Here's a full transcript of that interview.
Barkha Dutt- Indra Nooyi, what a pleasure to talk to you. As somebody who is dear to India, dear to America and so well known across the globe, the big attention right now, the world's attention is now on President Obama's visit. You are one of the CEOs who accompanied him. There are those who are quipping that Barack Obama is here more as the CEO of United States of America than the President. So is it all about the money?
Indra Nooyi- Well, you're making it sound like CEOs go only money hunting. That is not true. Look, I hope the President of the United States is also the CEO of the country because at the end of the day a President has to worry about politics, economics - he has to worry about all of it - and so wooing business and making sure jobs are available in the country is as much a job of the President, as the nation's security is, as the health of the people is. So he has to go out there and make sure you spread the economic message of the Unites States to the other parts of the world, so that there is economic prosperity in the United States and in other parts of the world. And I think he's doing that job right now in India and he's doing it well.
Barkha Dutt- The President comes here after a tough political time domestically, and in his own political environment in America, sometimes his critics have sneeringly dubbed him to being too left-of-centre, too much of a socialist. How important do you think it is for him to carry back a pro-business message for his own country?
Indra Nooyi- You know, as a CEO of a large company, clearly we need policies in the US government that are pro-business, because at the end of the day, we all work within the framework of a country's policies. And in the first couple of years of Obama's presidency, the business community had been at odds with the White House, it has been at the odds of the policies of the President. So whether it is industry organisations or whether it is individual CEOs, we have all had many conversations with the President, and the President himself after the elections has come out and said, perhaps I have not been as friendly to business as I should have been. And I think we are going to see a definitely different mood from the President because he realises, he knows intellectually, that business is very-very important. We are going to start seeing a much more outreach to business because, at the end of the day, if big business survives and thrives, lots of small businesses are created because it is a big eco-system. So, I think, we have to make sure that in the United States, the President sets policy direction that first of all lords big business, and thanks them for what they do, and not let the mistakes of a few taint the good work of the many.
Barkha Dutt- And do you think to that extent there will be a course correction and how much of that do you reflect in the statements you have heard from him so far in India?
Indra Nooyi- You know it is interesting, in his first two years as President, I have had the opportunity of being in many round-table discussions with him, and in those meetings, I have not seen him to be particularly anti-business. In fact he has been pro-business in those meetings. I think he has inherited the Presidency during a very-very tough time. There were certain corporate malfeasance he had to deal with, and he had to deal with an economy that was in trouble. And during that time, he didn't come across as pro-business. And I am sure he himself realised that something had to change going forward. So I think, going back to the United States, we are going to see a different tone from the White House; based on what he said publicly. And in these two days here in India, his outreach to business couldn't have been more positive; it's the best I have seen from him.
Barkha Dutt- He has also spoken about the need for open trade between India and the US and how India, too, wants to lift trade barriers and it can't be a one-way street. As somebody who is Indian-American, in a sense one foot here -one foot there, do you feel India hasn't done enough? Maybe there is little bit of a double speak because we often dub Obama to be a protectionist but we have reason to believe we are a protectionist economy ourselves.
Indra Nooyi- The one thing I'm realising right now is a company is much easier than running a country, because I don't have to worry about the politics, I don't have to worry about bringing opposition parties along. And when a CEO decides to enact a decision, we just do it. That's the wonder of running a private eneterprise. When Presidents and Prime Ministers have to enact policy that maybe popular in one part of the party and not in the other, it is a much more complex environment. So for me to comment on whether India is protectionist and (that) is right or wrong, or whether the Unites States' protectionism is right or wrong would be way over my college degree. And I say that because as a business person, I might say it is too protectionist or not, but if I were a politician I might say this is the only way India can progress because I have to protect certain industries, and the same thing for the United States. So I think it's too complex an issue to ask a simple CEO to comment on it. All that I say is globalisation is good, we have spent years trying to get to globalisation. Let's not reverse globalisation in a short time. And for global companies like ours, it is particularly important that the advances that have made in globalization not be set back.
Barkha Dutt - But, you know, some of the specific issues that are raised, whether it's opening up insurance or retail, this is something that the United States of America raises again and again. You've chaired the US India Business Council previously; you're a big part of the CEO delegation here, do you believe that India needs to do more to open up the economy? And you've often spoken in the past about infrastructure, for example, being an area with so many gaps.
