MANAGEMENT MOVES
TAKING THE PEPSI CHALLENGE
By Jennifer Lee

By any reckoning it is a public-relations nightmare – abnormally high levels of pesticides reportedly found in Pepsi and Coke across India by New Delhi-based non-governmental organization Centre for Science and Environment (CSE). The accusations have caused around a quarter of India’s 28 states to limit or ban outright sales of the soft drinks. Although the research has been labeled as flawed by the national government, and some accuse the CSE of targeting the cola giants because they are foreign or possibly to draw attention to the levels of water contamination across India in general, Pepsi and Coke have remained stoic rather than coming out fighting – a response that Indian consumers are taking as admission of guilt.

Pepsi’s restrained handling of the situation could change with the appointment of Pepsi’s new CEO on October 1. Known for her outspokenness, she is Pepsi’s first female CEO, promoted from the post of CFO, which she held since 2001. Alone that would be remarkable, but the new CEO is a sari-wearing American citizen who grew up in the Indian state of Chennai, formerly Madras. She is the first ethnic Indian woman handed the reins at a Fortune 100 company.

Indra Krishnamurthy Nooyi studied at Madras Christian College and the Indian Institute of Management in Calcutta before eventually heading to the US to attend the Yale School of Management. After graduating, she worked for Boston Consulting Group for six years before joining Motorola and ABB, respectively, in senior management positions. She joined Pepsi in 1994 as senior vice-president of strategic planning. Among her most notable moves at Pepsi: She was a key player in Pepsi’s 1998 spin-off of Pizza Hut, Kentucky Fried Chicken, and Taco Bell, and she was instrumental in the company’s strategy of buying into healthy brands such as Aquafina, Tropicana, and Quaker Oats – acquisitions that are now paying off.

Indeed, analysts see Nooyi as being able to handle the challenges Pepsi faces, which recently include pressure from advocacy groups to stop soft-drink sales in schools in the US, the result of concern over childhood obesity rates. Her management mantra, she said in an interview with The Times of India, includes five Cs: competence, confidence, compass (meaning integrity); and being the company’s conscience. The fifth C is for communication. Nooyi may find communication the key to resolving Pepsi’s pesticide kerfuffle in India.