Hi everybody indira nui is one of the most inspirational business leaders in the world and it is so hard to believe that a girl with no extraordinary background went from being an ordinary girl from south india to becoming the chief executive officer of the largest beverage company in the world which we all know today as pepsi.
And this is a very very big deal because we are talking about a time in industry that was so male dominated that every single one of the top 15 positions was held by a man in 1994 even the most accomplished woman was stuck at middle management and guess what the number of female ceos among the 500.
Biggest companies was practically zero but even then this incredible woman did not just break through these walls and became the chief executive officer of pepsico but also took the company to such great heights that under her tenure pepsico saw its revenue grow by more than 80 percent and added a new billion dollar brand almost every other year.
On top of that the company also gave back 79.4 billion dollars to its shareholders in the form of dividends and share repurchases which is why in this women's day special episode let's try to understand what exactly was so special about mrs indira nui how did she beat all the odds to become one of the most powerful women in the world and.
Most importantly what are the business lessons that we need to learn from this incredible woman this video is brought to you by west hit but more on this at the end of the video this is a story that dates back to march 1994 when mrs indranoi walked into pepsico during this time pepsico was a three-legged stool the first leg was.
Beverages which included pepsi cola diet pepsi and mountain dew with an annual revenue of 9 billion dollars the second leg was snacks which included lace doritos cheetos with an annual revenue of seven billion dollars and the third leg was that of restaurants like pizza hut taco bell and kfc with an annual revenue of nine billion dollars but when.
Mrs newey came in she observed that the third leg began to shake and the problem was with the basic organization structure that is these brands that is pizza hut taco bell and kfc operated as three individual companies and in a way they started cannibalizing each other's businesses each of these companies had their own individual revenue targets and.
In the race of meeting these targets there were three problems that emerged number one if there was a prime location that was available to set up a restaurant taco bell and pizza started competing for that space if there was a job fair all these three brands had their own recruitment team they were recruiting for the same pool of.
Candidates and after a certain point they started fighting for the same candidates and lastly pepsico often used the restaurant business as a testing ground for talent so if you came into the restaurant wing and you did well pepsico used to take you in so in a way great talent was being sucked out by pepsico and talent retention in the.
Restaurant space became a very big problem so you know what guys due to the advice of mrs indira nui the ceo of pepsico decided to spin off all these three brands that is kfc pizza hut and taco bell into a different entity called tricon global restaurants as a result of a spin out of the fast food division of pepsico and mind you mrs indira did not.
Propose this merely by looking at the balance sheet or through some fancy analysis she literally went on ground and spent three days to visit across atlanta chicago and washington and in this trip the then ceo and mrs newey stopped at every quick service restaurant to eat something or the other and during this entire process they.
Maintained a scorecard and ranked each restaurant on multiple criteria like order time wait time food temperature and cleanliness and only after looking at both the micro and macro parameters ditches suggest the spin-off so finally in 1997 pepsico elected to spin off its pizza hut kfc and talkable restaurants for 4.5 billion dollars.
And eventually the company uses money to slash its 8.5 billion dollar debt by more than 50 percent this gave pepsico very very good financial flexibility to invest in further business development this is how through critical micro and macro analysis mrs indira relieved pepsico of a huge burden that was.
Crumbling the organization because of bad structure and this brings me to the second and perhaps the most important contribution of mrs nui and that was defining a purpose for pepsico because this is what the dark side of softing industry looks like it's a shocking truth 60 pounds that's how much sugar american.
Adults consume each year that was me just over a year and 105 pounds ago now if i can lose weight anyone can now if you look at it from the business standpoint you obviously cannot abandon your best-selling product but being such a giant organization what you can do is start pivoting the.
Alternatives to transition without actually going bankrupt which is why in 2010 mrs newey declared that pepsi needed to be a part of the solution to one of the biggest public health challenges and that is obesity so all pepsico products were classified into three discrete segment the first segment was the fun for you segment which.
Included products such as potato chips and regular soda the second segment was better for you segment which were diet or low fat versions of snacks and fizzy drinks and then we had the good for you segment wherein there were products like quaker oats meal so under her direction pepsi started decreasing its portions in the fun-for-you products and started.
Increasing its focus on the good for you products and this classification made it so clear to the organization that they were able to fix some of the most fundamental marketing messages of their products for example the marketing campaign of diet products were not promoted as aspirationally as its full sugar equivalents so they redefined the.
Message to push the products that are good for the world instead of just the sugared products similarly another major marketing glitch was that gatorade which was an energy drink was marketed as an everyday recreational beverage and for those who are involved in fitness and nutrition you would know that having a gatorade without working out is nothing.