Indra Nooyi- I think there is so much opportunity in India, there is so much opportunity for partnership for investment. I think the next 2 decades are just brilliant decades for India. But the decision that India has to make is - are you going to do it at a pace that is very slow and very deliberate or are you going to do it at a faster pace? Because at some point the wealth has to trickle down, and the only way you going to get the trickle-down effect is if you enact certain movements faster. So let's take infrastructure. I think infrastructure implementation in India has got to be much faster than it is today because you need infrastructure to address so many issues in society. Food, if you want to get food to people quicker and not have 40% of it waste, you need roads, and you need trucks. You need all of that to get to the population faster. So infrastructure movements have to happen pretty fast. The only way it's going to happen is of you get foreign investment into the infrastructure market and you set up some sort of infrastructure fund. The opportunities have all been laid out. Again I come back, at the end of the day; the PM has to make sure he has to get it through the political system. So I don't believe it is the thought that's lagging, it's the will of a democratic system to make it happen. This is the problem with democracy- the good and the bad of democracy.
Barkha Dutt- And then some would say, it's a key market for PepsiCo. The China model works better, but in India we love our democracy, with all its pitfalls.
Indra Nooyi- Absolutely! Look I think here is the issue - when you have a central government, (it's) a centralised authority and a democracy. And in a democracy anything you take away is considered terrible. When you have a centrally run government, anything you give them by way of freedom is considered wonderful. So this is the issue we are facing. Both our models historically have evolved. I grew up in free India, I like democracy.
Barkha Dutt- You've said that you're a CEO and you don't run a country, but elsewhere you've actually said that PepsiCo is actually like running a country. Isn't it?
Indra Nooyi- (Running) Companies the size of PepsiCo is like running a little republic, there is no question about it. The only difference is that I don't have to worry about the media hounding me every day, on every word that I say. I have a board of directors that runs the country in the interest of the stake holders. I don't have to worry about bringing warring factions together all the time. And I'm not running for elections every 2 years. So I have a very different dynamic, and when I say something, it is enacted in the company. I don't have to constantly get a vote on everything that I do. I think it's a much more difficult job that they have.
Barkha Dutt- But at a time in America at least as you said President Obama should not let a few bad examples cast a shadow on the rest of the big business. But, the fact is that, there now is a kind of a public scrutiny in a way that it wasn't there; before which is you have all these mythologised Wall Street and now Michael Douglas in a sequel, with all this greed is good mantra. At this time, you actually trying to steer PepsiCo into a different direction - you are speaking of global nutrition, you speaking of responsibility. The cynics would say when big companies do this kind of CSR, its tax saving, it's to look good, how serious are you about making PepsiCo health friendly?
Indra Nooyi - We have published our commitments in our annual report. We were the first company to go out there and last year in the annual report lay out all our commitments for the next 10 years. (It was a) Bold move because, now, people are going to hold us accountable to those commitments. I did it because I didn't want people to think performance-purpose, which is the direction of the company, was just a set of words. We wanted to show clearly that it was backed by actions and actions that could be monitored on a regular basis because now you can go to our website and it tells you exactly what our progress is. In fact, in India, they have just published the most brilliant report which takes every one of those commitments, links it to India and says exactly what all we have done in India do deliver on each of those commitments. I reviewed those reports yesterday. I'm going to make it a model for the rest of PepsiCo, because it's one of the most brilliantly done reports. Anyone who reads that will never ever be cynical of what PepsiCo is doing. Infact, I'll go so far to say, if every food and beverage company could be as responsible as PepsiCo the whole food chain will be much better.
Barkha Dutt- But did you decide at some point to deliberately to steer PepsiCo in a different direction - whether it was acquiring products like Tropicana or the health genre more. You've actually set a time line for pulling out carbonated drinks from schools. Now isn't that playing a huge gamble with profit? You're taking it away from young students who are a key market.
Indra Nooyi - Not really, because what I think the most important thing a food and beverage company should be doing is looking in at changing lifestyles at adapting your portfolio for those lifestyles. What are we doing in our product portfolio we saying to younger people- we are going to give you zero calorie beverages, they taste as good as the full sugar beverage. So if you want to drink a full sugar beverage its fine, but if you are health conscious and you should be health conscious, here's zero calorie product that tastes exactly the same. So if you have a Pepsi or a Pepsi Maxx, the Pepsi Maxx in fact tastes phenomenal, right?
