Top 10 RULES for Success from Indra Nooyi

The bolder we can be, the better. The more we can break the rules, the better off we're going to be. I think every issue we are facing today is long-term in nature and requires systematic solutions. And if you're willing to make all the trade-offs that you need to make, you can have it all.

What's up, Believe Nation? It's Evan. My one word is believe, and I believe in you, and I want to see that great thing that you have inside of you come out so you can help change the world. So to help you on your journey today, we're gonna learn from the CEO of PepsiCo, Indra Nooyi, and my take on her top 10 rules of success. Rule number 6 is my personal favorite, and I'd love to know which one you guys like the best. And as always, guys, as you're watching, if you hear something that really resonates with you, please leave it down in the comments below and put quotes around it so other people can be inspired. And when you write it down, it's much more likely to stick with yourself as well. Enjoy.

The bolder we can be, the better. The more we can break the rules, the better off we're going to be. Because, you know, the world is full of ideas today, and if we don't do it, somebody else is going to do it. In fact, I'd say little startups are capturing a lot of the growth today, even in our space, even in the food and beverage space. So in many ways in our company, we have to act as if we are a bunch of little startups. And that's what we are, a bunch of little startups. So in order to do that, we've got to allow people to be bold, you know, write the rules any way they want. And that's what they're doing in our company. What advice do you have for women running small businesses? Look, running a small business is as difficult as running a large company because you still have to get growth. You've still got to meet payroll. You've still got to worry about all the constituencies. I think the advantage that us big company CEOs have is that we have a network of people we can talk to and get advice. I think it's important that people who run small businesses rely even more on blogging networks or the digital world to seek other people who are also running small companies to get advice. Because at the end of the day, you can't rewrite the book on every issue that you have. You've got to seek people who've been through that and then learn from all of the experience that they have and build from that. And so I think it's very, very important people who run small businesses reach out and get advice.

I remember very clearly 6 or 7 years ago when you started pushing Pepsi in the direction of healthy foods, and you got hammered by some of your shareholders saying, you know, focus on profits. If you're making more money, make money off of the sugary soft drinks, don't get caught up in political correctness. That was a pretty tough time for you.

Yeah, I mean, what would they say today?

Well, now it looks okay. But that requires a 7-year focus. They were looking quarter to quarter.

No, you're right, Alan. I think every issue we are facing today is long-term in nature and requires systematic solutions when we have political cycles that are short-term in nature and investors who are short-term in nature. So the question is, who is going to address these issues? We're looking at everything through a microscope and we've got to look at a microscope and a telescope. From my perspective, that is the only strategy I knew and that's the only strategy I know. If my board, my investors didn't like that, I wouldn't be sitting here with you today. But I was very comfortable that that was the only way the company should go because I was looking at the consumer data, I was looking at societal data, and I realized that our strategy to shift the portfolio, becoming more environmentally conscious and creating an environment that was good for our employees, was the only shareholder value-creating strategy in the long term.

Let me ask you this. Before he passed away, you spent some time with Steve Jobs.

Yep.

And I was hoping you could share with us a little bit of what that conversation was like and its impact on the way you manage the organization.

