MANAGEMENT SECRETS OF WORLD'S MOST POWERFUL WOMAN

Sunday, April 24, 2011
Indra Nooyi
FAREED ZAKARIA, HOST: This is 'GPS,' the Global Public Square. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria. We kick off with the most powerful woman in the world in business at least according to Fortune magazine, Indra Nooyi. She is the chairman and CEO of PepsiCo and she has important insights into everything-from the U.S. economy to her own company, to women at work.

Fortune magazine named her the most powerful woman in business in 2010, also in 2009, also in 2008, 2007, and 2006. That is the last five years running. Indra Nooyi is the chairman and CEO of PepsiCo.

And no, I didn't just misspeak. She calls herself chairman, not chairwoman or chairperson. She says that is the job title. She's an Indian-born scientist who, for the last five years, has been the boss of 300,000 people worldwide, running a company with $60 billion in annual revenue.

You will want to hear her thoughts on the present and her ideas for the future.

ZAKARIA: What did you think of President Obama's speech this week about the budget?

INDRA NOOYI: I think it was a speech that was necessary. It was powerful. It was clear. It laid out his programme. I think you have the Republican position that's been laid out. You've got the Deficit Commission report that's been laid out. I think it's critically important that it is not just a speech, but that it moves to action.

You bring all of these competing interests and different points of view together and say, what's right for the country and it's important to recognize that there is going to be short-term pain if you are to get long-term gain for the country.

ZAKARIA: You think about leadership, what do you think about President Obama as a leader?

NOOYI: I think he's a remarkable individual, but let me put this in context, Fareed. Just imagine that you are the CEO of a company. Just bear with me for a while, while I talk you through the story. Imagine you are the CEO of a company and your executive team, half want you to succeed, half want you to fail.

ZAKARIA: Republicans and Democrats.
NOOYI: Yes. And then imagine that your functional team, you can't hire them without the approval of your executive team.

ZAKARIA: Half of whom want you to fail.
NOOYI: That's exactly right. Also imagine that every word you say is debated in the public media every minute of the day. Also remember that your board of directors is a fragmented group who really cannot get together to fire the executive team if they don't tow your line.

ZAKARIA: The American public.
NOOYI: That's exactly right. That's the environment in which the President of the United States is working today. It's not as if the president is maintaining a successful country. The president is turning around a difficult situation. So, all things considered, you'd say he's doing a pretty good job.

ZAKARIA: When you look at the American economy right now, you have a very unusual perspective because PepsiCo and its products are sold all over the country, all over the world. What do you see?

How is the American economy doing?
NOOYI: I must say, Fareed, since last year and the changes from last year to this year, (have been) pretty significant. If you asked me this question last year, I would have said the underbelly of the economy was very, very weak.

People are shopping a little bit differently in the last couple of quarters and we are seeing this across the whole country. So that's the good news.

Now, let me give you the other side. In all of these economic analyses, there are two sides to everything. The other side is that you still have that worker who is without a job, but if you took the average, the average is better now than it was in 2010.

ZAKARIA: So, you and I once talked about Joe Sixpack who would go into a store. During the recession, he's still buying, but he's not buying the six-pack anymore, he's buying the single can. Is Joe Sixpack back to buying the six-pack?

NOOYI: Joe Sixpack is back. Bill Sixpack is still struggling. That's what I mean, the two differences. There is a portion of the economy, the portion of the consumer that's come back. There is a portion still struggling.

ZAKARIA: Do you still believe that the government needs to spend more money on infrastructure to get these people out of the unemployment lines and get back at work?

NOOYI: I worry about the deficit. I worry enormously about the deficit. So, on the one side, you can say government spending is important to keep these people working or bring the unemployed back into the work force.

On the other hand, that exacerbates the deficit and that's not a very good outcome. So, we have to think of creative solutions. I think the time has come for us all to think about a creative way to address unemployment without adding to the deficit.

So, let me throw out an absolutely crazy suggestion if you don't mind. You know, there's been a lot of talk about foreign cash-I mean, cash of U.S. companies trapped in overseas countries because, you know, the tax rate to bring them back is extremely high and puts us in a very disadvantaged position.

So, why don't we try something like this-just an idea. When President Bush proposed the American Jobs Creation Act, he allowed countries to repatriate cash for 5 percent – 5 percent tax rate. Some people argued that that didn't really create jobs and 5 percent was too low.

