Visionary Encounter Fireside Talk Series - Sudhir Sethi in conversation with Indra Nooyi

[Music] Indra so nice to meet you and so nice to have you on this fir side chat it's called the Visionary fireside chat and um for for many of you who actually know about Indra uh I'm going to tell a little bit more about Indra um a business leader a strategic professional is widely considered to be one of the top CEOs in the world uh for what she did during her PepsiCo stint uh as such and uh to many entrepreneurs Indra you're a role model in the country and through this medium we're going to reach out to them and message from you would be very important at the end of the discussion uh Indra is also a Padma bushan 2007 a CNN IBN Global Indian of the Year award 200 6 and the B award for business leadership 2019 as such so it's really a pleasure and honor for me to be here with you thank you for much for joining this pleasure you know it's interesting so I look at entrepreneurs I'm in all of them because they take an idea and they take all the risk they raised the funding they scale it up and some of them failed but many of them succeed many of them failed and many of them succeed too and they do things that are disruptive um and so I look at them and say God I could never be an Entre rur like them I'm more taking a big company and transforming it so I'm more in awe of those entrepreneurs and I don't know why they're in awe of me to be honest well I think there's it's very interesting because uh many entrepreneurs become large entrepreneurs or large scale companies and once the risk goes away uh you know product Market fit markets being addressed India globally Etc risk Capital coming in you know over the next 5 6 7even years of the life of Journey the the risk of that goes away then it actually becomes something similar to what you have done so let me start my first question with that because there's so much of learning for entrepreneurs who are scaling up massively I mentioned to you earlier in the discussion that two of our companies first cry and and lens card are scaling to become almost a billion dollar Revenue company in the next 12 to 18 months and that is something which is a large company on a global basis your experience in PepsiCo was literally turning around PepsiCo to a different thesis altoe which I believe at that point of time did not exist could you expand on that what did you do to change PepsiCo to where it is today so I want to set the record straight when I inherited PepsiCo in 2006 it was a company that was performing extraordinarily well extraordinary well always delivered on its commitments you know great earnings per share growth um and so PepsiCo was sort of a iconic consumer Products company that everybody was looking up to I actually say it's harder to take over a successful company and keep it successful as they say turning around the successful company is harder than turning around a troubled company so I'm sitting here with a successful company I can't sit there and say hey everything the previous guy did was wrong now I'm going to take a big charge and reset the company because I was part of the previous management so if I criticize anything I'm criticizing myself but I had to sit down and say should I continue operating the company like it was operated or do I have to zag when we've been zigging so the only way to decide the best way to move forward is to actually look ahead a decade and then work backwards because you know it takes time to transform companies it takes time to come up with a new agenda if if it's needed so I literally did a future back exercise looked at all the mega trends that were going to impact corporations and consumer companies food and beverage and PepsiCo you know sort of zoomed into PepsiCo and said and I'm sorry I'm going to interrupt you this future back exercise and I'm going to correlate to entrepreneurs who are growing their companies to a larger level what exactly did you do there so I commissioned multiple teams within PepsiCo people and marketing supply chain operations R&D uh you know strategy different people and I said go look at the mega Trends as you see it that are likely to impact PepsiCo Downstream so they all came up with their version of the mega Trends and then we coaled as a group into 10 mega trends that going to impact PepsiCo into the future so we had some perspective of what we needed to do to reposition this company for Success into the future and and this took how long about 6 months months six months of work okay and interestingly when we call us around the 10 megatrend there was a lot of commonality between what the teams had come come up with but there was were three trends that required more work and investment than the others okay one of them was a focus on health and wellness by consumers at a time when our portfolio was more fun for you oriented it was a focus on Extreme environmental s sustainability again required work on our part and the third one was an interesting one uh employees those days especially the Millennials wanted to go work for Tech or for the financial sector for Consulting we wanted them to come and work for us we wanted the best and brightest to come to us so we needed to change the environment in the company to be different than it was so that it was more inclusive more allow allowing of people to bring their whole self to work so we needed to transform the company's environment top to bottom the culture of