You know, he was very, very gracious to agree to see me when I first became CEO. I didn't know him, but I knew somebody who knew him, and he said, "Come on down to the Apple offices," and I went by to see him, and he said he'd give me half an hour and give me a couple of hours, and he taught me a lot in those 2 hours. First, we talked about our mutual love for vegetarianism, 'cause I'm a vegetarian, he was a vegetarian. But once we crossed those basic introductory topics, he asked me what I was interested in making a mark on in PepsiCo, which included things like design, transforming the portfolio. And this is what he said to me. If design is important to you, it has to report to you. Because it's a new skill you have to build in the company. If you don't show CEO support for that function, don't even get started on the journey. The other thing he told me, which was unusual for me because it was just not in my personality to do that, he said, "If you really feel strongly about something and you don't like something people are doing, throw a temper tantrum. Throw things around because people have got to know that you feel strongly about it." And I talked to his agency partners and they said that if you showed Steve a campaign or showed him a design for a product, and if he didn't like it, he would throw the papers across the room and make them work all night. Now, I haven't gone that far, but I'm beginning to use certain words a little bit more freely. And I am screaming a bit more. When I say screaming, you know, pounding the table and saying, you know, this is a piece of something, go redo it. Which, you know, was really not the way I was. But it is effective. Because it shows the passion that I have for what I'm doing. The one big lesson I've learned, Doug, is that if you just depend on the traditional strategic planning cycle or depend on standard set of consulting reports, you actually are going to do your company a big disservice. And our CEOs and leaders have to be lifelong students. And not just students in the sense of attending courses or reading a book or two. You've got to learn how to read widely, walk the market, look at trends in the marketplace, make connections that don't seem obvious, and start to paint pictures of what the future could be. And then watch consumer behavior. I'll give you an example. 10 years ago, or maybe 15 years ago, if you came to PepsiCo and looked at all the beverages that were being served on the side tables when we were having meetings, most of the people would be consuming full-sugar beverages. About 10 years ago, the trend shifted. Or maybe 20 years ago, they were drinking full sugar. 10 years ago, they shifted to diet drinks. Okay? About 5 years ago, they were drinking more bottled water. Now, the point that I'd make to my guys is, guys, don't— you don't need to hire a consultant to tell you where the trends are. You just have to look at our side table. Remember the number of facings we used to have for regular sugar Pepsi? Versus Diet Pepsi versus bottled water now. If you're all drinking bottled water or drinking zero-calorie beverages, why do we think we're not representative of the consumer? Very often I think what happens is we separate out the consumer out there from the consumer in us. We are the consumer. And the more we can bring the two together and say we too are representative of the consumer outside, I think it would be better. We go out and, you know, our children play with other children. We see other families, and when they moderate certain products that we sell in terms of what's given to kids, that's a trend. Okay, so we've got to watch all of these things. And too often, I think, us leaders think what consultants tell us or what certain reports say or certain books say is the gospel. It's really not. We have to become our own data collectors, data analyzers, and then shape creators. And I think that's the toughest thing because people who are rewriting the rules have to create the shapes. And people don't like that because they have a traditional model of how things work and they hate people who upset status quo. And I think both of us are upsetting status quo in a big way. And, you know, it's tough. As millennials have come into the workforce in large numbers, their expectations of companies have changed. They no longer look at it as sort of a paycheck, but they look at it as, "How can I go to work and make a difference in society?" So the notion of purpose is becoming a much bigger factor. The big difference is that in the past, purpose used to be some sort of a corporate social responsibility program, and typically those programs were good, people liked them, but they were at the whim or fancy of the CEO who was there. So if the CEO retired, that program got cut. So we had to weave purpose into the core business model of the company. How do you make sure that the sense of purpose can only be accomplished if you make profits? And the only way to make profits is through purpose. And that's why we, you know, use the term performance with purpose, linking both together. And I think that's what's excited millennials in particular and what's excited the boomers to even stay longer in the workforce because they actually feel they're contributing to the future of society as opposed to walking in, picking a paycheck, and leaving. My daughter would say to— my daughters would say to you that what I've always told them and what they've told me is to follow my dreams, follow their dreams. I remember one particular incident, and my daughter Tara is here, so she's going to be embarrassed if I tell you the story. She was at the Convent of the Sacred Heart in Greenwich all her life. She went there when she was 3. She just graduated a few months ago. And in Sacred Heart, I think the third Wednesday of every month, they have a mother's coffee. I think that's a plot against working women, because how can I show up at a mother's coffee on Wednesday morning at 9 o'clock? So I didn't. So Tara would say, Mom, you didn't show up for mother's coffee. The first couple of times I went through guilt. So third time I said, wait, wait, wait, got to come up with some coping mechanism here. So next time she said, Mom, you didn't come for class coffee. I go, yeah, but so-and-so didn't come, so-and-so didn't come, XYZ didn't come. So it was my way of saying, I'm not that bad a mom, you know, they didn't show up too. Which was true, many of them didn't show up. That was good, you outed them, that was nice. No, it's a coping mechanism. We all have to find our own coping mechanisms. So then when she came back home that evening, I said, Tara, you know, you keep saying I don't make you class copies. Would you like me to quit my job and stay home? I asked her this question. And I thought she'd say, yeah, great idea, do that. She looked at me and she said, Mom, are you nuts? You worked so hard to get here. Follow your dreams, Mom. I'll be OK. This was 12-year-old. This is what she said to me. I have never forgotten that answer. I have never forgotten that answer because both my kids said to me, "Mom, follow your dreams. You came to the United States with nothing, $50 in your pocket, and you know, you worked." I worked as a receptionist at Yale from midnight to 5 AM because that paid $3.85 an hour versus $3.35, which was the minimum wage. I wanted that 50 cents more an hour because if I didn't have that, I couldn't buy groceries end of the month. And so that's what I did to put myself through school. And I've told them these stories. They look at all that and they go, "Mom, you've done so much to get here. Follow your dreams." So I tell them always, Willow, follow your dreams. Well, on a relative basis, yes, I've had it all. Okay? On a relative basis, I'm very fortunate to have a wonderful husband, two great kids, a very tight-knit family, and an awesome job with a great team. But, you know, to get here and to stay here, I mean, lots of trade-offs, lots of sacrifices, you know, under the water, a lot of collateral damage, but I think somehow I've had the strength to power through all of that. Can you have it all? That's the big question in this definition. I think if you have the right support system, if you have an understanding spouse, if you want to be married, and if you're willing to make all the trade-offs that you need to make, You can have it all. But while you do all that, there will be heartache, there will be pain, there will be some collateral damage underneath the surface. You've got to live with it. Whatever you do, throw yourself into it. Throw your head, heart, and hands into it. I look at my job not as a job. I look at it as a calling, as a passion. And I don't care about the hours. I don't care about the hardship because to me everything is a joy. So whatever you do, please look upon it as a calling and a passion, not as a job, not as something temporary. I think the CEO of today not only has to have leadership skills and an IQ, there's got to be a healthy dose of EQ, the emotional side. Because millennials today, young people today, want to come to work for a company that cares about them. They want to feel connected to the company. And I think it's critically important that we humanize the CEO. The CEO cannot be this imperialist that's sitting there. Gotta humanize the CEO. We have to remove the barriers between the CEO and the frontline. And that requires a new skill too. So I don't wanna say it's me, but I think a lot of women CEOs actually can do pretty well in today's environment because by nature we are We humanize ourselves a lot more because that's the way we've been brought up. And we listen a lot more, I think. We stop and ask for directions. You know, there's so much we do. And I think that today's world, I mean, there's a new breed of CEOs have come up, men and women, who are doing a very, very nice job. But all of them, I think, are a new breed that's learning that the world is completely different and recognizing that EQ is as important as IQ. That's what I'm trying to focus on as much as I can.