So, why not bring it back, let's say, at a 15 percent tax rate. OK, but then say, 10 percent of it goes into the government coffers and the other 5 percent goes into a retraining fund or a fund that retro-fits commercial buildings to make them energy efficient. But what happens now is you are forcing private enterprise to direct those funds to create jobs immediately for the betterment of the nation long term. I think we have to evolve new plans to work together with the private sector because private sector engines of efficiency.

Governments have to go through a very elaborate process to make everything happen. So, I think the time has come now to tap into this incredible power that we have in the country and make them create jobs in the short term that help the country in the long term. So, I think we have to put all these ideas on the table and see where this takes us.

ZAKARIA: But when you look at the politics in Washington, does it give you hope that some of these ideas could go from the planning stage to the implementation stage?

NOOYI: Here is the concern. I don't think the deficit of the country is a Republican issue or a Democratic issue. I think it's a country issue. I don't think worrying about the reindustrialisation of America is a Republican or Democratic issue.

It's a country issue. So, I think the time has come now for the president to force these coalitions and for the Republicans and Democrats also to say, we have to focus on the country for the next years.

I don't know if you can do it with an election year coming up, but I think people can put their differences aside and worry about the country. I think they can do it.

ZAKARIA: So, how does one do this revitalization of manufacturing? Because if you look at Germany, Germany has been able to maintain a manufacturing base even though they have very high wages, they have a pretty complex regulatory system, but they have focused on technically trained education apprenticeship programmes, things like that. Is that what's missing in America?

NOOYI: We have to do all of that, but it's not going to happen overnight. So, we need to start somewhere. I think the first step is to create a blueprint for the country. Get the right people to lay out a blueprint for the country.

I don't know if in the history of our country whether if we have ever created a blueprint, 50, 100-year blueprint. China has done it for China. How do we create a multi-generational blueprint focused on re-industrialising the country?

I think we have to do it and I think there are a lot of people who will contribute to that. I think there is an extremely qualified cadre of recently retired CEOs and C Suit executives who can all be co-opted to help author this blueprint for the future of the country.

It has got to focus on energy efficiency, you know, reducing energy dependence. It's got to focus on many, many aspects of what makes a great economy. Now, many would argue it might take two years to develop the blueprint. What happens in the intervening two years?

I think in the intervening two years, we have to think about short-term programmes to put people back to work. Again, it requires a lot of creativity. Let me throw out a couple of examples. We have an unbelievably good medical system in the United States, unbelievably good.

I mean, I have traveled around the world. The medical system in the United States is among the best in the world, if not the best. What if we were to make the United States a medical destination?

That would bring a lot of people here because there are a lot of sick people around the world. If they can get U.S. treatment, they will take it. But now, think about what that will do. It will fill up our hospitals, increase the utilisation.

It will build a whole industry around it. That's a short-term measure. I don't know, Fareed. I think there are so many creative ideas, but we have to mobilise the right people and start work.

ZAKARIA: We're going to be back with more with Indra Nooyi. I'm going to ask her about being the most powerful woman in the world according to Fortune magazine.

NOOYI: In my case, I think I did my part, Fareed. I worked my tail off. I work harder than any of the men out there, but I didn't do it because I was a woman. I did it because that's the only way I know how to work.

ZAKARIA: We are back with Indra Nooyi, the CEO of PepsiCo whom Fortune magazine has named the most powerful woman in business five years in a row.

What does it mean when you have that much power? Is it something you think about that you have this platform and that you want to do something with it?

NOOYI: I think actually the lists, when they start ranking you in terms of power or whatever, puts a bigger burden on you, Fareed. Because with all these lists comes an incredible privilege and an incredible responsibility.

The privileged part is easy because you enjoy the attention you get, but you can't forget the responsibility because you're running a large enterprise. You've got to make sure you run it the right way. You've got to make sure you're a role model for other women in particular, because I'm a woman CEO. So, you have to make sure you remain a role model. So, I think this sort of a list, really putting the focus on me, the responsibility part far outweighs the privilege part.

ZAKARIA: So, let's talk about your running of PepsiCo. You have made a very important series of moves toward healthier snacks, snacks that are good for you, better for you. Yet, right now, you received the news that your core brand, Pepsi, has been edged out by Diet Coke. Diet Coke is now the number two brand in America.

Do you worry that the bet that Americans will want healthier food products was either wrong or premature? Will you continue to go down that line? How do you manage the tension between keeping your core brand and trying moving into this new healthier space?

NOOYI: Great question. So, PepsiCo is a $63 billion company. Half the company is snacks and half the company is beverages. We have a glorious snacks business and a glorious beverage business. We are extremely profitable. We are growing.