the company the culture of the company our approach our benefits packages lot of things had to be changed um and so these three out of the 10 required more work than the others like a focus on security because at that time cyber security was becoming a big issue we knew we had to do that or another big issue was you should expect tremendous volatility in raw material prices sure but that's something we knew how to handle except we needed to fine-tune that skill so these three were the three initiatives that I knew I needed to put money Focus effort behind and the pivot of PepsiCo was on these three broadly the thing is what we had to do is keep delivering great performance because and pivot and pivot and pivot so this was sort of um a foot on the brake and a foot on the accelerator put it that way or as they say walk and Sho gum at the same time all of those cliches apply to us I must tell you entrepreneurs do that every day they that's why I said I'm in all of them yes but one question during that time which is not too far back uhhuh um the impact of technology on every business was shooting up and to that extent was there in Your Vision with the three elements which you talked about and perhaps others was there a vision of how to use technology for growing the business and impacting the business the good news U so there is a I think some of the technology Executives took a vacation in the first four or five years of my CEO ship okay because the iPhone had just come into the marketplace so it really wasn't a factor uh Zoom didn't even exist okay uh you know teams chime none of them existed so um you know we were doing business the good oldfashioned way I think technology burst into the workplace only uh 2012 13 till then it was progressing at a slow pace and none of the stuff on generative AI existed then existed that time and people were talking about Ai and machine learning but it wasn't huge the biggest technology aha for us was the emergence of e-commerce the early days of e-commerce and digital marketing yes was inv Ecommerce was really big in those subsequent years subsequent years so you should think of my tenure as CEO in two segments six years where things are progressing along at a very slow clip and from a technology perspective the next six years where it was beginning to pick up okay so you have to think of it in two areas so once we knew that we had to transform these three areas the real question was how do we tell our people we're going to keep delivering performance but we're going to do it while transforming the portfolio while working on environmental initiatives while changing the culture of the company right and that's what led to Performance with purpose the purpose part was human sustainability transforming the portfolio environmental sustainability replenishing the envirment and talent sustainability which was cherishing our people which was all new to the company we couldn't deliver performance without focusing on the three elements of purpose we couldn't fund purpose without delivering performance so it was a virtuous circle right and we had to keep conveying to people that this is not fixing a broken company this is creating a future proofed company and in a way it's more exciting to create a future proof company because people feel excited about the future and they're proud about where the company's going and that was the challenge we had and during that time was for instance the whole environment related issue as one example and moving into healthy wellness products um especially the environment side was that unique to PepsiCo or there were a lot of people moving into environment friendly practices somewhere somewh not so you were the leader you were P the leaders among the leaders I mean why did we do that early because I mean look every time your lived experiences reflect on your leadership I grew up in Chennai and in chenai in those days or Madras we didn't have water there would be months of the year where the City didn't have water for basic necessities and those who could afford to bring in tankers from far away places got that but the people who couldn't afford it would line up from the morning to just get two or three pots of water while that was going on in the city there are big companies on the outskirts of the city drawing water from the Aqua Force right and they would have high pressure pumps and would drag the water out of the Aqua Force to me I thought that was a problem beverage plants in the out outskirts of the city were using 2.4 L of water to make a liter of beverage and I thought that was not okay and chenai was just a microcosm if you looked around the world in any water distressed area and there were many many water distressed areas and getting increasingly more I thought we couldn't operate in those places and ask for a license to operate with this sort of a water footprint so this is very interesting how did you reduce the water consumption so so um you know when you have a lot of water and you don't really don't pay for it because you just take it out of before you don't think about water use but once you put on lens on it and say or a light on it and say I want to reduce the usage to 1.5 all the way to 1.2 over time all of a sudden people start to look and see where is the water wastage right okay um if you're selling bottles do we have to go through a three rinse procedure could you do you know UV based or some other based water cleaning how about if