Indra Nooyi, PepsiCo Chairman and CEO & Doug McMillon, Walmart President and CEO
Stanford Graduate School of Business2016-05-20
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1M views|8 years ago
💫 Short Summary
The video delves into the importance of adapting to rapid changes in consumer behavior and industry trends, focusing on PepsiCo's transformation under CEO Indra Nooyi's leadership. It emphasizes the need for CEOs to stay connected to consumer preferences, embrace design thinking, and drive innovation for sustainability. The discussion extends to the challenges of maintaining relevance in a shifting market landscape and the significance of values, legacy, and competition in business. Additionally, the video touches on the potential for growth in the African market and the necessity of flexibility and adaptability in career choices for long-term success.
✨ Highlights
📊 Transcript
✦
Discussion on leadership qualities with Indra Nooyi highlighted.
01:22Nooyi described as visionary, competitive, tough-minded, and caring.
Need for companies like PepsiCo to adapt to changing world and consumer behaviors.
Emphasis on importance of change and positioning PepsiCo for the future under Nooyi's leadership.
✦
CEOs facing rapid changes in business environment.
03:12Shifts in consumer preferences and labeling standards in food and beverage industry.
Lack of established traceability and safety standards in globalized supply chains.
Evolution of retail landscape with rise of e-commerce and discounters.
Continuous need for companies to alter business models to stay competitive amidst economic and political turmoil.
✦
Challenges of Managing Change in Companies
09:08CEOs need to adapt to rapid shifts in consumer behavior by staying informed on market trends and making strategic connections.
It is crucial for CEOs to paint a clear vision of the future and understand consumer behavior.
An example is provided of how consumer preferences shifted from full sugar to diet drinks over time.
CEOs must be proactive in shaping the future of their companies based on evolving consumer demands.
✦
Importance of staying connected to consumer trends through observing behaviors.
10:57Leaders should collect and analyze their own data to shape strategies effectively.
Speaker shares experience of personally visiting stores to understand consumer perspectives and challenges.
Emphasis on being present in the moment and continuously working on staying objective.
Transition from relying on emailed photos to personally engaging with the market for better understanding.
✦
Importance of design thinking at PepsiCo.
14:16Executives captured design elements, showing lack of understanding.
Design engages consumers through product presentation and overall experience.
Emphasis on deeper understanding of design beyond superficial changes.
Executives receiving design education for enhanced consumer engagement and product appeal.
✦
Overview of Design Thinking in Product Development with Doritos as an Example.
16:35Packaging design for Doritos is used as an example to demonstrate how it can be improved to cater to various consumer behaviors.
PepsiCo introduces new spire machines that offer a range of product variants in an aesthetically pleasing manner.
Design has a significant impact on day-to-day experiences and PepsiCo's design experiences at Milan Design Week were successful.
PepsiCo's emphasis on design reflects their dedication to innovation and consumer engagement.
✦
Evolution of Pepsi as a brand and its impact on culture, sports, and music.
21:48Iconic figures like Michael Jackson and Madonna were Pepsi stars, highlighting the brand's influence in popular culture.
Emphasis on maintaining relevance and adapting to changing consumer preferences to ensure continued success.
Challenges of maintaining brand excitement and creating new beverage offerings to combat category decline are discussed.
Focus on aligning the product with the brand image and ensuring continued cultural significance.
✦
Transforming older and larger companies to be more entrepreneurial and responsive to disruption.
23:18Emphasizing the importance of maintaining humanity, culture, and people alongside technological advancements for company transformation.
Balancing preserving company heritage with making necessary changes, without spending excessive time appeasing long-tenured employees.
Actively shaping company culture and making decisive changes to avoid being held back by nostalgia for the past.
✦
Embracing change and the role of communication in large companies.
26:54The power of social media for conveying messages and engaging with people.
Risks and benefits of social media, especially for CEOs.
Acknowledgment of generational gap in attitudes towards social media.
Discussion of the management style of Walmart's CEO in a small town.
✦
Importance of staying grounded and not being too comfortable in a small, insulated community.
31:02Emphasize the need to see markets without prior preparation.
Making a positive difference in the world, with personal experiences shared about water scarcity in India and the impact of food on health.
Significance of feeling deeply connected to sustainability efforts to truly make a difference.
✦
The importance of corporate responsibility in addressing environmental issues.
32:56Emphasizing the need for businesses to align practices with societal and environmental goals.
Introducing the concept of 'performance with purpose' for driving change and financial success.
Stressing the significance of creating a supportive and inclusive work environment for employees.
Promoting a holistic approach to business success through adaptation and innovation for sustainability.
✦
CEO's admiration for regional CEOs and NGO leaders trying to improve the world.
36:17Importance of sticking to one's beliefs and not succumbing to external pressure.
Praise for NGO leaders for their commitment to making the world a better place despite financial challenges.
Potential for PepsiCo in the African market due to improving economic conditions and demand for healthy products.
✦
Focus on setting up agriculture supply chains in sub-Saharan Africa.
39:22Excitement about growth potential in countries like Tanzania, South Africa, and Nigeria.
Emphasis on the importance of being locally sourced.
Need for innovation and taking risks to stay ahead in the fast-changing world of business.
Belief in being bold, breaking the rules, and comparing the approach to start-ups in capturing market growth.
✦
Importance of Values in Business
42:56Values serve as a personal guide in navigating challenges and making decisions in business.
Reflecting on personal values helps in shaping responses and maintaining integrity.
Determining one's desired legacy and outcome before starting a venture is crucial.
Embracing competition, learning from innovations, and adapting quickly within the company's context are essential for staying ahead.
✦
Leveraging technology for efficient customer problem-solving in e-commerce and mobile commerce companies.
45:43Adapting to new technology is crucial for competitiveness in the market.
Success is determined by customers, highlighting the importance of constant improvement and performance enhancement.
Personal career development discussion includes diverse industry experiences and the value of learning and adaptability.
Employee at PepsiCo emphasizes a strong sense of ownership and commitment to company culture.
