1

Final Project

Indra Nooyi

Cecilia Montero

August 23, 2020

Introduction

Indra Nooyi is a transformational leader that change the path of PepsiCo. As a CEO, she worked

closely with different teamwork and was able to transmit trust and confidence.

Her leadership influenced her team to work in the same direction as PepsiCo was going. She

was able to build and growth high performance teamwork that were focused in developing

different solutions for the challenges that the company faced.

She understood that every teamwork is unique, so before working with them, she analyzed and

learn the different background in order to set goals and objectives. Her communication skills

reinforced her vision; she always engaged her employees and confirmed the vision of the

company, so trust became part of their culture.

Indra undertook the change in the market preferences and how this was affecting PepsiCo. Her

leadership gave her the power to change the company strategic plan. She focused on results and

sustainability; she built teams with a clear vision.

The use of best practices let her to change the culture of Pepsi, employees felt engaged and

willing to have their footprint in the company.

Communication and motivation were the key performance in Indra’s success as CEO and Leader.

Indra Nooyi was a leader who handle problem-solving, conflicts and negotiation successfully.

Her previous experiences helped her to define the styles and skill in order to success as a leader.

She handled important negotiations as the acquisition of Tropicana which bring PepsiCo a big

market share in the beverage industry where the company was losing power.

Background
Indra Nooyi was born in India and move to the US in 1978 to complete her master’s degree. She

joined PepsiCo in 1994 and ranked the 2nd most powerful woman on the Forbes list in 2017

(Premark, 2018).

Before joining to PepsiCo, Indra worked for Boston Consulting Group, Motorola Inc, and Aea

Brown Boveri.

Indra is considered one of the top influential leaders in business; she follows the 5 C’s Model of

Leadership: competency, courage, confidence, communication skills and compass. Her

relationship-building skills are big part of Indra’s success, she understands the importance to

know the people she is working with (McKale, 2018).

I. Leadership and Teamwork

Leaders have key roles within the teamwork as building trust and inspiring people, coaching,

creating a team identity, supporting decisions and encouraging team members (DuBrin, 2019).

Indra Nooyi had a great impact as CEO of PepsiCo, she created a vision, encourage and impulse

her people. She introduced an initiative called “performance with a purpose” which focus on a

long term grown and sustainability (Novak, 2018).

Indra re-designed the organizational structure of PepsiCo, she re structured PepsiCo 7 business

units around the world as:

 Frito Lay North America,

 Quaker Foods North America,

 North America Beverages

 Latin America
  Europe

 Africa, Middle East and South Asia,

 Asia Pacific, Australia, China, and New Zealand (PepsiCo, 2015).

After Indra defined the new vision of PepsiCo, she selected the responsible for each unit where

the new leader will have to set up the same vision as PepsiCo was taking. She created different

ways of communication, so her team can feel supported and listened all the time. Indra gave

them power to make decision and execute actions that can benefit the entire unit.

Indra used a collaborative leadership style to build and maintain relationships, handle conflicts in

a constructive manner and share the control and responsibilities.

As a leader, communication is a key element to engage people. The key elements of

communication are energy which is the magnitude of the formal and informal communication,

engagement which represent the degree of interaction between team members and the group

discussions, and exploration which mean that team members will get together to explore more

initiatives and report to the group their findings (Gray, 2018).

Even that PepsiCo has more than 18,000 employees, she managed to listen them. When she

became a CEO in 2006, she held town hall meeting with employees to hear what they are

looking for and where the company should go. She understood that the employees where not

engaged with the company as many of them says they are just looking for a paycheck (Ignatius,

2015).

Years later, she created the Pepsi Refresh project initiative to bring ideas from people outside and

inside of the company for an exchange of $20 million in grants (PepsiCo, 2010).

Nooyi managed the communication with her employees to engaged them with the company and

her vision.
In order to create her team mission, she had to create the company long-term objectives so the

team will work along with the company vision which means the employees will understand that

theirs jobs have a purpose. When Indra set the teamwork mission, she started building trust so

each member can collaborate and have a confidence on each other.

Indra was able to create and promote a high-performance teamwork by giving them autonomy

and influence within the company. She empowers her team to act as mini entrepreneurs, so they

were actively engaged with the company and looking solutions. Employees of Frito-Lay in

Arkansas created a way to recycle plastic waste into crates, outerwear, and other good; when the

employees feel they can make the difference, they will stay loyal (Tang, 2018).