you took the waste water and send it through a recycl recycling system and clean it up to fish pond uh quality so it's not as if you're using contaminated water you're cleaning it to fish pond quality and then bringing it back into the system because those Technologies existed so it just required hiring the right people with a different mindset and saying you're going to get paid on reducing the water usage okay go and get it done because there were two issues if you reduce the water usage you going to do right by those communities and then you get a license to operate right if you don't you get shut down yes if you do it your cost go down because you don't have to pay for water then but if you don't do it you're in a different place so my point was simple don't just tell people because we're just good people we should do it link it back to the business benefits Financial the economics and all of a sudden people go we have to do it amazing now this would have required enormous culture change did you hire many people with the right mindset and how did you transform the existing people to the right mindset I'm sure there would have been enormous resistance to change I think for those people who grow up in you know water plentiful areas to them the notion of water distress is alien is alien or uh when you talk about plastics it's like what's wrong with plastics well we're running out of landfills what do you mean we're running out of land andells so all of these were alien Concepts so for all of those people there was a lot of Education that had to be done showing them you know Al Gore's film on the Inconvenient Truth had come out at that time so that helped me uh get that message to people uh but I would say overall in PepsiCo people were energized and enthused about being part of this journey in terms of what they knew and what they could do but when it came to new capabilities we had to hire new people you had to hire new people absolutely Ely I mean teams of research scientists teams of flavor scientists people who knew how to uh think about Plastics in a different way we had to hire all of those capabilities and for a while it was difficult integrating them the company but I think over time they earn their tribes people looked at them and said God we should have brought them in five years ago so that brings me to a very interesting question which entrepreneurs do face all the time pivot and change Innovation agility right right and especially pivot and change pivot and change can be very scary yeah if somebody has been in the system for a long time yeah but what you're seeing is Pivot and change can also be extremely invigorating and motivating for people to do different things and stay back and change uhhuh provided the leader goes out there like a missionary okay and tells the story again and again and again so the whole concept of communicating again and again is huge huge but you've got to communicate in a simple um simple way that touches people's heart don't just put a slide presentation and say let's just do it don't talk about globally we need to reduce water tell them let's talk about your backyard let's talk about a city in your country something they can relate to exactly and I think when you make something so personal link to their frame of reference and talk about the benefits that are going to acre Not Just To The World At Large but to their Community to their country to their City whatever it is all of sudden their heart gets involved very often we speak to people's head and hands we do not speak to the heart and anything that does not involve the heart is not longlasting you were hiring new people what were you looking for in those new people during that phase of pivot and the next phase of the life of the company first of all they had to have the core skill that I needed we were not going to hire somebody that I liked or I could feel a chemistry if I didn't feel there were subject matter experts so we had to find the subject matter experts but then find a way to bring them to the company that was a challenge because a lot of subject matter experts wanted to talk to us because they were intrigued by the company by me so they show up for the interview but then after a while they'll say why would I leave my job and come to PepsiCo the best one was I hired a chief scientific officer mmud Khan who was perhaps my best hired in PepsiCo mmud was an endocrinologist um grew up in England practice at Mayo Clinic and he was head of U science for Takira Pharmaceuticals so he had a multi-billion dollar budget he talked to me a few times in PepsiCo and then he said Indra how can I leave a multi multi-billion dollar budget and come to work at PepsiCo makes no sense and I loved meu his style the way he understood our industry and I wanted him in PepsiCo I needed him in PepsiCo so I told mm mm look in tea Pharmaceuticals you cannot taste all the Pharmaceuticals you make but in PepsiCo every product you Tinker with you can taste you can taste yeah and you will make change across the world on such a large footprint that you'll actually feel fulfilled by what you do and that was motivating he went back and thought about it and said the fact that I could influence so much of the world and address core diets and core habits was invigorating for me and the fact that I had a leader who who believed in it said that you know this is something I should embark on so me joined us key hiring leader must get involved