Below, we’re sharing an excerpt of an amplifier profile from Clarkston CEO Tom Finegan’s new book – Amplifiers: How Great Leaders Magnify the Power of Teams, Increase the Impact of Organization and Turn Up the Volume on Positive Change. To learn more about Amplifiers, order the book, or download the full bonus chapter, click here.
Interacting with Amplifiers
One of the most rewarding aspects of my job is to interact with successful CEOs and senior leadership teams of some of the best companies in the world. I love to study their habits, strengths, weaknesses, and watch how they interact with their senior teams and business partners. Being a student of leadership and followership over the years has helped me identify certain characteristics that great leaders possess.
Although I’ve had the privilege of working closely with some extraordinary leaders and Amplifiers of major companies, there are some that I admire from a distance, as I’ve had little or no direct exposure. In other cases, we work for similar companies and gather insights on strategy, competitive positioning, culture, leadership analysis, etc. However due to the nature of the companies they are leading, some of these leaders have had broad exposure in public or semi-public forums. Indra Nooyi is one of the Amplifiers whose track record separates her from her peers. We analyzed the vast amount of public information to give us insight into her style, motives, and traits that led her to becoming one of the great Amplifiers of our time.
An Amplifier Profile: Indra Nooyi
Nooyi had a long career prior to joining PepsiCo. She graduated in 1974 with a bachelor’s degree in physics, chemistry and mathematics from the University of Madras and, in 1976, earned a postgraduate diploma from the Indian Institute of Management Calcutta. In 1980, she came to the US and earned a Master’s Degree in Public and Private Management from the Yale School of Management. Her professional career began with various product manager roles. She then joined Boston Consulting Group for a six-year career where she served as an international corporate strategist.
Indra Nooyi was named CEO of PepsiCo in 2006 at a time when she was relatively unknown to the public. Although she had been at the company for over a decade and held various leadership positions, she had a relatively low public profile. Because of her 12-year run as CEO of PepsiCo, she will go down as one of the best CEOs for a large global company. History will look favorably upon her tenure across five key criteria. First, the company’s financial and shareholder performance was outstanding under her watch. Second, she left behind a winning strategy for the next generation of management as her legacy. Third, she helped build and nurture a unique culture that endures. Fourth, Nooyi is a true Amplifier, possessing that special blend of leadership intertwined with followership to be heralded as an example for CEOs facing activism. And finally, she is an amazing role model for countless emerging Amplifiers, especially female professionals.
Performance and Culture of Excellence
Let’s face it, all CEOs are measured by a common yardstick so let’s start with the numbers. PepsiCo performed well operationally under Nooyi’s tenure. Revenue almost doubled from $33 billion to over $60 billion during her 12-year tenure. Operating profit also rose from just over $6 billion to $10 billion. The stock price performed well, rising from a low of $60/share to about $110/share, resulting in total shareholder returns of about 78%. That said, it is important to note that during the same time horizon, Pepsi’s share price was outperformed by the share price of its rival, Coca-Cola. As a result, Nooyi faced activist shareholder campaigns against her strategy and the company during her tenure.
On other financial and market share metrics, PepsiCo performed well. The company grew its product portfolio, optimized portfolio positioning, and improved margins. What strikes me as the most important element of her financial performance is that she was able to deliver extremely strong financial results while taking an affirmative stand and leading the junk food industry into “better for you” food. This strategy took guts, and to deliver strong financial results in the midst of such a strategic shift is a remarkable feat.
Nooyi’s legacy will be defined by her overarching strategy, which she called “Performance with ”. This vision was an initiative to drive long-term growth while leaving a positive imprint on society and the environment. Nooyi was concerned with public health and the planet. Her vision was to make PepsiCo one of the best companies in the 21st century. She recognized that the company does not become a defining icon simply by delivering solid financial results. Defining legacies need to deliver more. To that end, Nooyi was committed to removing sugar from her beverage portfolio and bringing “better for you” snacks to the market.