We deliver top tier financial returns. We generate enormous cash for shareholders, phenomenal returns and our core, we are a snacks and beverages company. Twenty percent of the company is good-for-you products - Tropicana, Quaker Oats, Naked Juice, Gatorade for athletes.

The other 80 percent is fun-for-you, better-for-you, great tasting snacks and beverages. Our goal is very simple. We think there is a gigantic opportunity in good-for-you products because those categories are growing in leaps and bounds. What we want to do is make sure that we capitalise on the opportunity and, you know, go where that pack is going. At the same time, focus on the 80 percent of the core that we have so that we generate the extraordinary profitability that comes from the core.

ZAKARIA: Do you think Americans are getting healthier? You know what foreigners say. They come to America. They see Americans and say they are obese, the statistics bear it out. We have three times the rate of obesity as Europe. They say it is because of the snacks and fast food and high calorie drinks.

NOOYI: I wish the solution was that simple. I can turn it around and say, I'll give you an example. When I was a kid, I would come home from school, throw my bag, go out to play. My daughter comes home from school, throws her bag, goes to play, but sitting in front of the computer because their definition of play has changed.

They don't go out to play. They play on the computer with their friends. They can order food through the computer. Lifestyles have changed. So for us, we have to sit back and say, this is an issue that's of national importance.

How do we bring a coalition of all of the people that can help address the problem and resolve the issue? I think it's a very simplistic approach when you try to blame one product or one habit as what causes obesity. I think you will never get to an answer this way.

ZAKARIA: Let me ask you about being a woman. You're not just a woman CEO of the largest company by market cap who is a woman. You are a woman in India. You are a woman scientist. You're a chemist by training. You worked as a woman in Motorola, which is a tech company, which are notoriously all-male atmospheres. Did you feel that you were discriminated against? Did doors close to you? Did you feel like you were always battling some kind of set of restrictions?

NOOYI: I'd say yes and no. In my case, I think I did my part, Fareed. I worked my tail off. I worked harder than any of the men out there, but I didn't do it because I'm a woman. I did it because that's the only way I know how to work.

And I think that helped, coupled with the fact that I was blessed with so many mentors who came out of the woodwork to voluntary help and volunteer their advice. As long as I was willing to take it, you know, I moved forward.

Do people today face challenges? I think the situation today for women is so much better than it was many, many years ago. In the past, we didn't have the numbers. I think it's getting better.

For companies like ours, if we didn't make PepsiCo an inclusive company that's friendly to women, we are basically saying 50 percent of the work force we're not going to tap into. We can't afford to function that way.

ZAKARIA: How do you resolve the work-life balance? You have kids.

NOOYI: Yes.
ZAKARIA: How did you manage to do it all?
NOOYI: I don't know what is work and what is life. That's the first problem because sometimes going home is work and coming here is life. I think in these positions it blurs between work and life.

I'm very lucky, Fareed. I have a husband who completely and totally participates in everything that has to do with the home. Even with this eco-system, I can't tell you how many sacrifices I have had to make.

ZAKARIA: What are the ones that you think most about?

NOOYI: My daughter is going off to college this fall. I think I was there for most of the important events of her growing up. My first daughter who is now in Washington, D.C. working. I read one of her journals when she was 8 or 10 years and she said, she sat at the window, 'waiting for mum to come home because I wanted to tell her something important.

At 10:00 in the night, she's not home yet. I'm going to sleep.' It breaks your heart, breaks your heart. What did she want to tell me that was so important she sat by the window reading until 10:00 at night?

Things like that just break your heart. But then, you just sort of push it aside, push the guilt aside and say, I did the best I could. I can't just keep living on guilt and get on with life.

ZAKARIA: So, you're full of ideas and they are very broad. Do you think sometimes that you should, after PepsiCo, go to Washington and implement some of the ideas?

NOOYI: Do I have to go to Washington to implement some of these ideas? You know, as the CEO, I can consecrate a lot of ideas and I can be part of commissions and coalitions that take these ideas and then do something with it.

So, at this point, I love running PepsiCo. It's just a great company. We are on a journey and it feels good running this company. I think I'm more useful to the country as a CEO because I create jobs. I maintain the jobs. I grow the jobs and keep the successful enterprise going. I want to contribute. I want to contribute to the country. I'm willing to contribute any shape or form all these ideas.

ZAKARIA: So, President Obama should perhaps call you if there is a second term?

NOOYI: To do what? Give my ideas in a commission? Sure, anytime.

ZAKARIA: More than that?
NOOYI: I think I am committed to running PepsiCo for many, many more years, Fareed.

ZAKARIA: A pleasure to have you on.
NOOYI: Thank you, Fareed. Thank you very much.