absolutely oh all the key hires have to be involved and and what entrepreneurs face all the time is uh entrepreneurs are running new companies which have never existed before right um we have invested in 140 companies trust me none of those companies existed before in their category so it's a new business model new Revenue model new product new technology new goto markets and new people yeah right so the risk is and New Capital uhhuh now when you hire they hire from conventional industry yeah most hires are in age terms older than the entrepreneur the average age of the entrepreneur in India is 27 years old right now right and he's going out or she's going out in a year two years time to hire people from maybe PepsiCo Y and the demand is for higher salaries how do you how do you address that situation well the fact that they're hiring older seasoned people makes a lot of sense because you know you can think of a startup company in the 0 to 25 million or whatever the equivalent is in Indian rupees rupes um you know those are early days if you can cross that hurdle you've gotten somewhere yes but that becomes your first tall point and after that as you think of the next few stall points and as you're scaling up you have to build the frame for the company you've got to put in the systems the processes the quality exactly as any other company exactly and it doesn't matter if you grow just to 100 million or grow to 10 billion because once you grow to 100 million and you haven't put those in you're going to go back to 20 million yes so you have to put that lce in the only people who know how to do it are people who have done it in large companies so you have to bring them in now here's the problem people you're going to bring in if it's not retirees you're bringing in people who are making a lot of money in a less risky environment now you're bringing them to a risky environment and saying do it so it's got to be people are motivated not just by making more money but by disrupting an industry or meeting an unmet need a different cause complete the purpose has to be articulated and then you give them ownership in the company and say look together we both can change the world but it's hard to get them because many people in that level in companies are so established they're very good at what they do they're so established life becomes a little easier after you've slogged for a long time now you want me to go back and slog with very little resources and not a fancy office not sure I want to do it there is no fancy offices aren't that's right so we have to think about a different value proposition for them you know one of the things I've often thought about uh when Indian entrepreneurs come to see me should we create a cell of seasoned professionals who can be the Central knowledge repository to help all the entrepreneurs create these latter structures because I'm sure you have it already but having these seasoned people could go a long way so somebody was asking me what's the biggest value ad which a VC provides and I keep telling them it's networks so you bring like-minded people and just talk to the entrepreneur that one one hour discussion with a group of entrepreneurs John Chambers did that with us by way he met 22 SAS entrepreneurs in India for one day trust me it was amazing because let me take it a step further because I look at the food industry for any entrepreneur who wants to start a food beverage anything consumable there's a very strong food safety act yes which requires you to put in place certain disciplines every entrepreneur cannot afford to put it in so if I were a VC or a bunch of VCS investing in the space I would set up a central food safety uh laboratory and system that all entrepreneurs can go tap into exactly if you don't do that so if you talk about stas this is laboratory as a service yes last you want to call it let's make up a new name oh interesting okay you have to do that otherwise what's going to happen is these startup guys are going to be having claims and labels that are not going to sustain right uh you know any valuation when they get flipped to a strategic yeah and so we have to think about how to support these entrepreneurs and India doesn't have these kind of services right now that's what we need to do unless you do that these guys will have a tough time flipping yes the entity in fact we have a company called cure Foods the60 kitchens right now uh growing massively it a commissary of sorts it's it's a e-commerce company on Food supplying 100,000 packets a day right now and in my view India's uh investment opportunity what Nandan calls it and I've copied it population scale investment opportunity there are a billion people who need insurance there are a billion people who need uh excellent food there's a billion people who need lending 3 if you have not put in place safety system yeah I I think food is becoming a very big thing in India right now overall so this is interesting so there's so many learnings which entrepreneurs can have from the bigger World y uh and especially what you mentioned across Global geographies because what may have happened in terms of food safety as an example outside the country may be far Advanced how there's a cost to it there's a cost to it so the question is when to invest in that well you have to pass off things that are scale related to a central entity because you it's going to take a while for you to get to scale but you have to behave like you