PepsiCo Leadership Style: Indra Nooyi Leadership Style Research Paper

Indra Nooyi Leadership Style: Level 5 Leader

PepsiCo Inc. is an organization that was created more than half a decade ago, but its origin can be traced back to 1898. It produces food and snacks but is mainly known to the representatives of the general public as a beverage corporation. Its headquarters can be found in New York, USA, but the company serves the whole world. For ten years already, Indra Krishnamurthy Nooyi is one of the key people in this organization. She is the chief executive officer (CEO) whose enormous positive influence on the PepsiCo’s success is undeniable.

Indra Nooyi was born in India in 1955, and later she moved to the USA. She joined the company in 1994 and worked in it for twenty-two years before she received an opportunity to obtain her current position and become a chairperson. Such experience provided her with the opportunity to get to know how the organization works from the inside, how its workers cope with their duties, what they value and want to reach, which is critical for every successful leader. As the CEO studied at Yale School of Management, she learned a lot of information on how to work with diverse personnel and become a leader who is supported by her team. As a result, she entered the lists of the most influential and powerful people several times.

According to the leader hierarchy developed by Collins (2011), Indra Nooyi is level 5 leader. She does her best to combine personal humility and professional will. She is rather charismatic, which provides her with the opportunity to transform PepsiCo from a good to great company. She focuses on people and only then refers to the organizational strategy. Indra Nooyi determines short- and long-term goals that must be achieved by the personnel. She encourages people to keep working for the company, but is not that focused on moving the wrong employees off. She encourages the staff to provide clear information to realize if something is wrong in the company, but also wants the staff to always feel optimistic about the future. Thus, she reveals a Stockdale paradox.

The CEO realizes that good-to-great transformations require much time and effort, so she does not make snap decisions. She constantly uses technology to interact with employees and customers, to receive their feedback, to gather information and create new products. Using different leadership approaches, Indra Nooyi develops a culture of discipline that combines different forms but emphasizes disciplines action, which allows the staff to avoid excessive control. She is rather modest and usually speaks about the whole organization but also reveals her personal achievements in some interviews. The CEO does not believe that being good is enough and she emphasizes the necessity of constant improvement. She wants PepsiCo to become extremely successful and does her best for this purpose. Looking in the mirror, she reconsiders her actions and always takes responsibility for them.

Indra Nooyi also successfully utilizes the hedgehog concept, which presupposes the focus on one concrete thing. She believes that she is the best when she is a ‘mother’: a person who cares about others, revealing humanism. She is deeply passionate about making the world better for the people. Her economic engine is driven by the provision of those products that are required by the targeted market. However, it cannot be denied that Indra Nooyi is “foxy” because she tries to unite her work and personal life. She is always ready to reconsider the situation and change it if having enough ground for doing so. She believes that interaction between employees with the diverse background can lead to constant change and innovation that ensure competitive advantage (Lockhart, 2015).

PepsiCo Leadership Style: Rise to Business Prominence

Indra Nooyi does her best to ensure that the company and more than twenty brands that exist in its framework improve their performance with the course of time and develop continuously. She is focused on the performance with purpose, which means that she encourages the personnel to meet the goals of the organization when maintaining their tasks (PepsiCo, 2016a). The organization considers such approach to be critical for reaching competitive advantage and remaining on the stable position regardless of the global competition.

The company focuses on its people, including both clients and personnel. Trying to reach sustainable growth, it invests in its workers, providing them with the opportunity to affect society and the environment positively. Realizing this, Indra Nooyi encourages her team to be clear, honest and accurate. She emphasizes the necessity to be transparent and present understandable communications. Following the purpose of PepsiCo and its values, the CEO gives prominence to the fact that it is critical for the organization to achieve mutual success through both individual excellence and collaboration (PepsiCo, 2016b).

Indra Nooyi ensures the long-term sustainable performance of PepsiCo with her leadership approach that is focused on collaboration and is considered to be extremely significant for the whole company. Trying to meet business needs, she focuses on “building the next generation of capabilities and talent” (PepsiCo, 2015, p. 42). In this way, the CEO makes sure that the workforce of the organization consists of people with diverse backgrounds because only in this way PepsiCo can streamline innovation and meet the needs of different markets. What is more, she pays much attention to the development of workers’ functional and technical skills, without which it would be impossible to ensure appropriate performance. Allowing individuals with various traits and ways of thinking to cooperate, Indra Nooyi meets organizational needs and increases the possibility to reach appropriate solutions rather quickly. In addition to that, the CEO tries to ensure that individual goals of the workers and those of PepsiCo coincide to reduce issues within the company.

A great example of the way Indra Nooyi utilized her leadership skills to improve business prominence is her strategy of making PepsiCo design-driven. Referring to her needs as a consumer, she defined what change is needed by the organization. Then she addressed her direct reports with a creative task for redesigning which met their individual interests and increased collaboration. She received feedback and interacted with a team, which made them closer (Ignatius, 2015).

Indra Nooyi Leadership Style and Managerial Approach

In one of her interviews, Indra Nooyi said that leadership for her “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” (Neck, Houghton, & Murray, 2015, p.11). Considering the success she was able to achieve already, it can be claimed that the CEO is one of such people.