✦
Importance of flexibility in career choices.
49:50Speaker shares journey from dentistry to Walmart and various roles at the company.
Emphasizes enjoyment and variety in work over the past twenty-five years.
Suggestions on balancing short-term demands with long-term vision in business.
Stress on delivering results in established industries and balancing projects for short-term gains and long-term investments.
✦
Importance of Balancing Long-Term and Short-Term Initiatives in Investor Satisfaction.
51:54Board of directors plays a crucial role in aligning company goals with investor expectations.
Clear communication of long-term strategy and accountability to milestones are essential for business success.
Building relationships and maintaining open communication with stakeholders is vital.
Family ownership can contribute to a long-term perspective and belief in the company's direction.
00:00[MUSIC]
00:05[APPLAUSE]
00:12>> Let's see, good afternoon.
00:15>> Good afternoon.
00:16>> At Walmart,
we tend to speak back to each other.
00:20We're going to have some time
in a little bit to talk so
00:22please be thinking about what
you might want to ask us about.
00:25I'm really excited,
Indra, that you're here.
00:27>> I am too.
00:27>> They told me I couldn't come
back unless I brought you with me.
00:30>> [LAUGH]
>> And
00:31I said I'd come back only if you
were going to do it with me.
00:33>> [LAUGH]
>> I want to start with maybe the most
00:36important question, and that is,
when you're in your University and
00:39you were playing cricket, what position
did you plan on the university team?
00:43>> [LAUGH]
>> You know, first of all,
00:46do you know what cricket is all about?
00:48>> I do not.
00:48And I-
>> Okay, so.
00:50>> [LAUGH]
>> Still not
00:51going to make a difference
what I tell you.
00:52>> I'm not really very interested either.
00:54>> Okay, okay.
00:55[LAUGH]
>> Go ahead.
00:58Let me-
>> What position did you placed here?
01:00>> I opened the busing and the bowling.
01:01[SOUND]
>> Someone knows what that means.
01:04It's really great.
01:05[LAUGH]
>> [LAUGH]
01:06>> Are you impress?
01:06>> Leadership.
>> Are you impress?
01:07>> I think so, yeah.
01:09>> Then, I was also the captain
of the Cricket team.
01:13>> That was kind of my point.
01:14She's a leader.
01:15>> [LAUGH]
>> I have known Indra for a really
01:18long time, and I was thinking about
what words I would use to describe her.
01:22And some of them would be, visionary,
competitive, tough-minded, caring.
01:29>> Indra makes things happen.
01:31She has a natural leadership
characteristic that you have
01:34used not only to lead PepsiCo and
in your previous roles, but
01:37you also influenced Walmart in a big way.
01:39>> Mm.
01:40I appreciate it, Doug, but
let me give you the compliment back.
01:43Doug and I know each other for
a long, long time.
01:46And I've always referred to
Doug as not just Doug McMillon,
01:50I'd call him Doug McMillon Walton,
because he represents the best of Walmart,
01:54the values of Walmart.
01:55And believe me, even though we're
a generation apart in age, Doug.
01:59>> [LAUGH]
>> I'm not sure.
02:01>> I'm much older.
02:03I've learned so much from Doug,
the way he operates this large company.
02:07And is repositioning it, and so
02:08I think this is a two person back slapping
society and I'm the charter member of it.
02:13>> [LAUGH]
>> So
02:14as we think about what these people might
be interested in or benefit from the most,
02:19the first thing that comes
to my mind is change.
02:22And I know your business well enough and
know what you're thinking well enough to
02:25know that you're facing a situation where
the world is changing very dramatically.
02:31People are changing, the environment
you're operating is changing and
02:35you're trying to position PepsiCo for
the future.
02:38So maybe we start out with
starting out talking about
02:41what you see that convinces you
that PepsiCo needs a change and
02:45what is it that you are trying to
accomplish during your tenure.
02:48>> It's many questions nested in one but
let me take a shot at it.
02:53I think every company today,
the CEOs of every company,
02:57are looking at the environment and
sort of the investor expects you
03:01to be this duck that's just sort
of swimming across the water.
03:06And in the past these ducks
would sort of furiously
03:09swim underneath the water
just to move ahead.
03:12Now, it's like you've got to paddle on
steroids because the pace of change is so
03:17enormous that you've got to paddle even
faster just to make small movements.
03:22And nobody is going to give you
a break and say you can slow down or
03:25you can actually stay in place for awhile.
03:27What's changing?
03:28And I'll talk about the food and
03:29beverage industry because in a way
our interests intersect there.
03:33Every aspect of the business is changing.
03:37What is healthy food is changing.
03:39What do people want to eat and
drink is changing.
03:43How should products be
labeled has not been defined.
03:47There is no authority that defines it.
03:50Supply change are globalizing yet
traceability and
03:53safety standards have
not been established.
03:56There's an NGO in every corner.
03:58So, there's somebody there calling us
out when don't do things right but
04:01then there's no standard to look at
in terms of what we need to do right.
04:07The retail environment is changing
whether it's the emergence of
04:10Walmart in the 90s and the year 2000s or
now the hard discounters and
04:14the emergence of e-commerce.
04:16Everything about the world is changing.
04:18And then, right here in Silicon Valley,
all of the best and
04:23brightest that we want in our companies
are being recruited by these startups.
04:27So we have a tough time recruiting
the right talent to run our companies.
04:30I'm speaking to all of you, so
I think, what happens is that,
04:34we are facing unprecedented
change in our business models.
04:39And on top of that, we have to globalize,
but the world is a tough place right now.
04:43We've got economic volatility,
macro-economic crises in many,
04:48many places, political upheaval.
04:51So I think companies like ours,
if you really want to keep performing,
04:57you've almost gotta change
your model all the time.
05:00And Klaus Schwab of the world
economic forum talks about this and
05:03says, you've always gotta be in beta.
05:05It sounds wonderful as a set of words, but
05:08when you actually have to practice
in the company, it's pretty scary.
05:11Because it's not motivating
a small group of start ups or
05:15a small group of employees who have
the same thinking that you do.