have the scale even when you're small and that's why I say any VC that's investing thematically should think about how to somehow accumulate that scale uh you know you can talk about the food safety modernization act in the US as being only Western world but the FSS in India is pretty Vigilant pretty Vigilant yeah and I think that it's very important if any product gets exported to the US you have to meet the fsma requirements here so build it earlier on I'll give you the best examples with there long time ago we bought a product called soie from an entrepreneur in the US and when we bought the product and our scientists started to look at the labels and what's in the product we discovered that we could not operate the way the entrepreneur operated it this was long time ago before mmud came on the scene when he came everything changed for example there was a product called soil lean which was a low calorie product and the label was Liquid lipos suction okay very very catchy name and people bought it because it said liquid liposuction now once PepsiCo bought it the lawyer said there's no way you can say liquid liposuction but there's nothing lipos section about it an entrepreneur can say all these cute things big companies can't cannot and this was being flipped to us when the revenue was still very small so what I say is any entrepreneur should think hard today big companies are more Savvy they know how to buy they're not buying fat products so make sure there's you know sort of alignment between the label and the ingredients and the claims because if you don't then you're not selling a real product you're selling a bit of a fake product right right switching back to today h um you have so many assignments which you're in and I'm intrigued uh uh about your being on the board of Amazon uh which is very different from what you were doing earlier in some sense at least the business models um that's number one and number two you're also on the board of IC that's Cricket which I believe is your passion so let's talk about the boring subject which is Amazon first and then cricket cricket Amazon is a fascinating subject yeah I view Amazon is perhaps one of the most consequential company of our times uh and I don't believe we could have survived coid without Amazon in the United States there is no way that seniors in particular would have survived with that Amazon and I think that Amazon is just a spectacular company and I feel privileged to have a front row seat to everything that could be changed in the world to make it more easy for consumers or citizens to live daytoday that's the way Amazon thinks about its business model and so I actually look at Amazon on as the most fascinating assignment I've ever had um Cricket is a passion I mean I love bat and Ball Sports but um you know I grew up with Cricket in India in religion and Cricket were the same for most people in India and when I came to the US I fell in love with the New York Yankees not baseball just the Yankees who I still love with passion today but between cricket and Bas and the Yankees My Love For Sports continues and the ICC is an extension of that that absolutely yeah what's the message which you will give to Indian entrepreneurs who are scaling companies within the country with passion frugality um the India of today is about chandran 2 landing on the moon uh on the South Side the first time that's inspired so many entrepreneurs in that one day it's about Aditya which is the uh probe to the Sun and it's about the next Mann Mission from India in 2025 it's about 400 entrepr 400 helicopters made in Indian design India has launched 431 satellites for 34 countries so far it's becoming more technology and the next picture which I see of India always is not the Taj Mahal it's of Technology what message would you give to those entrepreneurs who are motivated by a different phenomena today well let me just speak a little bit about India Today India is not just the most populous country in the world but I think within India rests so many little indias each one with its own needs its challenges its issues its opportunities uh India needs the entrepreneurial ecosystem more than any other country because each of these subgroups have deep issues that need to be addressed let me give you an example um we talked about satellites we talked about chandrian we talked about the probe to the Moon I mean to the sun I think that's all fantastic I watched the chandrian launch and I too was proud so um it's fantastic at the same time India also has the most number of kids who are not no malri who are not able to read and write the way they should education we have an education system that has to be completely revamped we have a higher education system where the top of the pyramid is great but then you've got a large portion that requires reinvention so the wonderful thing for entrepreneurs is that there are enough opportunities in the country that they can go off and address if they put their mind to it which have deep impact on society and business deep purpose and will change the face of the country so while I'm just in awe of all the entrepreneurs and I think every one of their ideas is just so brilliant and I don't even know where they get it I think all the entrepreneurs are working on the fundamental issues of India to build a stronger base a stronger foundation and equip Indians to have a short at a better life yes is what makes me optimistic about the Indian entrepreneurial