Her personal traits allow her to be a great leader undoubtfully. The CEO is a competent extrovert. She easily communicates with other people referring to the knowledge and skills needed to achieve success in the sphere. Indra Nooyi pays enormous attention to her followers and tends to ensure that they receive everything needed. In the framework of relation management, she developed blogs that are used by the personnel. With their help, the CEO enhances interaction among them and develops trust-based relations, which allows her to motivate employees to work hard. Trying to appeal to them emotionally, and create an image of a family within PepsiCo, she contacts personnel’s parents through letters to reveal her gratitude for their talented children.

In addition to that, she interacts with company’s customers, which makes them feel valued and improves loyalty. Emphasizing integrity and being honest with her team, Indra Nooyi also paid much attention to their livelihood. She ensures that everyone can benefit from provided packages, including pensioners. Indra Nooyi leads her team by personal example, which is considered to be one of the greatest leadership approaches by many scientists, including Greenberg (2013). She is always ready to take responsibility for her decisions and actions, which prevents the occurrence of issues among the personnel. What is more, she educates herself continuously to be able to reconsider the situation and make the most advantageous for the company decision. Strong emotional attachment to PepsiCo makes Indra Nooyi treat the company and its people as those people who are close to her and who depend on her. She realizes the necessity of accountability and accepts it but also expects personnel’s feedback.

All in all, Indra Nooyi tends to have a situational leadership style, which proves her to be a flexible person able to adapt to the environment and improve it. In this way, the CEO utilizes four major leadership styles, selecting the one that fits the situation the best. Such approach is highly valued by all professionals who discuss leadership and its influence because it provides the opportunity to act appropriately always (Schermerhorn, 2010). It strengthens good relations with the personnel, allows positive transformations, and presupposes the usage of personal example for raising standards, which makes employees more willing to change and develop.

As a democratic leader, Indra Nooyi interacts with those qualified teams that are able to make sufficient decisions on their own and take responsibility for them along with the CEO. In this framework, she listens to employee’s ideas but evaluates them and makes the final decision. She considers the needs of her employees and encourages them to speak up.

As a charismatic leader, Indra Nooyi tries to make her workers feel comfortable and valued as if they are a part of a big family. She takes care of the personnel, keeps contact with them and their families, invests in communication to ensure that different ways of interaction are available and all people can engage without misunderstandings. She makes her business up-to-date to ensure that the staff members are inspired and encouraged to move forward.

PepsiCo Leadership Style: Successes and Failures

Following the values of the organization, Indra Nooyi pays much attention to personnel collaboration. Since she became a CEO, she improved the understanding of the business direction among the employees, enhanced their satisfaction, made working conditions better and decreased employee turnover, which had the positive influence on the overall performance. However, it seems that the orientation on the workers represented by Indra Nooyi is excessive. Focusing on people, she pays less attention to the profit management, which is critical for the business.

Of course, she supports research and development greatly, proving her emphasis on innovation. During the last 5 years, the funds allocated to this department increased by 25% (Fortune, 2015). In this framework, Indra Nooyi tries to meet the needs of the diverse targeted market and achieves success. Her new products enter the lists of bestselling items in the industry and enhance company’s revenue greatly, which provides it with the opportunity to improve its position. However, as a mother, she does not forbid family phone calls during the working hours and meetings, which appeals to the staff members but prevents them from reaching their potential and achieving maximum revenue. In a similar way, she does not really separate her personal life and work, allowing them to interfere and affect each other, which has some advantages but mainly leads to an inability to reach greater goals.

It can be concluded that Indra Nooyi’s leadership style is not ideal, but it is rather advantageous when working in the environment that requires constant changes and creative ideas. In my quest to improve my managerial leadership skills, I noticed that the CEO values her workers greatly and focuses on them and only then on the organization. I believe that such approach can help me to become a great leader if I find a balance and do not reveal this trait excessively. I also value the fact that Indra Nooyi conducts research before implementing a change but consider that decision-making takes her too much time. Still, I cannot but admire her flexibility and readiness to accept alterations. What is more, her focus on communication and collaboration seems to ensure a half of achieved success. In addition to that, I cannot but admit that she successfully uses her personal interests for organizational purposes, such as a focus on maternity and sensibility.

References

Collins, J. (2011). Good to great: Why some companies make the leap… and others don’t. New York, NY: Harper Collins.

Fortune. (2015). The most powerful women in business. Web.

Greenberg, J. (2011). Organizational behavior: The state of the science. Hillsdale, NJ: Routledge.

Ignatius, A. (2015).How Indra Nooyi turned design thinking into strategy: An interview with PepsiCo’s CEO. Web.

Neck, C., Houghton, ‎J., & Murray, E. (2015). Organizational behavior: A critical-thinking approach. Thousand Oaks, CA: SAGE.

Lockhart, L. (2015). Advertising agencies & clients: The fox or the hedgehog?Web.

PepsiCo. (2016a). PepsiCo’s strength is its people. Web.

PepsiCo. (2016b). What we believe. Web.

PepsiCo. (2015).Annual report: Performance with purpose. Web.

Schermerhorn, J. (2010). Management. Hoboken, NJ: John Wiley & Sons.