05:18We have 260,000 employees and
when you decide to zag and
05:23zig you got to tell them what you're
going to be doing, why you're doing it.
05:26How it's going to impact them and
05:28why they all have to some
along with you on the journey.
05:31Let me give you examples when we decided
to change our product portfolio to go for
05:36a predominantly fun for you product
line to including more better for
05:41you, good for you products.
05:43Different profitability, very different
product line, closer to agriculture.
05:49Changed the model in the company.
05:51Our employees had to go,
what is she doing?
05:54Why do we have to change?
05:55We're doing pretty well selling these
products, why do we have to change?
05:59But the challenge of the leader
is looking around the corner and
06:03making the change before it's
too late to make the change.
06:06I remember as late as 2007 or 2008.
06:10Going to see investors.
06:11And they looked at me and said,
why do you have to change your portfolio?
06:16We are American.
06:16We like soda and chips.
06:18Your job is to sell more soda and chips.
06:21And I sat there in shock,
because every trend that I was seeing,
06:24indicated that the consumption of
these categories was slowing down.
06:28And I looked at the investor and
I said have you changed your eating and
06:31drinking habits.
06:32And that person said yeah, but
forget me I'm not the normal consumer.
06:36I said the problem is many
consumers are like you.
06:39They've changed their eating and
drinking habits.
06:41Today, that same investor says
to me why can't you go faster.
06:44Why you so
slow at making a portfolio change?
06:47It's because people like you wrote
a ballast for me, you didn't let me go
06:50faster because you always criticize what I
was doing, all right, but that's reality.
06:55So I think we're in a world
of unprecedented change
07:00where companies, the CEOs,
the DNA of the company, has to change.
07:05And we all have to change at a point
when short term is abundance.
07:09Everybody wants the results today.
07:11And the tolerance you have to make
the change on a large scale is not there.
07:19And I'm sure you're facing
the same issues, Doug.
07:21And I mean,
I watch it in action at Walmart.
07:23So tell me a bit about
what you're going through?
07:26I wanted to ask you the questions.
07:27>> [LAUGH]
>> I already have another one.
07:30>> Either way.
07:31>> I think it’s very similar.
07:32I mean you know where you are and
you develop a vision for
07:35where you need to be and trying to get
from here to there is the hard part.
07:39I feel like that the vision that we have,
collectively, is improving all the time.
07:42But turning around and moving an
organization that's older than 50 years,
07:46that was built for
07:47certain purpose, with 2.3 million people,
is a big part of the challenge.
07:52And the last time I was here,
I admitted that I have envy for
07:55those who were at a startup, because
you can write your culture on the wall,
08:00or your values on the board,
and you can go that direction,
08:03you get to create something
rather than change something.
08:07And changing something feels harder.
08:09And then I said to anyone who wants
a great challenge, let me know and
08:11we'll hire you at Walmart.
08:13I had one person call me.
08:14[LAUGH] So, you know, it is hard and
08:18I think these people are smart
enough to figure that out.
08:21>> That's true.
08:22>> Let's go to learning.
08:24You mentioned that you're seeing what
you believe the company should become.
08:32You didn't arrive in this position
knowing everything that you know now.
08:35How do you go about learning as
an individual and using the knowledge that
08:40you are picking up to shape the future
because as you know strategic planning
08:45cycles are gone now, its strategy is
being shaped hourly not annually.
08:51>> The one big lesson I've learned,
Doug, is that if you just depend on
08:55the traditional strategic planning cycle,
or depend on a standard set of consulting
09:00reports, you actually are going to
do your company a big disservice.
09:04And our CEOs and
leaders have to be life long students and
09:08not just students in sense of attending
courses or reading a book or two.
09:13You've gotta learn how to read widely,
walk the market,
09:17look at trends in the market place,
make connections that don't seem obvious.
09:22And start to paint pictures
of what the future could be.
09:26And then watch consumer behavior.
09:28I'll give you an example.
09:29Ten years ago or maybe 15 years
ago if you came to PepsiCo and
09:33looked at all the beverages that
we're being served on the side
09:36tables when we're having meetings.
09:38Most of the people will be
consuming full sugar beverages.
09:43About ten years ago the trend shifted.
09:46Maybe 20 years ago they
were drinking full sugar.
09:49Ten years ago they shifted to diet drinks.
09:53But five years ago they were
drinking more bottled water.
09:56Now the point I make to
my guys is guys don't
10:00you don't need to hire a consultant
to tell you where the trends are.
10:02You just have to look at our side table.
10:04Remember the number of
faces we use to have for
10:07regular sugar Pepsi versus diet
Pepsi versus bottled water now.
10:11If you're all drinking bottled water or
drinking zero calorie beverages,
10:15why do we think we're not
representative of the consumer?
10:18Very often I think what
happens is we separate out
10:21the consumer out there
from the consumer in us.
10:23We are the consumer.
10:25And the more we can bring the two together
and say we too are representative of
10:29the consumer outside,
I think it will be better we go out and
10:33our children play with other children,
we see other families.
10:38And when they moderate certain
products that we sell,
10:42in terms of what's given to kids,
that's a trend, okay?
10:45So, we've gotta watch all of these things.
10:47And too often, I think, us leaders
think what consultants tell us, or
10:51what certain reports say, or
certain books say, is the gospel.
10:56It's really not.
10:57We have to become our own data collectors,
data analyzers and then shape creators.
11:04And I think that's the toughest thing
because people who are rewriting the rules
11:10have to create the shapes and people don't
like that because they have a traditional
11:16model of how things work and they hate
people who upset status quo and I think
11:21both of us are upsetting status quo in
a big way and it's tough but it's fun.
11:26>> It is.
11:27It's sometime to take your kind a business
hat off and be a customer or consumer and
11:32I'll admit when I'm working,
like yesterday I went to Palm Springs and
11:36visited a Super Center,
I'll put my Walmart badge on and
11:39I walk into that store, and
I have a certain mindset.