Barkha Dutt- Which one do you have?
Indra Nooyi- Pepsi Maxx! Well you know, to be honest, I drink both. One day, I might just pick up a Pepsi and say I like it, and someday I'll have a Pepsi Maxx. The whole idea is to give you a balance, but what we are basically telling you is we are going to take the fun food part of the portfolio and make it better for you. Reduce saturated fat, we took out trans fat, reduce sodium levels reduce sugar levels and while we do that, we also want to give you positive nutrition. Ultimately I can't force you to eat that. I can give you the greatest balanced portfolio all of them tasting fantastic. Make it available to you and make it affordable, make it authentic; and let you decide what you want to eat. At the end of the day it's your choice.
Barkha Dutt- So you don't see that as a business gamble that could eat into profits?
Indra Nooyi- No, No! Not at all! Because you are assuming nutrition products are less...
Barkha Dutt - For young kids who are hooked on to their carbonated drinks...
Indra Nooyi- But the products have to taste great. I can give you a juice that tastes fantastic. I can give you a zero calorie product that tastes fantastic.
Barkha Dutt- It's like finding a way for broccoli to taste good.'
Indra Nooyi- That's exactly right, sneaking goodness to you. And you know what, even drinking a sugar soft drink isn't wrong, the only issue is that lifestyles have changed today. I grew up in India too, in Chennai, I used to walk to school. I played every day. Now-a-days, I look at the playgrounds, they are all gone! People don't walk to school anymore. These are actually school buses that take you to school. So what happens to these kids?
Barkha Dutt- or private chauffeured cars...!
Indra Nooyi- That too! I think lifestyles have changed so much that we have to worry about it!
Barkha Dutt - You've spoken about how often you have to think globally but act locally, and that, sort of, being a key leadership mantra that you believe in. Do you think that a lot of that for you in PepsiCo comes from the fact that you are multi-cultural, much like the visiting President? And multi-culturalism perhaps brings a completely different perspective on how you look at business?
Indra Nooyi - Could be, could be... I think that the CEO of the future has to be very-very globally aware and globally sensitive because in the past the locus of business was more in the west. And I think in today's world its becoming more diffused and the growth is happening largely the East or the Middle East. Basically what you've got is a power diffusion that's going on from a traditionally Judah-Christian world to a multi-religion world. Its going from a place where there was clear separation of church and state to countries where sometimes there isn't a clear separation of church and state. It's going from democratic regimes to regions where there is a mix of political systems. So you're seeing a very-very diffused power in the world. You are also going form a set of geographies where everybody was uniformly well off to a huge disparity in income levels. So you've really got to understand this new world very-very differently. I would say that the CEO of the future has got to be one that understands the new world and where the new power is, the growth is, happening radically different from the west, and therefore, we are training our people to look at Asia - not just as oh! there is an opportunity - but understand Asia for its glory, for its richness for its diversity because strategies have to develop for this part of the world it's got to be radically different that strategies for the west.
Barkha Dutt- Give us an example of this kind of regional adaptation that you've had to do.
Indra Nooyi - When we go to African or Asian countries, we have to worry about the over nourished, but also have to worry about the under nourished. We have to worry about flavouring systems that are vastly different. We've got to even worry about, you know, the emergence of local medical systems, you know, whether it is traditional Chinese medicine, Ayurveda in India- the way people think about what's good for you is very different than how the West thinks about it ok. When you look at ginger, you don't question its clinical properties, you assume it's good for you. You know, in my home, you get sick, for anything my mom gives a piece of ginger, they just put it in your mouth and you are ok. So we have in India, Ayurveda- certain things we assume (that) it's good for you, because its centuries of knowledge that's being passed down. So we have to approach these markets very differently. Then the automatic question that is asked is what value does a big company bring? And the way I phrase it is, big companies bring the scale, bring the discipline and bring the scientific knowledge that can be diffused. So you have to marry the muscle and skeleton of a large company with the wisdom and soul of every country, and that's the challenge. If you don't do that, you will end up with a homogenous model which is not sustainable long term.