Nooyi used to recognize her teamwork with prices and rewards; sending letters to her high

executives’ parents was the one most impacted them, all the work was reinforced by this

emotional award.

Indra was very carefully at the moment of staffing or selecting her executive team. She selected a

diverse group to ensure she gets vision from different perspective and different group ages. She

selected a group of people for mentoring, so they became the new leaders. Ramon Laguarta was

in her executive team who now became the new CEO of Pepsi.

When Indra was building her team, she focused on team-oriented people and who was engaged

with the vision that PepsiCo was taking.

Nooyi created teams that has people with different backgrounds, goals, perspectives that makes

them unique. She was able to recognize who she can trust and will never let him down, but also

recognize who does not have goals or does not want to be competitive (Mindtool, 2015).

Building trust was very important for her since she was able to delegate and have confidence on

her teamwork. Indra was able to develop a closer relationship with the people she directly
supervised because they shared everyday activities and get to know more personally. As a result,

their loyalty increased in both ways. Indra could not develop the same strong relationship with

all 300,000 people who worked in PepsiCo, but she knew that every employee depends from

PepsiCo for their living. She was able to engage most of the out-group members back to the

company vision (Hedayti, 2014). Creating job security, building careers, promoting people she

was able to connect and motivate most of the employees at PepsiCo engaging and increasing

loyalty.

Indra used different techniques to develop one of the strongest teamwork than PepsiCo had; she

was focused on learning who she was working with, setting goals according to the direction that

PepsiCo want to go, give value to every worker, motivated to take initiative.

Employees started changing their perception about PepsiCo and working motivated in the same

direction as Indra was influencing. The level of engagement was increasing at PepsiCo, so

employees were willing to stay with the firm. Therefore, the employee retention rate improved,

so the moral of the team was higher, it reduced the time dedicated to staffing and training,

increased PepsiCo productivity, and reduced cost.

Indra used best practices to structure PepsiCo and develop her executive team and the

organization. She engaged her executives and workers; she found the purpose of her executives.

She was able to identify who was engaged to their job and who was just coming for obligation.

She looked for feedback and develop a program to make her employees care about PepsiCo’s

vision. Engaging the worker not only creates an enthusiastic and productive environment, it

foments the proactivity, employees are willing to take more responsibility and perform better.

Nooyi always shared her confidence, so her team was engaged to her ideology. As a leader,

showing confidence improve the moral of the team.

understand the problem and the solution.

Indra created a new atmosphere for teamwork, they created a diverse group of people motivated

to generate new ideas and willing to share Indra’s vision in order to create a competitive business

environment.

When Indra was staffing, she was following the same best practices she had with her executives,

she developed a plan and explained the necessities and the skills she was looking for. She

promoted internal sourcing, so employees can post themselves for another position within

PepsiCo. When she was looking outside of the company, she shared the needed skills but also

look for their motivation.

PepsiCo teamwork created cultural cohesiveness, team were very diverse, but they were able to

share the same company values and vision which increased a collective insight.

Indra was able to build a great teamwork along the company; the vision of the PepsiCo was share

at all levels and successfully executed. All her executives and managers were motivated by her

style and conviction that they stayed engaged with the company. Indra managed an efficient

rewards program that was able to retain her top talents. Her skills to created teams were big part

of her success since she had people around her who believe and follow her.

II. Organizational Vision

achieve it (LFGSM, 2020). Indra Nooyi undertook the market trend and the company priorities

in order to tenure her organizational vision; it was called “Performance with Purpose” where she

directed the company to sustainability and redesign the values of a changing culture

(Spiridigliozzi, 2018). She was not only focused in short-term priorities, but also long-term goals

where sustainability and profitability were tied together (PepsiCo, 2018).

Indra developed her organization’s strategic plan through crowdsourcing which uses collective

intelligence from the public for accomplishing tasks (DuBrin, 2019). When Indra became a CEO

in 2006, she held some town hall meeting to hear problems, solutions, and expectations from the

company (Ignatius, 2015). Through this method, Indra collected information that was not seen by

her, build enthusiasm and aligned toward the company’s strategic direction.

Indra used almost all of the methods to support her development of the organization’s strategic

plan; she conducted an outdoor screening where she determinate the market was moving faster to

healthier and sustainable products; in the other hand, she got an internal analysis where she

found out the employees engagement was low and need to reactive the enthusiasm.