11:44On the weekend, I went shopping.
11:45Because we needed milk and
some things at home.
11:48And my vision of that store-
>> Did you go to Walmart?
11:51>> Of course.
11:52>> [LAUGH]
I'm not stupid, I mean.
11:59>> [LAUGH]
But
12:02I just experienced out of stocks
differently, everything felt different.
12:06And staying objective and
being in the moment is something
12:10that I continue to work on whether
it's a mobile app or the store.
12:12>> Yeah, I do market tours every weekend.
12:14The first few years that I was a CEO,
12:17I'd take pictures of what I saw on the
store and I'd download it to my people and
12:22say, the data stops here,
this doesn't look right.
12:25I mean I'd go on market
tours sort of about a, two,
12:29three hour radius from my home.
12:32Then I realized that every
division in the US had some people
12:37waiting in the office for my emails to
respond to that quickly and I thought it
12:41was a terrible way to run a company, that
a CEO's out in the market and you've got
12:45a SWAT team sitting in the office waiting
for the lousy photographs to come in.
12:50So I stopped sending the photographs,
but I still do the market too, and
12:53I agonize over it.
12:54Just like you,
12:55I go why is the Gatorade out of stock
when the temperature's 75 degrees.
13:00Why didn't we have a second delivery,
or why didn't we do
13:02a second delivery of Frito Lay products
when we have a holiday weekend?
13:07And now I'm just learning to
just agonize internally and
13:09dump on people Monday-
>> [LAUGH]
13:11>> [LAUGH] It's tough, I gotta tell you,
13:13it's tough.
13:15But when you do that you really experience
your business from the consumer's eyes,
13:21all the retailer's eyes, because I
know how you care about other stocks.
13:26So, when I go to the Norwalk,
Walmart or look at the shelves and
13:29I see out of stocks.
13:31I feel for you.
13:32>> [LAUGH]
>> As I do for me.
13:34>> Our in stock set by the way.
13:35>> Yeah.
>> [LAUGH]
13:36>> Let's talk about design for a minute.
13:39A month or
two ago we were talking on the phone,
13:41and you tried to get met to go to Italy,
or was it Milan?
13:45>> The Milan Design Show.
13:46>> Which I thought was kind
of a surprising invitation,
13:50I don't get invited to
Milan very frequently.
13:52>> [LAUGH]
>> You mean you missed a great one.
13:54>> Tell me, why did you go and why were
you thinking that I should also be there?
13:58>> Do you know anything
about the Milan design show?
14:01>> Only what you told me on the phone.
14:02>> [LAUGH] Okay, let me tell you.
14:05A few years ago, we started
a design capability inside PepsiCo.
14:08What do I mean by design capability?
14:10And I have to tell you a little story
to bring you into the design loop.
14:16When I first became CEO in 2006,
as I looked at our products,
14:19I looked at our packaging, I looked
at how we put things on the shelf.
14:23I thought they were singularly all
right and in some cases unimpressive.
14:29And I thought that we need a dash
of design thinking in the company.
14:33So I gave all of my direct reports,
about 16 of them,
14:36a photo album, a blank photo album and
a camera and I said.
14:40For the next three months, I want you to
go around taking a picture of anything
14:43that you think constitutes design.
14:46Anything, it could be a pencil,
it could be a clip, it could be a teapot.
14:50Anything, anything you want.
14:51Just fill this book for
the next three months and give me a copy.
14:55Give it to me so
14:56that I know what the issues are I have
to handle in terms of design thinking.
15:02Here's the surprising finding.
15:04Half the people didn't
turn the book in at all.
15:08Half the executives.
15:09The few that turned it in, a few of them
had their wives fill it in for them.
15:14>> [LAUGH]
>> Two executives hired a professional
15:17designer to fill the book in.
15:19And told me they did.
15:20But the few that actually filled in
the book I still have them with me as
15:25a mementos of how bad we were.
15:26It was a horror because what they thought
was design was not what design was.
15:33So let me now tell you what is design?
15:35To me design is something that you
embed into a product or a service or
15:40an offering that romances the consumer and
draws them to the shelf or
15:45to the product, or
to the service or whatever it is.
15:50It's how you think about the shape
of the product, how it's presented,
15:54how it's talked about.
15:56Not just the color of the package
everything in terms of the experience that
16:00actually draws the consumer in.
16:02And we never though about design but
16:04really thought about it as Is
the yellow on the Lays bag right?
16:08Should we put an extra swirl of red?
16:10Or should we put an extra
emoji on the Pepsi bottle?
16:13So, our definition of design was very,
very, I hate to use the word,
16:17but primitive.
16:18And I was part of that group.
16:20So we all went to design school and
learned all about design.
16:23Not in terms of the package, but
all the way down into design of a product.
16:28Example, when you eat Doritos,
how many of you are Doritos consumer here?
16:33I love it.
16:35So when you eat Doritos,
when you get to the bottom of the bag,
16:40a typical guy would take
the Doritos bag and just do this.
16:43>> [LAUGH]
>> Okay?
16:44Because you sort of eat
the crumbs that way.
16:46Women don't do that.
16:48Women try to be very delicate putting
their hand and taking the last Doritos.
16:51But then you're leaving about 5%
of the Doritos in the bag, okay?
16:55>> [LAUGH]
>> But
16:56because they're little crumbs there,
which taste awesome.
16:59But in our package design, why don't we
figure out a product design for Doritos?
17:04That is completely different that a woman
can actually put in a put in a purse, so
17:08that it doesn't crumple, and you can
actually eat it in a more delicate way but
17:12all the way down to last 5%.
17:14I'm using Doritos.
17:15>> Indra is solving real
world problems here.
17:17>> [LAUGH]
>> [LAUGH]
17:17>> Right in front of you.
17:18>> Doug.
17:19>> It's good stuff.
17:19>> [APPLAUSE]
>> Doug.
17:21>> [APPLAUSE]
>> I gotta tell you,
17:22if I solved the problems
you get more sales.
17:24>> [LAUGH]
>> [LAUGH] So it is a real world problem.