Barkha Dutt- China and India have often been described by your company as must invest markets. These are completely different markets, completely different strands. Do you have a completely different approach to both of these markets?
Indra Nooyi- As I said, the muscle and the skeleton is the same, but the way we think about the products... In China we have traditional Chinese medicine products. You know, I spent a couple of weeks in China last summer. The first day I was there, I spent half a day at the traditional Chinese medicine institute, trying to understand what the underpinnings of the traditional Chinese medicine are. So the way we approach China, the product portfolio, it's more of a non- carbonated market than a carbonated soft drink market. There's more soft snack and sweeter snacks. So we look at China completely differently. The flavouring systems are completely different in China. How they eat the products - sometimes they even eat chips with chopsticks. So we have to really tailor our products in China for the Chinese consumer. Clearly there will be some common products, but a lot of the product systems are done for China, with Chinese price points in mind and Chinese distribution systems which are different than a Western distribution system, and the trade structure is very different too. In India, the product portfolio is very different. I mean a Kurkure as in India; I mean it is only now getting adapted in the West but with different flavours.
Barkha Dutt- Do you eat Kurkure?
Indra Nooyi- Oh a lot of it! A lot of it, I mean, look, it's a must have snack
Bakrha Dutt- It is...
Indra Nooyi - Now we are adapting Kurkure in other parts of the world but done differently. But you know, with the core product that India has... So in India too, we look at products differently that are adapted for the Indian consumer. Slice Mango- something that you know, is a phenomenal drink, but mango is not a flavour that is easily liked by many people in the West . People in Latin America like it. But we do a lot of Mango in India. The way we are selling oats here, and how the next versions of oats that you might see, are very interesting. In China we do an oats which is a morning breakfast they have. So we tailor products for each market.
Barkha Dutt- But you said in the beginning that globalisation is a must, that the process must not be reversed. But one of the pitfalls of globalisation is the possible homogenisation of cultures and traditions, and what you are describing is actually is that variety, or that heterogeneous strands still existing in the world. And I have to ask you this, after the global recession, isn't there a danger of globalisation, and capitalism, both becoming slightly bad words? And to that end, India's slightly cautious approach to capitalism - is that a better model for the world today?
Indra Nooyi- Look, I am not faulting any country's model, because each country evolves a model that's right for that country. And India's been cautious on capitalism forever. And it served the country very well during the bad times, but a country also needs to accelerate some of the developments happening in the country so that the bottom of the pyramid doesn't get left out. It's great that you're getting a huge middle class and the rich are getting richer. That's all great, but I think if you want it to trickle down, if you want the bottom three or four hundred million - the size of the bottom of the pyramid is bigger than the whole population of United States. But if you want that part of the country to be served, I think the pace of the changes has to pick up. But who am I to say? I don't run the country. I am just giving you a capitalist's point of view. I think the opportunities are huge. I think each country should evolve capitalism for itself. But capitalism and protectionism are not the same, ok? I think you should evolve your own brand of capitalism, but don't retreat into protectionism. Because the free flow of ideas and capital, you know, you can put some controls; you can regulate it but the free flow of ideas, free flow of capital, free flow of people- that's going to really lift the world in profound ways.
Barkha Dutt- To that end do you think President Obama has fought the outsourcing demon successfully enough on this trip?
Indra Nooyi- You know, I think we making too much of the outsourcing debate, we should put it aside. The President was very clear in saying, look we have to tell the whole story to the American people. It's not a zero-sum game and we should not talk in those terms. Clearly there was a time in the last 12 months or so when all kinds of labels were put on the outsourcing debate. Let him go back, let him take on this issue and talk about it. But you know outsourcing is a complex issue. When you give a job to IBM and IBM has the job done in IBM India, is that outsourcing? I don't know. I don't know what outsourcing is anymore. So I think it's a complex issue played well in the political process, but I think sanity has to come back to everybody.
Barkha Dutt- You said earlier, who am I to talk about capitalism, except in the capacity as a capitalist and CEO of a company? But you were widely tipped to be the economic adviser inside the White House. Is that and option you might still be open to?
Indra Nooyi- I don't know who comes up with these names.
Barkha Dutt- Us in the media (both laugh)
Indra Nooyi- I'm a happy CEO.
