PepsiCo CEO resigns 12 years later

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PepsiCo CEO resigns 12 years later
Pedro Cola’s 62-year-old CEO, Indra Noy, will step down in October. She has been the helm of the soda and snack group for 12 years, and the company’s product lineup is diversified, including healthier products and increased profits.

AILSA CHANG, moderator:

PepsiCo’s long-serving CEO and one of the most prominent female and minority leaders in the United States are resigning. After more than a decade of helm, Indra Nooyi said she will abandon her CEO title in October and complete her position as chairman of PepsiCo early next year. NPR’s Yuki Noguchi has this overview of how Nooyi broke the mold.

YUKI NOGUCHI, BYLINE: Nooyi has been selected as one of the most influential women in Fortune magazines for the past 20 years. Last year, she ranked second. However, in adult Catholic schools in India, Nooyi told Freakonomics Radio earlier this year that she saw her future in different ways.

(Radio display SOUNDBITE, “FREAKONOMICS RADIO”)

INDRA NOOYI: Someone will be a hurricane, and the CEO of PepsiCo, a global company in the US – definitely not.

NOGUCHI: Many people don’t think she will go to the corner office. Marketing consultant Allen Adamson has worked with Pepsi. He said she was an unconventional choice.

ALLEN ADAMSON: First, she is a finance person in a marketing-driven company. Second, she is from a US-centered organizational structure outside the United States. Third, she is a male-dominated woman.

NOGUCHI: Adamson said that all this is good for her. Nooyi, a rock band at the university, often wears Indian sari. She promoted Pepsi’s expansion in the international market while changing its product line.

Adamson: The biggest challenge is the company – no pun intended – addicted to unhealthy sugary snacks.

NOGUCHI: Nooyi helped to change this, and the stock price benefited more than twice that of her leadership. But Nooyi took over on an adventure. In the months when she was at the helm, the US financial market collapsed. Pepsi-Cola’s two pillars, salty snacks and sodas, were under siege because both consumers and regulators demanded healthier options. Her early attention to health products was met with fierce opposition from insiders and shareholder activists. As she told Freakonomics, people questioned why she was destroying Pepsi’s cash cow.

(Radio display SOUNDBITE, “FREAKONOMICS RADIO”)

INDRA: Why do we want to change our company, which is so successful for a future we don’t know? So, one of them, I have to portray the future in a very personal way. I mean, I have to say it with my staff; your own eating habits are changing.

NOGUCHI: Her most rigorous critics are billionaire shareholder Nelson Peltz. Four years ago, he pushed PepsiCo to spin off its snack business, and Noy successfully resisted the move. Surprisingly, she did not object to Peltz or his efforts.

(Radio display SOUNDBITE, “FREAKONOMICS RADIO”)

INDRA: We studied each chart, every idea, and had many conversations with him because at the end of the day, we treated him as a free consultation.

NOGUCHI: Nooyi said that her most important move at PepsiCo was to implement cultural change. She hired a doctor as the chief scientific officer to put health and nutrition at the front and center. She is dedicated to everything from designing more attractive packaging to putting pulp fibers back into orange juice. Molyy Fool analyst Alyce Lomax said these were changes that helped Nooyi succeed.

ALYCE LOMAX: In many ways, she has been at the forefront of the last 12 years of her tenure, and I know that I know that we really need more diverse companies and more diverse management. I think she is a great role model.

NOGUCHI: Although she is very successful, she emphasizes that this is at the expense of personal costs. Working nearly 20 hours a day during the week means sometimes letting her daughter sleep under her desk. She told the audience at the 2014 Aspen Ideas Festival that she learned to cope, but her husband sometimes complained that she was at the bottom of her priority list. Her reply…

(SOUNDBITE for archived records)

INDRA: There are two ways to look at it. You should be happy because you are on the list.

(laughter)

NOGUCHI: Nuki Noguchi, NPR News, Washington.

(COLLEEN’s “SOUNDBITE” “Holding Horse”)

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