17:27At the end of the day,
I worry about one thing.
17:30>> [LAUGH]
>> Growing my sales at Walmart.
17:31>> [LAUGH]
>> But leaving that aside, so that's
17:35an example of how you take design thinking
all the way to the product design itself.
17:40The other is when you think
about a food service machine,
17:43in the past with the standard machines.
17:46And now with the new spire machines
we have which are slowly rolling out.
17:50You can have almost 400, 500 variants.
17:55But the machine looks
like a beautiful iPad,
18:00but even more in
an aesthetically pleasing way.
18:05And so, you bring design into a day to
day experience that was quite boring so
18:09that's what design thinking
is doing to PepsiCo.
18:13We got amazing designers we've hired.
18:15In Milan every year they have
a design week where everything from
18:20furniture to lighting
to day to day products,
18:23you see the best of design from the best
designers showcased all around Milan.
18:29The whole city becomes a design,
sort of a bazaar of designs.
18:36And it's just a phenomenal experience to
go there and just see what's going on.
18:41In the last few years,
3 years ago I had just visited Milan for
18:45the first time, from a design perspective.
18:47Two years ago we started to build a Pepsi
design experience, where we actually had
18:54a big warehouse that we converted design
experiences with PepsiCo products.
18:58So we had an experience
that we called the fizz.
19:00Looked like Willy Wonka and the Chocolate
Factory, how do you make your own
19:05soda with all kinds of toppings,
just a fabulous experience.
19:10We had Lipton Pure Leaf Tea.
19:13How can you serve tea in an authentic way,
almost like a tea house cafe?
19:19What can you do with the Gatorade bottle?
19:21The new bottle with the sensors
that athletes can now drink, and
19:25it'll, sense your saliva and
19:27tell you exactly, what extra electrolytes
you need to put into your body.
19:32So we showcase some of the stuff
in a very, uplifting way.
19:36And, what was wonderful
is the big magazines,
19:39the design magazines wrote that there
were two exhibits that stood out in
19:43Milan this year from
a consumer perspective.
19:46One was Nike and the other was PepsiCo.
19:49And so I thought we'd landed.
19:51It was a great thing.
19:52You missed a great one.
19:53Next year.
19:53>> [LAUGH]
>> Next year.
19:54>> Next year.
19:55>> That's a lot of progress.
19:57>> It is.
19:57>> From one story to another.
19:58>> And I'd like you to visit
our design studio some time.
20:01Phenomenal designs.
20:02We have a long ways to go Doug.
20:04A long ways to go.
20:05But they're making progress.
20:06>> Yeah,
I think it's going to matter to us.
20:08It feels like what's happening in retail
is that the needs that customers have
20:13are being outsourced to the Internet
whether it's mobile or voice or
20:18whatever comes next in the future
increasingly, so people are not going to
20:22have to think about staying in stock
on Pepsi, it's just going to happen.
20:26And we're going to play a role in that
process through our supply chain.
20:30>> But even on something like a Pepsi,
20:33if we keep thinking of it as
the cola that was invented in 1893.
20:39That's like being
the custodians of a utility.
20:43That is not the business we are in.
20:45Question is how do you bring excitement
into this category again and again?
20:48Because this is a heritage brand,
so we're doing several things.
20:51Whole range of craft sodas,
lower sugar offerings,
20:56trying to make Pepsi more of
make my own beverage at home.
21:02So we're playing with Pepsi in so
many ways.
21:051893, the new, cola that we launched,
is a craft soda.
21:09Doing very well where it is.
21:11The make my own Pepsi that's being sold,
21:15interesting consumer
base it's bringing in.
21:17And the lower sugar offerings
of Pepsi with great taste,
21:21will go into to the market.
21:22Will they all be as block
buster as the original Pepsi?
21:25Probably not.
21:25But they will stem the decline of
a category while we launch all kinds of
21:30new beverages on top.
21:31So-
>> The emotional component,
21:33not just the utilitarian
aspect of your product.
21:35>> That's exactly right.
21:36Yeah, because Pepsi is not a drink,
it's an experience,
21:40it's a brand that as time,
timely I would say,
21:43because it defines culture,
it defines sports, it defines music.
21:48And, I still remember a famous music
producer in California once said to me,
21:53when I ran into him he said,
21:54I don't have any young musical artists
that are worthy of a Pepsi contract.
22:00That's a big statement,
that are worthy of a Pepsi contract.
22:03Because, to be associated with Pepsi,
that launched so
22:06many young faces was a big thing.
22:08Whether it was Micheal Jackson, or Britney
Spears, or Madonna, or Christina Aguilera,
22:13they all made their success working with
Pepsi, they were known as Pepsi stars.
22:19And so, he said I don't have any young
people that are worthy of Pepsi contracts
22:22so the Pepsi brand is absolutely
associated with culture-defining moments.
22:30And so, we have to figure
out how to make the product
22:33come in tune with the brand even
more as the consumer changes.
22:37>> You can probably pick up on some of the
themes, but what happens is as companies
22:40get older and larger, they start
specializing within the business.
22:45And it replicates what you've done before.
22:47So in Walmart, we have logisticians,
and merchants, and marketers, and
22:52lawyers, and everybody specializes and
you end up with these silos that are,
22:56by design in some instances, created
to just keep doing what you're doing.
23:01And then, disruption happens, and you have
to figure out how to take an older company
23:05and a larger company and change it
back to being more entrepreneurial
23:09move with speed and change it.
23:10And you can hear those names and
then their story and
23:14it's the same on our story and
I think a lot of what we're believing at
23:18the moment is that we're going to help
transform the company using technology.
23:23We can hire talent, we have hired talent,
we can invest, and do a lot of that.
23:27But over time, what will differentiate us,
and ultimately enable us to win and
23:32have a role to play in
society is still humanity.
23:35It's still our culture, it's still our
people, but getting from where we are now
23:41to there will require cultural change in
addition to advancements in technology.
23:47And that's an interesting business
challenge to take on when you at our
23:51scale.
