purpose into how you run the company into how you make money then it's a sustainable model and that's what performance and purpose is all about it's great answer let me shift from PepsiCo back to you again we have the now globally famous anne-marie slaughter here in the audience and two years ago she wrote for The New Yorker a perfectly edited perfectly written story on why women can't have it all wait did I sit for The New Yorker it was actually for the Atlantic it was a perfectly written perfectly edited story so give us your your thoughts you must have been intellectually part of the debate what's your thought about whether women can have it all I read the article I thought it was one of the most brilliantly written articles hear that one more time it was the most unbelievably written article and you know what kudos to the chairman of Atlantic who published it so David my I think that's a wrap thank you so much for having us today but I think Ann Marie is onto something I don't think women can have it all I just don't think so we pretend we have it all we pretend we can have it all you know my husband and I married for 34 years and we have two daughters and every day you have to make a decision on whether you are going to be a wife or a mother in fact many times during the day you have to make those decisions and you have to co-opt a lot of people to help you we co-opted our families to help us we plan our lives meticulously so we can be decent parents but if you ask our daughters I'm not sure they will say that I have been a good mom I'm not sure and I try all kinds of coping mechanisms I mean I'll tell you a story that happened when my daughter went to Catholic school convent of Sacred Heart and every Wednesday morning they have a class coffee with mothers class coffee with mothers for a working woman how is it going to work how am I going to take off nine o'clock on Wednesday mornings to go for a class coffee so I miss most class coffees my daughter would come home and she'd say list of all the mothers that were there and you were not there mom first few times I would die with guilt but I developed coping mechanisms I called the school and I said give me a list of mothers were not there so when she came home when she came home in the evening she'd say you were not there you were not there so now huh mrs. rag wasn't there you know mrs. so-and-so wasn't there so I'm not the only bad mother you know you have to cope because you die with guilt you just die with guilt my my observation David is that the biological clock and the career clock are in total conflict with each other total complete conflict when you have to have kids you have to build your career just as your rising to middle-management your kids need you because they're teenagers they need you for the teenagers and that's the time your husband becomes a teenager - so he start yeah they need you to-- so what do you do and as you grow even more your parents need you because they're aging so we'd be screwed I mean we have no we have no we cannot have it all but you know what coping mechanisms trained people at work trained your family to be your extended family you know when I when I'm in PepsiCo I travel a lot and when my kids were tiny especially my second one we had strict rules on playing Nintendo she'd call the office she didn't care whether I was in China Japan or India wherever she'd call the office the receptionist pick up the phone can I speak to my mommy everybody knows if somebody says can I speak to mommy it's my daughter so she say yes Tyra what can I do feel I want to play Nintendo and the receptionist has a set of questions have you finished your homework you know you see I say this because that's what it takes she goes to the questions and she says okay you can win intend a half an hour but she leaves me a message Tara called at 5:00 this is what the sequence of questions I went through I've given a permission so it's seamless parenting but if you don't do that I'm serious if you don't develop mechanisms with your secretaries with the extended office with everybody around you it cannot work it can work motherhood no stay-at-home mother mothering was a full-time job being a CEO of a company is three full-time jobs rolled into one how can you do justice to all you can't the person that hurts the most of this whole thing is your spouse there's no question about it you know Raj always says you know what your list is PepsiCo PepsiCo PepsiCo your two kids our two kids your mom and then the bottom of the list is me there are two ways to look at it you should be happy you're on the list don't complain this don't complain he is on the list very much on the list but you know sorry David just a reminiscent of my own life so I've received word that worse we're supposed to close let me tell you that whatever the guilt you feel inside the family or the lack of approval from your mom we received a text message right before we came out from Sheryl Sandberg who's that you've done a marvelous job of leaning in we're very happy to have had you here

Channel: The Aspen Institute

Views: 700,704

Rating: 4.8100319 out of 5

Keywords: Indra Nooyi (Organization Leader), David Bradley (Award Winner), PepsiCo (Award Winner), Pepsi (Award-Winning Work), Chief Executive Officer (Job Title), women, work, Aspen Institute (Nonprofit Organization), Aspen Ideas Festival, Can women have it all?, family, CEO, Chief Executive Officer, wife, mother, children

Id: KzLpryLUYsk

Length: 26min 14sec (1574 seconds)

Published: Tue Jul 01 2014