system in India because if the entrepreneurs don't address it government cannot address all these issues now the best example I'll give you is my husband and I were driving through Karnataka we stopped by a village where the kids were just playing outside in the morning when we went d drove by in the afternoon they were still playing outside so we stopped and we talked to them and said when do you go to school they pointed at to a room they said that's our school these were kids from age five to about eight and we said why have we been playing the whole day oh our teacher never showed up teacher never showed up how often does this happen happens all the time the oldest kid says so we just play the whole day because our parents are working in the fields I look at that and go some entrepreneur is going to have to address this because if it's one room and it's one teacher there's no accountability and uh that generation of kids is going to go through a patchy education system unable to enter any schooling system right but if that group is not educated India's lost the services of that talent pool for the future and which is massive huge and so I say every part of India There's an opportunity like this begging to be addressed by an entrepreneur so I'm I'm excited about the opportunities available I hope hope as many entrepreneurs want to put satellites on the moon and do all that stuff which I aot and I say that do it I hope there are equal number of entrepreneurs who want to go and change the fundamental issues in society that the population needs so India actually grows an equitable Society I must say that U I'll give you some examples um that's happening in our own portfolio uh the agritech companies are through satellite imagery I think it's the combination of high-tech to deliver what the society needs so there are 3 and a half million farmers who are being serviced by satellite imagery through a company called cin and for soil management disease management crop productivity and so on so forth so that's a combination again right um there are uh We've delivered $28 billion of insurance and lending to Consumers right that is through technology faceless lending on technology and faceless collections um and the health we have delivered uh to 25 million people um myopia correction we've delivered Fitness we've delivered so I think what's emerging what we see as investors is entrepreneurs solving very real challenges and I go back to Gary hamler and CK prad the bottom of the pyramid mhm and that is huge and what we are now calling uh by just copying n population scale which can be achieved because that's the number of people and what's what's also helped is the digital public infrastructure UPI today is used by 350 million people and that means there's a payment mechanism in 5 years from now 750 million people will use UPI which means that in nooks and corner of the country services in small sachet can be paid for absolutely and I think these are the Innovations coming out of India that are dazzling however when we talk about popul ation scale when we talk about bottom of the pyramid that bottom has got men and women yes and I think that women entrepreneurs uh you know making sure you address women's issues should also be front and center I just don't see the funding going to women entrepreneurs I still think uh Silicon Valley ignores women entrepreneurs and I'm not sure uh India has done a lot for women entrepreneurs either a few I would say India Indian women entrepreneurs by number is about 14 to 20% that range of all ENT but don't give them micr Finance Loans we're talking about real entrepreneur in terms of funding I have to tell you you're still in the single digits and India's Got extraordinarily brilliant women extraordinary brilliant who understand the issues and there's so many issues related to women and families that need to be addressed but they can address any issue they're brilliant I think we I mean I would encourage you to think hard about what is it that's holding us back from investing in believing in and investing in women entrepreneurs I mean I saw some of the numbers even public sector Banks don't give much credit to women why is it that gine bank has a 97% repayment rate from women micr Finance recipients but outside of microf Finance they don't seem to be Hur by everybody else not delivered be heard they don't even get the financing and so I think um I think the time has come for us to say population SC requires us to think about men and women population is not just men men so that's a plea that I have well said yeah well said Indra thank you so much your message is well received and your ACC Compliments are already there in the uh Indian uh ecosystem and the world ecosystem uh I look forward to your coming to India and trust me whenever you come to India give us another couple of hours and we'll put you in front of young entrepreneurs the youngest entrepreneurs I've met is 19 years old and the average age of the entrepreneurs is around 23 to 30 years old and those are the entrepreneurs who are now having audacious what we call audacious entrepreneurs who want to change the world look forward to it make sure there are women lots of women in wom that's a condition that's a condition absolutely thank Wonder thank you so much a pleasure thank [Music] you

Channel: Chiratae Ventures

Views: 3,994

Keywords:

Id: PvUe40x6xSg

Length: 34min 27sec (2067 seconds)

Published: Tue Oct 17 2023