23:52>> I think the big question for all of us,
Douglas, there's been a lot written about,
23:56you've got to preserve history and
23:58the heritage of the company
while you make the change.
24:01Sometimes I wonder if it's a ballast.
24:03I'll tell you why, because, yeah,
you should respect the heritage.
24:07You should respect the culture.
24:09Be cognizant of where you came from but,
I'll speak for
24:14myself, I'd say maybe I was a little
too respectful of the heritage and
24:19culture because what happens is.
24:22When you have companies where people
are in the company for long time and
24:25PepsiCo's got a lot of
long tenured employees.
24:28They've come into PepsiCo young.
24:30They retire from the company, and
24:32then as they leave the company,
they still remain attached to the company.
24:35And they are talking about
PepsiCo all the time.
24:38At some point you've
got to make the break.
24:40You know what I'm talking about.
24:41They still think they're
part of the company,
24:42they're running the company, right?
24:44And so,
this book club has to be kept happy.
24:48But I don't think you should
let them run the company.
24:50And in many ways you've got to
make a break with the past.
24:54Because if you don't, you're spending more
time appeasing the heritage employees.
25:00And the heritage voices as opposed to
saying guys we don't have the time
25:05we have to make the change.
25:07>> Right.
25:07>> And guess what?
25:08it's going to be painful, but
25:10the sooner we make the change let's do it
and the one thing I learned again I'd say
25:15I wasn't may be a little bit
more patient than I should have.
25:18When you know you have to make
a change and people don't come along.
25:23You wait for little while, but
25:25then after that a some point you've
got to say enough is enough.
25:29Every third week there's going to be
a series of retirement parties you're out,
25:33because if we don't do that, again the
people who have been in the company 20,
25:3830 years pull you down.
25:41And they create sort of environments
of saying the good old days were great.
25:45And people start to believe that
there's still those good old days that
25:48could exist, and they really can't.
25:51And I think,
if I had to do it all over again,
25:54I might have hastened
the pace of change even more.
25:57>> Seize that opportunity to
actively shape the culture.
26:00>> Yeah, and then say you know what,
guys I'm not going to sit here
26:05doing workshop after workshop and
trying to convince you to come along.
26:09I've tried, you're either in it or
you're out.
26:12And that sort of brute
actions I didn't take.
26:18>> One of the things that gives us
a chance to make it through this
26:21transformational period is
that our founder loves change.
26:25And while we can respect the past,
you must invent the future.
26:29And our founder passed away in 1992,
but the one thing I know for
26:33sure from being around him a little
bit and from all of the stories and
26:37experiences is that if he were here today,
he would be changing things.
26:40And it gives you that mandate.
26:42You can stand in front of a group of
Walmart associates and say the only thing
26:46that's constant at Walmart is and
the group will say back change.
26:51And that gives you an opportunity to
say okay, let's talk about what we need
26:54to change, why we need to change and
what this is aimed towards.
26:58And if we don't, we're done.
27:00It's only a matter of time.
27:02>> Change is scary.
27:03Change is very, very scary,
27:04especially when you're living
the comfort of the large company.
27:08Where you had fabulous salaries,
benefits, pension plan that was terrific.
27:14And all of a sudden you're
going to be cast out.
27:17>> Isn't it interesting,
it's perceived safety.
27:19But it's actually the opposite.
27:21This safety of a career, of a company,
27:24the future is actually on the change
side of things not on the status quo.
27:29>> But if you know that you have
a role in the change you embrace it.
27:34But if you don’t know if you
have a role in the change or
27:36because you’re sure you don’t have a role
because you don’t have the skills.
27:39That’s a problem.
27:40>> So communication today is different.
27:42>> Totally.
27:44>> I joined Facebook last week.
27:46I've been on Instagram for a while.
27:48What do I need to be on next?
27:49>> Snapchat.
27:51>> Snapchat's next.
27:52There'll be something after that probably.
27:55But Sam Walton was not on Instagram or
27:58Facebook and I know I'm a little late to
the party, but there's power in it and
28:02it's all about getting the word out on why
are we doing what we are doing and and
28:06what is it that we're
trying to accomplish?
28:08In giving people a voice, you know,
communication is not one directional,
28:11it's multidirectional.
28:13>> I'm just on Twitter and
I'm scared to death.
28:14Because I have no idea
what's going to happen.
28:17Look, for you kids,
you're reckless, all right.
28:20>> [LAUGH]
>> For us, for
28:22our CEO it's terrifying because if you
make one mistake on tweeting one word out.
28:28They'll be millions of people who sort
of kill you in the public domain about
28:33how dare a CEO say what they do.
28:35I'm envious of my kids because
the stuff they tweet out,
28:38the stuff they put on Facebook.
28:40My God, scares me to death, but
28:41you know what this is the great
thing about being young.
28:44What they don't know yet
is all of that is going to follow them for
28:47the rest of their lives.
28:48[LAUGH]
>> [LAUGH]
28:50>> That's the tough you know?
28:52You and
I don't have anything to worry about.
28:54[LAUGH]
Ted, I wanted to ask you a question.
29:00How do you manage to be CEO of Walmart,
29:04living in this small town where every move
that you make is tracked all the time?
29:09>> [LAUGH] What do you mean tracked?
29:12You mean everybody knows everybody?
29:14Like Mayberry?
29:15>> [LAUGH] Something like that.
29:17But we're bigger than Mayberry, yes?
29:19>> Yeah, we live in a cool place
that's actually changing a lot, but
29:22it's still small and it's a bubble.
29:25It's not like the rest of the world in
some ways and so it's really important for
29:29us as leaders to be out and
we travel a lot, we're all over the world,
29:34but go back to this really small
place where you can go to Walmart,
29:38which I do,
everybody's like hey Doug how you doing?
29:41People follow you around the store to
make sure that everything was in stock.
29:43>> [LAUGH]
>> So
29:48we have to be cognizant of the bubble.
29:50And not let it cause us to be comfortable.
29:53It's not the most competitive
market in the world.