Indra’s organizational vision of “Performance with a purpose” was share to the entire team, and

she motivated her employees to work in the same vision. She used trust as a strategy for

motivating her team; she was always transparent about the current situation of PepsiCo showing

how the company sales were falling and people was walking away from their products, so being

honest made people trust on her new vision. Indra also used a reward system with bonuses, paid

time off and flexible hours where she promoted the family time, this program made her

employees feel she cares about them. Nooyi also used recognition, she held meeting were used to

recognize efforts and new achievements of her team, she also used personal recognition sending
unique letters. Indra used the feeling of happiness because she showed the new PepsiCo cares

about people and they keep working to reduce the negative impact on consumer.

I would suggest she needed to perform a horizontal analysis so she can determinate with

providers/suppliers are strategic partners to support her long-term vision; suppliers are critical in

the develop of the planning since we want to assure continuity.

Indra had to involve more deeply with the communities, so PepsiCo can have presence in local

events like school races or parades where people can feel they are a company promoting the

well-being of the community.

III. Organizational Culture

Power can come from the organization or the individual; the position of the person in the

organization give legitimate, reward and coercive power (DuBrin, 2019). Nooyi had legitimate

power since she was at the highest level of the organization; however, she had to aligned with

the organization culture to respect the timing of changes in the organization. As a CEO, she had

the authority to give employees rewards for compliance, she offered monetary and emotional

rewards. Coercive power is the power to punish for noncompliance; Indra was not afraid to give

people a negative feedback; however, she empathizes with a sense of humor (LPWO, 2016).

Personal power is derived from the individual and it can be classified as expert, referent, and

prestige power (DuBrin, 2019). Indra has a prestige power; she is well recognized around the

world for her brilliant career and her reputation. The politic power is associated with the

activities related to influencing the actions and policies of the company (Cairns, 2017). Indra did

influence the direction of the company and used her legitimate power since some executives
were not convinced for the direction the company was taking, she made official the strategic plan

on “Performance with a Purpose” and started its execution in 2006.

Changing the culture of PepsiCo was not an easy task, it required to show a clear vision and a

strategic plan that aligns with the actions Nooyi was taking. Indra used a clear communication

with her employees in order to change the direction of PepsiCo. She applied the corporate social

responsibility “Performance with a Purpose” as a strategic plan. Indra engaged her employees to

the company’s vision since they were promoting a purpose to work in Pepsi; and all the work

they do affects positively the environment.

Indra used her positional power to engage her teamwork and managers in each business unit; she

had the rewards power to offer promotions and retain her main talents. She mentored her top

talents in order to give them more responsibilities or higher positions as Laguarta.

In order to change the culture, she impulse the autonomy so the employees are proactive and

problem-solvers. People will feel motivated to work for a company who listen their ideas and

execute them.

The site in Arkansas received two honors for been an environment friendly facility; they were the

first food manufacturing site to receive the gold certification from LEED (Benton, 2011).

Employees were motivated to come up with ideas about the waste disposal, so they develop a

plan to reuse, recycle the plastic that Frito Lay was generating, and they were recognized not

only from the company but also by the local authorities. Indra moved the PepsiCo towards a

sustainable company were the employees are motivated and engaged. Her strategic plan was

clearly communicated at all levels of the company, the teams were built sharing the same vision

and with the same identity.

order to extend and grown her portfolio. Indra redesigned the products according to the current

market situation; PepsiCo modified their portfolio to became more heartier like reducing salt and

oil; at the same time, the company has 23 brands around the world that keep growing the

company in a 3-4% every year (Safian, 2015). She recognized that extending the lines of

products will not attract new market; instead, the consumer will get confuse about the options is

presented. They did increase a few flavors for Doritos, but instead they acquired Quaker which

brings a new market to the company.

Indra’s practices helped to redesign PepsiCo taking from a company which was declining to

bring it back to the growing number where millennials want to work as they feel identify with

the purpose.

Nooyi used her power to effectively change the direction of the organization; she introduced a

new vision for PepsiCo capturing a bigger target market and influence her employees to believe

again in the company and share the same passion as her. She was able to retain her top talents

with rewards and growing programs and create expectation for outside people who wanted to

join PepsiCo.

IV. Problem-Solving

An important role of each leader is his problem-solving skills; leaders must have a good process

when they are working on a problem (MindT, 2020). Indra Nooyi mentioned that her leadership

style was shaped when she was working in Boston Consultant Group were she gain the inductive

thinking to solve problems which is how to think a problem in micro terms but also to zoom out

fitting the environment and zoom it back to solve it (Burnison, 2011).

and implementing a sustainable plan for PepsiCo. She was constantly tracking the market and

how to impact positively the community. After she identified the problem, Indra created the

“performance with a purpose” which was based on two ideas: tackling the obesity epidemic and

making PepsiCo an environmentally sustainable company. The new strategy was not well

received by the entire executives, Indra had to negotiate and use her power to run the strategy.