Short of a disaster for your health and this marketing was done because obviously the customer base of regular soft drinkers was way bigger than the athletes but under the kindness of mrs indira nui it was made sure that the advertisement be strictly for athletes and never be presented as an everyday recreational.
Beverage now had it being some ordinary ceo they would have never done that why because by default when you shrink your customer base your profits are going to shrink but mrs newey was no alternate ceo she did not just want pepsico to be a giant company she wanted it to be a good company this was the power of instilling a purpose within the.
Organization and striking a balance between capitalism and consciousness and this brings me to the third and my personal favorite contribution of mrs newey and that was to incorporate something called design thinking in pepsi for those who don't know design thinking is one of the most important skills of the 21st century that teaches.
You how to empathize the set of audience and eventually it gives you some game changing market insights to help you build great products in this case mrs newey realized that there was a very very big flaw in the way pepsi was marketing its products for women because these marketers often followed something called a shrink kit.
Or pinkett approach what this means is that if marketers wanted to sell something to women they would just take the same products that were made for men and shrink it as in make it smaller or pink it as in make it pink so if they wanted to sell doritos they would just put it in a ping bag and say that it's for women but this is where mrs newey.
Got in design thinking experts to teach their executives design thinking and empathy skills so that the executives could actually look beyond shrinkage and think it and within no time the executors of pepsi realize that there's a lot more to how women like to snack so when they actually started to conduct these exercises they were able to know.
Those intricacies of women behavior with snacks that were completely overlooked by conventional designers for example they observed that when men finished their snacks they would just pour all their leftovers in their mouth but women were very less likely to do that why because they often worried about how much the product may stain if it fell on.
Their dress and they wouldn't even rub it on the chair which a lot of guys were more likely to do similarly they noted that women in public places were more conscious while snacking as compared to men so they introduced a stacked up chip that comes in a plastic tray so if a woman wants to.
Snag she could just open the drawer ate a snack and then just push it back in and they even made the chips crunch less noisy because they found out that a lot of women did not want people to hear them crunching away this is how mrs noey inculcated the skill of design thinking in pepsico so that they could build products based on.
Empathy and not stereotypes and needless to say design thinking is now an essential element in the product philosophy of pepsico these were some of the most important contributions made by mrs indira nui that redefined the way pepsico functioned as an organization apart from that under her pepsico.
Aggressively expanded into international territories because of which by 2017 nearly 21 of pepsico's revenue came from asia north africa middle east and latin america in 2015 the company slashed the overall water use in its operation by about 3.2 billion liters in a drive towards improving water conservation and in doing so they also ended up saving 80.
Million dollars in production costs this is how mrs nui's innovative ideas and overall success got her flutter with awards and recognition from all across the world every year between 2007 to 2014 forbes listed her in its world's hundred most powerful women she was named number one on fortune's annual ranking of the most powerful woman in.
Business from 2006 to 2010 and in 2008 the u.s news and world report itself named mrs newey as one of the best leaders america had and finally in 2018 mrs newey announced that she would be stepping down as the ceo of pepsico ending her iconic career with the company and this brings me to the most important.
Part of the episode and that are the lessons to learn from the legendary indira nui before we move on i want to quickly tell you about western people wouldn't it be great if you could invest in the growth stories of companies like pepsi amazon google netflix and other us companies well this is where vested comes in west.
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Additional 10 bonus moving on the first lesson that we need to learn from mrs indira nui is that while good leaders right away focus on expansion and in creating new assets for the company great leaders first cut down the assets that are liabilities in disguise in this case mrs nui cut down the weight of pizza hut kfc and taco.
Bell so that pepsico could focus on its core business rather than bear the burden of the non-core business in fact even when steve jobs came to apple in 1997 this was the first thing that he did lesson number two even if you're selling soft drinks instilling a sense of purpose within the organization can give you invaluable benefits now on the.
Outside it might look like some useless philosophy to you but if you look closely all the billion dollar acquisitions made by pepsico including quaker oats were actually guided by this purpose of good for your products that mrs newey established in pepsico and lastly design thinking is one of the most important skills of the 21st.
Century that could change the way you design products and can give you some game changing results within no time in this case we saw how design thinking gave rise to new products by pepsico merely because of conducting empathy exercises with women so do look into it and for reference please read this book called change by design by tim brown and.
Before we say goodbye i just want to wish each girl and woman watching this episode of very very happy women's day that's all from my side to today guys if you learned something valuable please make sure to hit the like button in order to make youtube baba happy and for more such insightful business and political case studies please subscribe.
To our channel thank you so much for watching i will see you in the next one bye bye