29:56>> That's very true.
29:57You know when I go in market
research it's the same thing.
30:00They set up the market for me so
I always see the perfect execution.
30:05So now when I go to any city and they say,
30:07we're going to the following three
streets to do marketer I go, guess what.
30:11I'm going to decide where we're going.
30:13And now they're terrified because
I could pick a place that's
30:16completely off the beaten path and
30:18I don't want to see a prepared market
I want to see the market as it exists.
30:22>> Okay.
>> Normally for the consumer.
30:23>> That's when we don't
tell stores we're coming.
30:25>> Right.
>> When yesterday when I popped
30:26into the store.
30:28One associate once told me Doug you're
just like the Queen of England.
30:32And I said in what way?
30:33And they said everywhere you
go you smell fresh paint.
30:35>> [LAUGH] That's a good one.
30:39>> You gotta remember that, right.
30:41>> Yeah.
>> You gotta remember that and stay real.
30:44I think we've got time for
maybe one more subject and
30:46the one I'd like to pick is
making a difference in the world.
30:50So you ended up in this position,
30:52probably growing up as a kid you knew
I'm going to be the CEO of PepsiCo.
30:56I mean you probably knew that.
30:58But now you find yourself here,
and you have this responsibility
31:02in this platform really to try and make
a positive difference in the world, how do
31:06you think about that, and how do you help
lead the board and your management team
31:12towards making that difference and
what's that mean to you personally?
31:15>> You know Doug, the more I deal with
this whole idea of making a difference,
31:20sustainability, I'm convinced that unless
you feel it, unless you feel it deep down
31:25in your heart and you really understand
it, you'll be doing good service.
31:29That's the whole idea of sustainability.
31:31In my case, I grew up in Madras
in India where those days and
31:36even today I think there
wasn't much water in the city.
31:39And we had so little water to
live on every day, that this
31:45whole notion of water availability and
water use was a crisis for me all my life.
31:51I didn't know a time when water was
aplenty until I came to the United States,
31:56okay.
31:56So water was seared into my head.
31:59The second is we grew up eating and
drinking a certain way.
32:03And all of a sudden I realized
that as you look around the world,
32:06as you look around all of
the health issues around the world,
32:10food played a very important role in
the people's health and wellness.
32:14So, one had to worry
about that aspect too.
32:18And then my daughter went to work for
the environmental defense fund, EDF, and
32:23I got a whole new appreciation for all of
the environmental issues beyond water.
32:28Whether it was the carbon footprint,
whether it was fisheries,
32:31whether it was any issue, she would
actually show me all of the statistics,
32:37what it was doing to the world.
32:38Overfishing in certain coasts or
plastic in oceans.
32:42And when you start to really
feel these issues and
32:45think of what your kids and their kids.
32:47You ask yourself, what is my role
as a steward of a large company?
32:52To make a difference in the world through
this incredible platform that I have
32:56called leader of a big company.
32:59That could either contribute to
the issues or help alleviate the issues.
33:05I knew that I didn't want to
contribute to the issues.
33:08I had to start helping the issues and
to the extent that society had changed and
33:14I was perceived to contributing
to some of the issues,
33:16I had to make a change
to my business model.
33:19Therein was born our notion of
performance of purpose which is,
33:23how can we keep performing
while changing the portfolio,
33:27while fundamentally changing
our environmental footprint.
33:30And then third one,
33:32which is really the one that I am really
most excited about is, what can we do for
33:36our employees so that they can come to
work at PepsiCo feeling like PepsiCo is
33:40a place where you cannot just
make a living, but have a life.
33:44So that you can bring your whole self to
work, the company treats you in a fair and
33:48equitable way, provides you
the support system to be who you are,
33:52to allow you to be who you are.
33:54And we embrace you completely.
33:56And so, performance and purpose is not
a corporate social responsibility program.
34:02It is not.
34:03It is how we make money.
34:05Because our belief is that if
you don't change the portfolio,
34:08we can't keep delivering performance.
34:10If we don't change our
environmental practices,
34:13we won't get a license
from society to operate.
34:16And our cost goes up because we pay for
water.
34:18We'll end up paying more for
plastic recycling.
34:21So we have to do that.
34:22And if we don't get the best and
34:23brightest in terms of people,
we won't be able to deliver performance.
34:27So performance and purposes how we make
money, not how we spend the money we make.
34:32Which is what corporate social
responsibility is all about.
34:34So that's really what we are all about.
34:36>> Very well said.
34:37We see it the same way.
34:38I feel the same way.
34:39We want to open it up for questions.
34:41Fire a difficult one to Indra
if you could to start us off.
34:44>> The first question comes from Twitter,
it's actually to you both and
34:48it's a classic.
34:49What organization, and
what leader do you most admire and why?
34:56>> [LAUGH]
>> Need time to think.
35:00I got to be around Sam Walton a little
bit, Sam was the founder of Walmart.
35:04He's the first person that comes to mind.
35:06There are a lot of
positive characteristics
35:09there that we're still
trying to live up to today.
35:12In terms of who I admire at the moment,
35:15rather than one person I think I
would characterize a group of people.
35:20One of the awesome things about what
we get to do is we get to meet a lot of
35:24leaders and what comes to mind is
that there are people out there that
35:27are genuinely taking risk to try
to make the world a better place.
35:32And this would be a very
logical time to play it safe.
35:35It'd be a very logical time to try and
stay off the radar screen.
35:39But sometimes you gotta step up there and
35:40you gotta put some personal equity on
the line and try to change something.
35:44And there are people that are doing that.
35:45Some of the CEOs that live in this part of
the world are doing things like that to
35:49try and improve the world,
and I admire that.
35:54>> I'm going to give you two.
35:55One is something that sounds tested and
tried.
35:59When I became CEO, I called Steve Jobs and
36:02I said, I'd like to spend
a little bit of time with you.
36:05Just to sort of understand what it is to
run a company the way you have changed it.
36:12And he graciously agreed
to spend some time with me.
36:14And he gave me two or three hours,
I think, of his time.