Barkha Dutt- But, you can be a happy CEO and you can move on to other things.
Indra Nooyi- Not yet! I think I want to be CEO for many years. I have been only four years into the CEO-ship. We are in the midst of a profound change at PepsiCo, fantastic change at PepsiCo, and I am enjoying it. So let me do this job for some more time please.
Barkha Dutt- But in the 'not yet' does one see a potential future engagement with public policy and politics?
Indra Nooyi- Not politics
Barkha Dutt- Public policy?
Indra Nooyi- Public policy yes. I mean I want to give back. I think the US has been enormously good to me. I often say that I am where I am today because of the incredible meritocracy that the United States is.
Barkha Dutt- So you could see yourself as an adviser in the White House, not now, in the future?
Indra Nooyi- That is a political appointee. No, I can see myself doing a commission, or doing something meaningful to say thanks. But I just don't see myself in the political arena. I am too outspoken and I will not serve any President well.
Barkha Dutt- You don't think outspoken people do well in government? You don't think Presidents need outspoken aides?
Indra Nooyi - No, in the circle yes. But you know, I just say it like it is all the time, and it is not a good thing (laughs)
Barkha Dutt- What's the one thing you have been outspoken about as CEO that you have regretted, or had to regret? Are you too outspoken as a CEO you think?
Indra Nooyi- I speak my mind out. I mean I don't know any other model that's the problem.
Indra Barkha- And has it sometimes landed you in trouble?
Indra Nooyi- People like you repeat everything (both laugh) I say back to me.
Barkha Dutt- Now, not just are you outspoken, but apparently you sing aloud in the corridors of your organisation as well?
Indra Nooyi- Oh, you... (These are) such myths, come on!
Barkha Dutt- Is it not true? It sounded fabulous.
Indra Nooyi- No, no, I don't sing loud you know.
Barkha Dutt- Walk barefoot, sing aloud, you know, it sounded like one nice hippie image inside a multinational corporate.
Indra Nooyi- There are days when the heel starts to hurt. I just kick off my shoes.
Barkha Dutt- I can empathise with that feeling
Indra Nooyi: You know by five or six, when the heels start to hurt, I kick off my shoes and walk bare feet. But that's not a big deal. Nobody else is at the office at that time, and as for singing loudly, I don't sing loudly. I might hum a tune at times when i am thinking about something but that's all fine. I mean i just do it, and (if) people ask me what you are humming, I'll tell them what it is, and they will just go on their merry ways. That got profiled into I am into singing loudly in corridors. I have no idea where this came from.
Barkha Dutt- If it's a myth, it's a great myth I have to tell you. But it probably goes back to being in the all girls rock band in Madras?
Indra Nooyi- That's true.
Barkha Dutt- Do you still pick up a guitar and strum at times?
Indra Nooyi- You know, it's interesting when i was growing up we didnt have much money. i just owned one guitar.. a sort of rinky-dinky guitar. So once I got to the States and got some money, I bought every possible guitar I could and people gifted me lots of guitars. So I must own almost ten guitars now of every kind - six- string, twelve string, acoustic, electric. I probably pick a guitar up once in three months, for five or ten minutes. You know why? Because I have to cut my nails in order to play the guitar. I am too vain to... I have no time... I just have no time.
Barkha Dutt- You said you are a blunt person. You also have a very individual approach to being a CEO. And I read this fabulous account of how after a trip to your home, and when you met your mother and you had to sit there and look pretty, and meet all the neighbours and died of boredom initially. But then you went back and that made you decide to write to the parents of every employee.
Indra Nooyi- Not every employee...I realised that once you cross your high school days in the United States, in particular, you don't get a report card on your kids. And my own kids, you know my first one, she crossed eighteen, I did not get any report card on her. And I would ask her how you are doing in college? I paid for college, but she'd say, you know, I am doing fine. That's all I got. No report card, no grades, no nothing. And then I looked at all the executives around me and said my goodness, what's the report card on them? In my case, I was CEO, so my parents got my report card in the Press, my mother- my father has passed away. They got it in the press. What is the report card for all of my other executives who are not yet CEO, not yet in the public eye? Do they go back and tell their parents exactly what they do? Have they told their parents that their boss thinks they got an A+? Have they told their parents? And I figured not. So I decided to give their parents a grade endorsement of their kids' efforts towards PepsiCo. But more importantly, just as all of the people who came to my home were thanking my mother for producing me, I thought I should thank those parents for giving me the gift of those executives- of their children to me because i could not be successful without them. And now I have an independent line of communication with the parents.
