Her Formula for Success
Leadership can emerge from the most unlikely of places.

Her Formula for Success
Leadership can emerge from the most unlikely of places. Born, raised, and educated in Chennai India, Indra Nooyi immigrated to the United States to earn her second master’s degree at Yale University. After graduation she worked six years for the Boston Consulting Group, and then moved directly into corporate working both at Motorola and ABB. She became a strategist at PepsiCo in 1994 and quickly climbed the ranks to become CFO and president in 2001. She has been credited with the restructuring of the company, which included the company’s spin-off of its restaurants—KFC, Pizza Hut, and Taco Bell—into Tricon Global Restaurants (which later became Yum! Brands, Inc.), as well as the spin-off of PepsiCo’s bottling operations. In addition, she oversaw the acquisition (1998) of Tropicana Products and the Quaker Oats Co. (2001) as part of the company’s strategy of diversifying into more healthful drinks and foods. She became CEO in 2006 and chair of the board in 2007. She served as CEO until 2018 and then stepped down as chair of the board in 2019, but not after nearly doubling Pepsi’s revenues to nearly $64 billion.128
Nooyi was the first woman to lead the soft drink and snack food giant and one of only 11 female chief executives of Fortune 500 companies. So what does she attribute her success to? For Nooyi “Leadership is hard to define and good leadership even harder. But if you can get people to follow you to the ends of the earth, you are a great leader.”129 Nooyi has no magic bullet, but she does subscribe her success to the Five Cs of leadership.
1. Competence.Nooyi has a bachelor’s degree in chemistry and two master’s degrees in business, yet she subscribes to continuous learning and incessant improvement. In a technologically driven society one has to “run in place” just to keep up with one’s profession; that is what true mastery of a field requires. “Just because you are CEO, don’t think you have landed. You must continually increase your learning, the way you think, and the way you approach the organization. I’ve never forgotten that.”130
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2. Courage/Confidence.Have the strength of your convictions and understand that decisive decision-making is a must if your employees are going to trust your judgment. Associates respect leaders who speak their minds and who are not afraid to be definitive.
3. Communication.This includes not only being able to communicate one on one or with a team of coworkers but also being able to communicate with the entire organization. This should include not only clear and concise messages that reduce task uncertainty but also inspiring communications that motivate and impassion employees. Employees need to “feel and hear” your vision for the firm and what role they play in fulfilling that dream.
4. Consistency.Ambiguity and uncertainty are the death knell for any major firm, so having a consistent message and predictable methods for conducting business will ensure that all employees are working in harmony. Unreliable and unpredictable changes in strategy and policy create distrust and sow the seeds of poor performance and reduce “second-guessing” management.
5. Moral Compass.Knowing your values, being upfront about them, and sticking to them are the cornerstone for building a successful organization. Honesty is not only the best policy but the only policy that will lead to success since employees will not follow someone whose moral character is in question. Integrity and strength of character are integral to living a quality of life both personally and professionally.131 “To be a CEO is a calling. You should not do it because it is a job: It is a calling. And you must be involved in it with your head, heart, and hands. Your heart has to be in the job; you must love what you do, so that it consumes you. And if you are not willing to get into the CEO job that way, there is no point getting into it.”132
Nooyi sums up her leadership style by saying, “As a leader, I am tough on myself and I raise the standard for everybody; however, I am very caring because I want people to excel at what they are doing so that they can aspire to be me in the future.”133
Go to the Internet: To learn more about Indra Nooyi and the Five Cs of leadership, go to www.youtube.com/watch?v=u0DMaydBOxk.
Support your answers to the following questions with specific information from the case and text or with other information you get from the Web or other sources:
1. What traits does Indra Nooyi exhibit that would indicate she is an effective leader?
2. How would you rate Indra Nooyi using the Blake-Mouton grid?
3. What in the case and/or video might lead you to support the claim that Indra Nooyi is a transformational leader?
4. Using Fielder’s contingency leadership theory, describe what style of leadership Nooyi might have used when restructuring and diversifying PepsiCo. Explain your answer.
5. Assuming that PepsiCo’s employees had a high maturity level during the restructuring, what situational leadership style (using Hersey and Blanchard) should Nooyi use? Explain your answer.
6. What factors in Nooyi’s Five C model facilitate employee trust?
BOOK: Human Relations in Organizations: Applications and Skill Building
Robert N. Lussier
PAGE URL: https://devry.vitalsource.com/reader/books/9781264069286/epubcfi/6/28%5B%3Bvnd.vst.idref%3Dchapter06%5D!/4/2/8/34/14/3:27%5Bein%2Cg%20a%5D
CITATION: Lussier, R. N. (2021). Human Relations in Organizations: Applications and Skill Building (12th ed.). McGraw-Hill Higher Education (US). https://devry.vitalsource.com/books/9781264069286