Thank you guys so much for watching. I made this video because Anoushka asked me to. If there's a famous entrepreneur that you would like me to profile next, check out the link in the description and go and cast your vote. I'd also love to know what did you learn from this video that had the biggest impact on you? What lesson are you going to take and immediately apply it somehow in your life or in your business? Leave it in the comments below. I'm really curious to find out. I also want to give a quick shout out to Krishna Kumar. Krishna, thank you so much for picking up a copy of my book, Your One Word, taking that picture of one of the inside pages and posting it online. I'm always curious to know what pages really resonates with people, so thank you so much for sharing that, and I'm really glad that you enjoyed the book. Thank you guys again for watching. I believe in you. I hope you continue to believe in yourself and whatever your one word is. Much love. I'll see you soon.

I would love to know what skills or experiences Indra would suggest as essential for future leaders. Great question. I've always talked about my 5 C's model, and let me talk about them again. The first is competency. I think anybody who wants to be a future leader should have a hip pocket skill that everybody looks at and says XYZ is the go-to person for that skill. Because unless you're really known for something and not just as a generalist, you don't stand out from the pack. But in order to be competent at something, you've got to be a lifelong student because you've got to constantly refine your knowledge of that subject so that you remain ahead and abreast of everything that goes on in that field first. The second, I'd say, is courage and confidence. It's a pair. You can be very, very competent, but if you're not willing to speak out, if you're not willing to have the confidence based on your knowledge, what's the point, right? You just roll over. So courage and confidence are very important. The third is communication skills. You cannot overinvest in communication skills, written and oral communications, because as a leader, you constantly constantly have to mobilize the troops. I can tell you when I first came to the United States, I used to debate and I used to be on debating teams, but I used to speak so fast because culturally I grew up in an environment where people spoke very fast. Fortunately, Yale had a requirement that unless you passed the communications course, you couldn't graduate from the first year to the second year in business school. I flunked the first time I took the communications course. So over summer I took it again, which was the best thing that happened because I learned to sync my brain with my, my output from my mouth. And so I started to slow down what I was saying. Huge difference. So I encourage all of you, invest in communication skills, critically important. The fourth skill I'd say is consistency. It's important that leaders are consistent consistent. You can change your mind, but change your mind against a consistent framework, because if you're not consistent, people are always second-guessing what you're doing. So be consistent. And the last skill is your compass. Integrity is critical in this job. You can be competent, you can be courageous, have confidence, be a great communicator, be consistent, but if you don't have integrity, compass doesn't point true north, everything comes crashing down, as we've seen in recent times. So again, it's the 5C model, and that's what I've operated against for all my life. So let me give you the one word secret to happiness. One word. This is all you need to be happy. The most important word ever. If you had to think of one word that's most important to you, or that sums you up, or that would be kind of like a little beacon?

Hey, Believe Nation! If you want to know what the most important one word is for Tony Robbins, Gary Vaynerchuk, Oprah Winfrey, will.i.am, and Howard Schultz, I have a very special secret video for you. Check the description for details.