After three years, the strategy started showing positive result and the value of PepsiCo stock

increased in the market; it also created a good perception of the company as well the products.

Indra have different skill as active listening, creativity, critical thinking, decision making, risk

management that help her to succeed.

As tools, methods and strategies, she used her experience, knowledge, communication skill, and

consistency to develop a sustainable plan called “Performance with a purpose” which was focus

on products and operations. Another strategy that Noooyi used to solve problems is her ability to

take macro problems and see them from a micro perspective in order to resolved them and zoom

it back to a macro perspective. She also used her motivation as a strategy, she used to tell her that

easy task anyone can do it, and she has to differentiate from the other creating solution for tough

assignments. Indra also kept her “feet on the ground” so she does not block her mind from

strategically thinking.

One thing of emulation is Indra’s hands-on task. She mentioned that every weekend she used to

go to the supermarket to see how the products of PepsiCo are displayed. When she was back to

the office, she used to share her thoughts to her R&D, marketing, and production team in order to

get a better presentation that fits the consumer needs. Something to avoid from Indra’s leadership
was her low rate of delegation. She trusted her team, but many actions she could delegate, she

ended up doing herself.

V. Conflict Management

Conflicts take considerable time of leaders and managers; if the conflict arises at the top

executives, it can have big consequences for the organization (DuBrin, 2019).

When Indra assumed the direction of PepsiCo, she had experience in BCG, Motorola and Asea

Brown Boveri which shaped her leadership personality (Brunison, 2011). Previous positions

made Indra to have a collaborative style to handle conflicts. Nooyi demonstrated the

collaborative style when she was working on the project for pollution management, when the

conflict arose for training families and individuals about recycling products, she listened to her

team and both learned, they ended up developing biodegradable materials; this project took six

years to implement.

Indra was a good listener, she used to listen to everyone; however, the final decision was hers.

She liked to satisfy the needs of her team but keeping her vision. Indra saw conflicts as

opportunities to grow because she can change them and open new doors. In 2012 when there

were rumors about losing her position due to low profits, her strategic plan started showing

results, she was able to show profit increase and recovering the target market of PepsiCo.

Indra used a collaborative style to resolve conflicts within the organization, her communication

skill where very important to effectively manage problems in the company.

Negotiation strategies help to sustained and strengthened relationships. As a good negotiator,

Indra used her life-student conviction to be prepare for negotiations; she used to study two or
three weeks prior to any discussion in order to have the adequate date to back up any argument.

Indra promotes the communication, and she is an active listening. In order to solve problems and

conflicts, she actively listens to understand and offer a win-win solution.

Indra handled the negotiation to purchase Topicana Company for $3.3 billion from the Seagram

Company in 1998. Seagram was the biggest orange juice company at that time and looking a

sales price of $4.1 billion. Indra was taking to Ellen Marran and Mr Rodkin who was the

president of Seagram, she shared her opinion that the selling was price was to optimistic for the

current situation since a hurricane recently affected the county, she made Seagram to reduce 0.80

billion for the selling price. For this negotiation, she was well prepared, and she studied all the

information necessary, she called the attention of the other side quickly and controlling the whole

process of negotiation (McKay, 2011). Her skill like self-confident, passion speech, motivation to

achieve and leadership’s temperament help her to succeed in this example.

One thing to emulate from Indra is her listening skills; she always mentioned that any feedback

is positive, and we should learn from it. Something to avoid from Nooyi was her the level of

pressure she used to put on her team. For example; if her R&D did not have an answer or a

solution, she will not let them go and some temper tantrum used to arise (Snyder, 2016)

VI. Conclusion

Indra is a transformational leader that was able to build, engaged and motivate her team to work

in the same direction as PepsiCo was going. She was able to engage people and learn from them.

She worked in different programs to gain more understanding about her employees’ vision and

what was motivating them. Indra was able to utilize different techniques to build great teamwork

and create confidence in each member.

was reflected in the strategic planning where employees were pointing in the same direction.

Indra shared a clear vision, so the team were aware of what the company was looking for, and all

the team members were aligned in the same plan.

