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WOMEN LEADERSHIP CASE STUDY

LEADERSHIP - THE INDRA NOOYI WAY


"Leadership is hard to define and good leadership even harder. But if you can get people to follow you to the ends
of the earth, you are a great leader. As a leader, I am tough on myself and I raise the standard for everybody;
however, I am very caring because I want people to excel at what they are doing so that they can aspire to be me
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in the future."

- Indra Nooyi in an interview to CNBC, in June 2008.


"As someone who has always aspired to build a company committed to its people and to the world, I admire her
determination to achieve sustainability at an established company like PepsiCo. And I believe that all socially
." 2
responsible companies could learn from Indra Nooyi's style of leadership

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- Howard Schultz, President and CEO of Starbucks Coffee Company, on presenting Nooyi the
2008 Time 100 award

Introduction
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Indra Krishnamurthy Nooyi (Nooyi) became the first woman CEO of PepsiCo Incorporated (PepsiCo)
in 2006 at the age of 50. She was listed among Time magazine's World's 100 Most Influential People in
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2008.

In a poll conducted by Forbes Magazine for the World's 100 Most Powerful Women in 2008, she was
ranked Number 3.
In Fortune Magazine's annual ranking of America's leading business women titled 50 Most Powerful
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Women in Business, she was ranked #1 for three successive years in 2006, 2007, and 2008.

Nooyi joined PepsiCo as Senior Vice President (SVP), Strategic Planning, in 1994. As SVP, she directed the
company's global strategy. She initiated and mapped out a number of PepsiCo's strategic decisions including
the spinning off of its restaurant business, the merger with Quaker Oats Company, an American food
conglomerate and the acquisition of Tropicana, among other contracts.
In 2000, Nooyi was promoted as PepsiCo's Chief Financial Officer (CFO). She was also provided a seat
on the Board of Directors and assigned the additional role of President with associated responsibilities
for PepsiCo's corporate functions including finance, strategy, business-process optimization, and
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information technology.

1] Simon Hobbs, "Indra Nooyi - Simon Hobbs Meets the Chairman and CEO of PepsiCo,"
http://cnbceb.com, June 2008.2] "The 2008 TIME 100 - Builders and Titans," www.time.com, 2008.
3] Starbucks Coffee Company is one of the world's leading coffee chains that had a joint venture with
PepsiCo to market and distribute Starbucks products.
4] Headquartered in Purchase, New York, PepsiCo is a multinational snack foods and beverage
company, with revenues of US$ 39 billion and over 185,000 employees as of 2008. PepsiCo owned
five billion dollar brands namely Pepsi, Tropicana, Frito-Lay, Quaker, and Gatorade.
5] "The 2008 TIME 100 - The Complete List - Builders and Titans," www.time.com, 2008.
6] "50 Most Powerful Women in Business," http://money.cnn.com/magazines/fortune.
7] "Indra Nooyi Named Global CEO of PepsiCo," www.thehindu.com, August 15, 2006.

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WOMEN LEADERSHIP CASE STUDY

In 2006, Nooyi became the fifth CEO of PepsiCo. As CEO, she continued to steer PepsiCo based on the
vision of "Performance with Purpose."

She implemented a number of measures to improve the sustainability of the company's operations and
image by focusing on improvements in the health implications of PepsiCo products.

Measures such as removing trans-fats from PepsiCo snacks, product innovations in the Quaker Oats brand
to come out with a range of consumer perceived healthy snacks, categorization of its snacks into three
categories named fun for you, good for you, and better for you were undertaken under her leadership.

Nooyi's strategic measures to tackle the slow-down in the beverages and snack food industry included a
productivity improvement program, the benefits of which were expected to the tune of US$ 1.2 billion
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over the next three years beginning 2009. Other measures under her leadership included aggressive
expansion into the emerging markets of Brazil, Russia, China, and India and product and process
simplification across the organization.

When Nooyi was SVP, the strategic measures that she planned and implemented resulted in a growth in
PepsiCo's sales and profits.

The company's overall sales increased from US$ 20,337 million in 1996 to US$ 26,935 million in 2001 and
net profit doubled from US $ 1,149 million to US$ 2,662 million in the same period. After she became the
CFO and President, sales recorded a further growth from US$ 25,112 million in 2002 to US$ 35,137
million in 2006 when she was promoted as the CEO.

However, Nooyi also had her share of critics, who found fault with what they called her lack of operational
skills, her mercenary handling of the PepsiCo pesticide content issue in India, as also her portraying
PepsiCo products as healthy while according to the health experts, they were not...

8] PepsiCo Press Release - Company Reports Third Quarter 2008 Results," http://phx.corporate-ir.net,
2008.

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WOMEN LEADERSHIP CASE STUDY

Nooyi as A Strategist
Within two months of Nooyi joining PepsiCo as SVP, the company's restaurant business, which it had
acquired a decade earlier and in which it had invested billions of dollars to build up, entered a sluggish
phase with lower sales, volumes, and profits. Nooyi worked with Roger Enrico (Enrico), Chairman and
CEO of Frito-Lay, who had been asked to take charge of PepsiCo's restaurant business as Chairman and
CEO of PepsiCo Worldwide Restaurants, and turn it around. Together, they investigated the problem
and made efforts to analyze what was wrong with the business. They concluded that the problem was
with PepsiCo trying to adopt a management and distribution model that was more suitable for a packaged
goods industry rather than a restaurant chain in the services industry...

Nooyi Becomes CFO


Nooyi was promoted as the Chief Financial Officer at PepsiCo in February 2000. A year later, she was
promoted as the President and also provided a seat on the Board of Directors. As a CFO, she was
responsible for innovation, finance, procurements, investor relations, strategy, and information technology
functions...

Nooyi as CEO
In October 2006, Nooyi was promoted as PepsiCo's CEO. Analysts felt that her diverse knowledge of
global markets and ethnic background were the reasons for her becoming CEO. On her appointment as
CEO, Reinemund said, "She not only co-authored our vision and drafted...

Response To Global Economic Slowdown


PepsiCo faced a number of economic challenges in 2008. Spiraling fuel and energy prices, rising costs of
raw materials and other commodities, and increased packaging costs across economies had become a
cause for concern.

The Criticism
Notwithstanding her successful stint in PepsiCo, Nooyi also had to face criticism on several fronts. She
was criticized for her lack of operational experience. Nooyi had joined PepsiCo after six years in consulting
and at PepsiCo too, had worked as a strategist before becoming CFO and later CEO...

Exhibits

Exhibit I: Awards and Recognitions Received by Nooyi

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WOMEN LEADERSHIP CASE STUDY

EXHIBIT I
Awards and Recognitions Received by Nooyi

Year Name Awarding organization

2015 Honorary Doctorate of Humane Letters State University of New York at Purchase

2013 Honorary Degree North Carolina State University

2011 Honorary Doctor of Laws Wake Forest University

2011 Honorary Doctor of Laws University of Warwick

2011 Honorary Doctorate of Law Miami University

2010 Honorary Doctorate of Humane Letters Pennsylvania State University

2009 Honorary Degree Duke University

2009 Barnard Medal of Honor Barnard College

2008 Honorary Degree New York University

2007 Padma Bhushan President of India

2004 Honorary Doctor of Laws Babson College

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