Nooyi was an early adopter and helped set the tone for the changing consumer attitudes of wanting healthier food and a sustainable planet. Changing course for a company the size of PepsiCo was an enormous challenge but a challenge that Nooyi not only embraced but achieved.
Nooyi was heavily focused on making PepsiCo a better place to work rather than producing strong quarterly results. She wanted to create healthier snacks and beverages, as she noticed consumer preferences changing before other consumer products executives did. She also wanted employees to come to a job where they felt they were truly making an impact in the world. She incorporated elements of her own career in order to help PepsiCo be a better place for all employees, especially women of color in the workplace. Nooyi’s style left a positive imprint on the culture at PepsiCo. She was smart, dedicated, hard-working, caring yet demanding, inclusive, and interested in giving back more than taking. These beliefs and character traits were demonstrated in her actions as a leader.
Nooyi recognized that employees are individual beings who have diverse backgrounds and unique personal circumstances that may impact their work performance. She also recognized that the organization needed to assimilate them into the entire ecosystem. Employees needed to bring their whole selves to work and in order to do that the organization needed to accommodate the whole person. She believed that if PepsiCo could help alleviate some of the issues or stress its employees have at home, it would yield positive results at work.
There are three categories of CEOs that ascend to the top spot. There are the lifers that have been with the company for decades, in some cases growing out of the shop floor or the mailroom, gaining increasing levels of responsibility, until ultimately being named CEO. On the other end of the spectrum are the CEOs who were brought in from the outside. The third category are the individuals who have had experience with several outside companies and then some tenure within the company prior to being named CEO. This third category describes Nooyi’s ascension to the top spot at PepsiCo. Nooyi would not be described as an outgoing, gregarious, or charismatic leader prior to being named as CEO at PepsiCo. However, being one of the few women and especially a woman of color, she was immediately launched into the spotlight on the main stage of Fortune 500 CEOs.
She would face numerous critics in her role as CEO. Her vision for PepsiCo was not entirely popular with certain groups of shareholders and she needed to have courage to see her convictions through. She embraced these skeptics by listening to them to gain additional know-how. This measured, fact-finding approach in decision making ensured that she had thoroughly considered all viable options and that she made solid decisions with diverse input, even from her naysayers. It also ensured that she was prepared to explain her decisions in great detail.
Nooyi grew up in a conservative home in India. This upbringing played a key role in shaping her beliefs and how she interacted as a follower, then as a leader, and ultimately as an Amplifier. Before his passing, Nooyi had the opportunity to meet with Steve. He had a strong influence on her approach to leadership and her strategy at PepsiCo. When thinking about her leadership style, he encouraged her not to be “too nice.” Jobs impressed upon her that it was good, not bad, to lose her temper and throw things in certain professional settings when the circumstances required. He emphasized that doing so would demonstrate her passion about the topic and get others’ attention. Nooyi confessed that approach might be too much for her, but she did admit to occasionally pounding on the table and demanding better when it was the right thing to do.
The other lesson Jobs offered Nooyi was to better incorporate design excellence into the total lifecycle of the PepsiCo products. He encouraged design excellence in everything from product creation, to the product’s look on the shelf, to how consumers interact with the product after they buy it. For many consumer products executives, product design only encompassed the color or formatting on a package, and many did not consider the entire consumer experience. This approach helped Nooyi think like the consumer. She made it a priority to visit grocery stores on a weekly basis so that she could see how PepsiCo products looked on the shelves. She met with marketing to understand why one product was displayed differently than another product.
Amplifiers is out now! To learn more about Amplifiers, order the book, or download the full bonus chapter, visit the Amplifiers site. You can order your copy of Amplifiers through Amazon, Barnes and Noble, Books A Million, or Bookshop. Also, you can read Tom’s story of why he wrote Amplifiers here.
Subscribe to Clarkston's Insights