How Indra Nooyi turned Pepsi into a globally dominant brand
Indra Nooyi, former Pepsi CEO.
What you need to know:
- Indra was instantly appointed CFO, then speedily elevated to President of PepsiCo and simultaneously joined the board of directors on December 1, 2000.
- She was further afforded the use of a PepsiCo corporate jet, to her discretion.
In December 1977 in an American Library in Madras (Chennai) India, Indra Krishnamurthy fortuitously came across an article titled, 'A Shade of Difference,' in a September 1976 issue of Newsweek magazine.
It was about Yale University’s new prestigious business school, focusing on public and private management.
She sent an application, completed a GMAT test and a few weeks later, Yale sent a letter offering her financial aid of 50 per cent of the cost in loans, 20 per cent in a work-to-pay program, and the rest in a scholarship.
In August 1978 at the age of 23, she boarded a 20-hour Boeing 747SP Pan American jet in Bombay to JFK International Airport, New York City.
She ascended onto a public wagon through Interstate 95, to Yale University in New Haven, Connecticut, to begin her second MBA.
She had completed her first MBA in IIM Calcutta two years earlier. She had been one of only six women in a master’s business program that consisted of two hundred men.
In the midst of her engaging studies, Indra met and married electronics engineer Raj Nooyi in Chicago, Illinois, during a summer internship program.
Raj's parents were apprehensive about the wedding, customarily because Raj was from a prestigious academic family in Mangalore, India.
Indra was from excessively humble beginnings and was an oblivious Brahmin Hindu who spoke Tamil instead of Kannada, Raj's mother tongue.
After graduating from Yale, the coveted Boston Consulting Group (BCG) hired Indra after seven tough interviews.
Indra Nooyi's book.
In Indra's memoir, My Life in Full: Work Family and our Future, she narrates how on a Friday afternoon in late May 1986, she regained her consciousness in an intensive care unit in Kankakee hospital.
She had survived a near fatal car crash while driving her red Toyota Camry from Hoopeston, Illinois, 115 miles south of Chicago.
She spent the next few weeks recovering and relearning people's names. She had suffered a debilitating concussion.
She limped into Motorola's automotive electronics division headquarters in Schaumburg, Illinois, while still nursing her injuries to accept an offer as head of strategy.
She worked for Motorola until late 1990, when she moved to Strawberry Hill Avenue in Stamford, Connecticut, to begin a refreshing occupation as senior vice president of strategy and strategic marketing at Swiss electronic manufacturer ABB.
On March 30, 1994, Indra drove into the 168-acre headquarters of food and beverage conglomerate PepsiCo, in Westchester County, New York State.
She had accepted her appointment as senior vice president of corporate strategy and planning.
The role included overseeing 50 exalted executives, including the aura of directors of PepsiCo restaurant entities KFC, Taco Bell, and Pizza Hut.
By June 1994, three months into her PepsiCo contract, Pizza Hut USA, with its 5,100 restaurants, had a pessimistic outlook, indicating it would miss profit estimates for the second quarter and the rest of the year.
The financial reports for Taco Bell and KFC painted a grimmer picture as PepsiCo shares rapidly descended in the New York Stock Exchange by 15 per cent.
Indra visited every Pizza Hut, Taco Bell and KFC fast-casual dine-in restaurants in Chicago, Dallas and Washington DC, incognito.
She genially tracked order times, wait times, food temperature, cleanliness, back-of-the-house and front-of-the-house staffing.
Upon discovering that diners craved attention that would best be administered on a personal level by franchise owners, she advised PepsiCo's hierarchy to cut back on building new restaurants.
She insisted that they instead franchise existing locations in all Quick Service Restaurant brands to their best pragmatic operators.
After her recommendations were implemented, franchises began managing restaurants commendably, and PepsiCo’s sales and earnings skyrocketed.
In early 1996, Indra moved to Greenwich, London, to head PepsiCo's western European snacks division.
Eager to relegate the restaurant division of PepsiCo, she spearheaded an unprecedented sale of Pizza Hut, Taco Bell and KFC chains, to Tricon Global Restaurants (YUM!).
She then plunged into non-stop deals by diligently negotiating the purchase of Tropicana, America's number one orange juice maker, in July 1998 for $3.3 billion.
Motivated by her prideful vegetarian heritage, she dashed into the Health and Wellness industry, by savouring nutritional value addition.
She focused on providing clients with nutritious noncarbonated parity consistent with convenient, delicious, affordable and healthier foods, including PepsiCo's Lipton iced tea, coffee and Aquafina bottled water, which were globally gaining peerless traction.
Negotiation
She went on to expeditiously negotiate the acquisition of towering Oatmeal food giant Quaker Oats for $13.4 billion for PepsiCo.
Together with its booming cosmic energy drink Gatorade, the number one drink in the expanding sports market. Gatorade had accounted for a steady diet of annual revenue totalling $5 billion for Quaker Oats.
Indra was instantly appointed CFO, then speedily elevated to President of PepsiCo and simultaneously joined the board of directors on December 1, 2000. She was further afforded the use of a PepsiCo corporate jet, to her discretion.
She subsequently consolidated functions, including legal, HR and accounting and identified two hundred PepsiCo projects that were dominated by wastage.
She initiated spending cuts that saved PepsiCo $700 million, before investing $1.5 billion in capital expenditure to transform PepsiCo’s IT system to efficiently handle the millions of daily food and beverage orders for its clientele.
By the time she was appointed first ever female PepsiCo CEO in 2006, Indra's outstanding managerial instincts had profoundly advanced the company to near global domination.
The writer is a novelist, Big Brother Africa 2 Kenyan representative and founder of Jeff's Fitness Centre (@jeffbigbrother).