Motivation was a key to engaged people. With a clear strategic plan, she motivated her

employees to work for a purpose. He powers let her to change the culture of the company.

Indra Nooyi is a leader that showed how problem solving can help us to identify and change the

company in the best way showing creative solutions for current problems. Her ability to break

problems in small prices but keeping the entire picture help her to control all steps but maintain

the strategy. Indra is categorized as a top negotiator; she controls the situation and shows her

passion until the other party is convinced. She handled successfully negotiations for PepsiCo.

Indra demonstrated that coming from minorities can have some benefits since she had a different

perspective of the teams and how they can perform better. Thinking differently from the other,

can create new ideas that can transform business in a better way.

She is a leader that is constantly learning, so we never have to give up since the market is

changing every day; we need to study the new trends and never be afraid of taking risk.

Communication is the key for success, Indra showed us how having excellent communication

skills can make the difference. She recommended investing in communication training because a

leader has been able to share ideas with her team but also the stakeholder who will have different

question as the employees.

A leader needs to know how to handle conflicts since there are always going to be difficult times,

she needs to be able to set conflicts down and generate opportunities from them. Many people
walk away from conflicts, but a leader has to be able to solve them since this can affect the moral

of the team.

Leaders spend a lot of their time negotiating, so building negotiation skill can help you to

manage better your resources. Every day a leader has to negotiate with employees, suppliers,

people inside and outside of the company, so he has to show confidence and be prepared, so the

outcome can be beneficial for both parts.

Indra became part of the history and many people are trying to replicate her style. She was an

excellent leader that teach us how to think outside of the box.

References
Benton, V. A. P. B. J. (2011, March 3). Frito Lay Receives Not One, But Two Honors at its

Jonesboro, Arkansas Facility. Retrieved from

https://ehssafetynewsamerica.com/2011/03/03/frito-lay-receives-not-one-but-two-honors-

at-its-jonesboro-arkansas-facility/

Burnison, G. (2012, July 30). How Pepsi’s Indra Nooyi Learned To Be A CEO. Fast Company.

https://www.fastcompany.com/1750645/how-pepsis-indra-nooyi-learned-be-ceo

Cairns, T. (2017). Retrieved from https://onlinelibrary.wiley.com/doi/pdf/10.1002/ert.21598

DuBrin, A. J. (2019). Leadership: Research findings, practice, and skills. Boston, MA: Cengage.

Gray, B. (2018, June 11). The Three ‘E’s to High Performance Teams: Energy, Engagement and

Exploration. Retrieved from https://blog.jostle.me/blog/the-three-es-to-high-performance-

teams-energy-engagement-and-exploration/

How Indra Nooyi Turned Design Thinking Into Strategy: An Interview with PepsiCo’s CEO.

(2016, November 3). Retrieved from https://hbr.org/2015/09/how-indra-nooyi-

turned- design-thinking-into-strategy

Leadership Model - Strategic Vision | LFGSM. (2020). Retrieved from

https://www.lakeforestmba.edu/about/leadership-model/strategic-vision.asp

Leading People Within Organizations. (2016). Retrieved from

https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-

v1.0/s16-leading-people-within-organiza.html
McKay, B. (2011, Jan 12) Pepsi finds a way to juice its sales. Retrieved from

https://www.southcoasttoday.com/article/20001119/news/311199961

Novak, D. (2018, September 12). Follow Indra Nooyi's example: Become a leader people are

excited to follow. Retrieved from https://www.cnbc.com/2018/09/12/pepsico-indra-

nooyi-be-a-leader-people-want-to-follow.html

Pepsi CEO: Break With the Past, and Don’t Play Too Nice. (2016, May 31). Stanford Graduate

School of Business. https://www.gsb.stanford.edu/insights/pepsi-ceo-break-past-dont-

play-too-nice

Safian, R. (2015, December 16). “It’s Got To Be A Passion, It’s Gotta Be Your Calling”: Indra

Nooyi. Retrieved from https://www.fastcompany.com/3036581/its-got-to-be-a-passion-

its-gotta-be-your-callingindra-nooyi

Tang, J. (2018, September). 4 Ways PepsiCo’s CEO Energizes (and Retains) Her Employees.

Retrieved from https://business.linkedin.com/talent-solutions/blog/employee-

retention/2017/4-ways-pepsico-ceo-motivates-her-employees

What Is Problem Solving?: (2020). Mind Tools.

https://www.mindtools.com/pages/article/newTMC_00.htm