Barkha Dutt- Your PTA meeting with the parents?
Indra Nooyi- (laughs) No.
Barkha Dutt- You're sounding a bit frightening.
Indra Nooyi- I have great conversations with the parents. They cut these stories that they find about me, they send it to me. If their sons or daughters say one thing negative about me, they will say, stop don't say anything negative about her, we love her. So it's a great relationship.
Barkha Dutt- And you have time to respond?
Indra Nooyi- Yes, well absolutely. I find the time; those are important things to do.
Barkha Dutt - You know, there are those who would say that this is a kind of female approach to doing things, and I am wondering how irritating you find the gender tag tailing you in this world... And all of us deal with it as professionals in different ways
Indra Nooyi- I don't care. This is how it's going to be. This is the future. This is the human side of an enterprise. Too often we have forgotten the human side of the enterprise, and I'll give you an example. I write a letter to all two hundred eighty five thousand of my employees every two weeks.
Barkha Dutt- Every two weeks?
Indra Nooyi- Yes, every two weeks and you know I send it on Thursday- every two weeks. And I write it every Tuesday. I just sit in my office, for fifteen minutes I lock myself up. There's always one page- never more than a page, and it can be on any topic. So I have sent off so far seventeen letters. And I'd say about ten of them were on a business topic, but written in a nice way, and the other seven have been on personal issues. There was one letter I wrote to people - it was letter fifteen I think, two letters ago - where I wrote about the first day of school for my daughter who is a senior in high school there. And I wrote about the fact that every first day of school my husband and I go to the bus stop at the end of the street with our cameras. We take a picture of her standing with us, in her school uniform. But this is the last year of school! We went to the bus stop, you know, we at least got ready to go to the bus stop, took out the camera. But our daughter looks at us and says, "But mom I am driving myself to school." We just realised that our daughter has become a little woman; she is going to drive herself to school. What happened to the little child who was in a pin-a-fore and what happens to her mum and dad now? You know, we have lost control! So, the two of us retreat to the room and start crying, saying, "Oh my God! What are we going do?" Then you realise time has passed so fast and now our daughter has become a woman. We will never recapture (those moments) when she clung to us, and we could have her sit in the bus and wave to us till the bus went away. I wrote about that to my employees and said hey you know, time flies, make sure you spend time with your families, because when this day comes, it's going to break your hearts. I write to them about this. Would male CEO write? Maybe not.
Barkha Dutt- But beyond a point, you care? You just want to be evaluated on your work and..
Indra Nooyi- Absolutely
Barkha Dutt -. And not you gender?
Indra Nooyi- Absolutely, yes, and if people say, Oh God, such a female we have running a company, I say you should be so lucky to have a female CEO running the company (laughs)
Barkha Dutt- I know! More power to you. But since you have spoken about the sanctity of the ephemeral nature of life, where do you see yourself ten years from now? And before that I have to ask you one of the other great media myths. Successor to Ratan Tata?
Indra Nooyi- (laughs) where did you come up with this?
Barkha Dutt- I don't know!! This is the buzz.
Indra Nooyi- I don't know. No, I mean, look, Tata is a great company, a nation building company. Ratan's a great guy and you know the Tata's themselves are a phenomenal company. Unfortunately I am running a phenomenal company myself and I love doing what I am doing, so...
Barkha Dutt - Ten years from now?
Indra Nooyi- I have no idea. Ten years..
Barkha Dutt- Two years from now?
Indra Nooyi- I hope I am still running PepsiCo. That's what I'd like to do. Ten years from now, you know, like I said I'd like to give back - in some shape or form. Whether it is five years or ten years from now, fifteen years from now, I don't know. I don't know when I will be tired of being a CEO and want to do something else. I don't know.
Barkha Dutt- You are not tired yet clearly...
Indra Nooyi- Not yet.
Barkha Dutt- Well I think you make both India and America proud and more power to your power and multiculturalism in general. Thanks, (it was a) pleasure to talk to you.
Nooyi- Thanks, very nice to talk to you.