36:17And some of the lessons he
taught me about design.
36:20How do you take something that you
truly believe in, and stick with it?
36:24As opposed to changing your point of
view because the outside world wants
36:27you to change your point of view.
36:30Phenomenal lessons, that he was so
gracious to give me the time.
36:33And that he gave me those
lessons I'll never forget.
36:36I think the world lost
an incredible person in him.
36:38He did tell me a few things
like don't be too nice.
36:41When you really don't
get what you want and
36:43you really believe it's
the right thing for the company,
36:45it's okay to throw a temperature tantrum,
throw things around.
36:48People will talk about it and
they'll know it's important for you.
36:52And I think that in itself
was a valuable lesson.
36:54>> [APPLAUSE]
>> I honestly believe that.
36:57In terms of people I admire, I tell you
the people I have really begun to admire
37:00these days are people
who head up these NGOs.
37:04Because they don't make much money,
in fact, they barely make ends meet,
37:08but yet they feel so
deeply committed to a cause.
37:12They do the research, they go visit
companies in their headquarters,
37:16they'll do goofy things,
but you know what?
37:18It's goofy if you look at it strictly from
the point of view of, they're bugging me.
37:23But if you look at it through their eyes,
walk a mile in their shoes, you have to be
37:27proud that they feel so strongly that they
want to make the world a better place.
37:32So all of these people who run NGOs,
even though one side of me says god,
37:37I wish they didn't have
such a big megaphone.
37:39The other side of me is so proud of what
they do and I think we're all going to
37:44change and become better companies
because of their leadership.
37:49>> Who’d like to go next?
37:49How about right here?
37:52Hi, my name's Nadu Lawson,
I'm an MBA too here.
37:55My question for you was, you mentioned
international growth before, and
37:59I'd love to hear how PepsiCo and Walmart
are thinking about the African market,
38:05specifically in the mid and long term.
38:08What do you think you're going to have to
do differently to win the consumers there?
38:14>> I tell you PepsiCo in Africa doesn't
have as big a footprint as we would like
38:19to have, but I think it's
an actually wide open market in so
38:24many ways and I'll tell you why.
38:27The African consumer is, the economic
plight of the African consumer
38:32is improving enormously, so
that's a very good thing.
38:35Second, the continent is hungry for
the right supply chains,
38:39the right products to come in.
38:41So I think the market is
just now sort of taking off.
38:46I wish we'd been there earlier, but
38:49now that we are increasing our footprint
there, I think the challenge we
38:54have is how do we go into Africa with
healthy products right off the bat.
38:59And not start with the fun-for-you
products, start with more the good-for-you
39:03products, the more grains, fruit and
vegetable, stuff that contributes to
39:06the nutritional quality of the African
consumer which means, we have to setup
39:10the agricultural supply chains, which is
really what we are working on right now.
39:14So I think especially the sub
Sahara Africa region because in parts of
39:19Africa like Tanzania or South Africa or
39:22Nigeria we're in already, but the rest of
Africa I think we're working on setting
39:27up the agriculture supply chains and
there's a lot of it available in Africa.
39:31We think the potential is huge.
39:34>> I'm really excited about
sub-saharan Africa and
39:36personally was involved in the investment
that we made there a few years ago,
39:40in what I believe is the best
management team on the continent.
39:43The best management team in Africa
from a retail point of view.
39:46We have various store formats where going
to end up with an important business in
39:50Nigeria someday, in Kenya, in South
Africa, where most of the business is now
39:55and we're today in about
12 different markets there.
39:58Personally, I've been to five or
40:00six different countries in the region in
the last few years and I feel an energy.
40:04And an optimism and an opportunity that I
believe will be a very good business for
40:09us over time.
40:10We want to be local.
40:11We decided not buy a 100% of
the business because we wanted
40:14others to be able to benefit from
the business that we were growing there.
40:17We're sourcing locally to the extent
possible, which is not that hard because
40:22most of it's food and we are not
moving it a great distance anyway.
40:26So I think there's an opportunity to
grow there for a long period of time and
40:30reach a lot of people and fulfill our
purpose, which is to save people money and
40:33help them live better.
40:35But we're going to have to generation-skip
in some ways with technology.
40:38You, I'm sure,
know how advanced mobile is and
40:40how advanced some things like payment
are and some parts of Sub-Saharan Africa.
40:44And so, just like the rest of the world,
we've gotta be on the front edge,
40:47as it relates to technology,
and do it in an African way.
40:51I'm very excited about it.
40:54>> All right, my name's Ben,
I'm an MBA too.
40:56First of all, thanks so much for coming.
40:58So you talked about having
to be a bit conservative, or
41:01the pressures to be conservative,
as the CEO of a big company.
41:04You have to be conservative on Twitter.
41:05You have to be conservative
with your investors.
41:08So having to innovate, to succeed, in this
fast-changing world, how do you resist
41:12those pressures and what can CEOs like
you do to resist those pressures?
41:18>> I think personal
conservatism versus taking
41:21risks with the business
are two different issues.
41:23So, with innovation, you've got to write
the rules for our products because
41:29very often, if you really want advantage,
you've gotta be the first mover.
41:33So I think on the product side and
the product experience side,
41:36we can take as many risks as we want.
41:39When I was talking conservatism,
I was talking about
41:42personal messages going out or messages
that we put out on behalf of the company.
41:46We just got to be careful about
putting up personal messages.
41:50I tell you something on innovation.
41:51The bolder we can be, the better.
41:55The more we can break the rules,
the better off we're going to be.
41:57Because you know the world
is full of ideas today and
42:01if we don't do it somebody
else is going to do it.
42:03In fact, I'd say that little
start ups are capturing a lot
42:06off the growth today even in our space,
even in the food and beverage space.
42:10So, in many ways in our company,
42:11we have to act as if we
are a bunch of little start ups.
42:15That's what we are,
a bunch of little start ups.
42:17So, in order to do that,
we have got to allow people to be bold,
42:23write the rules any way they want, and
that's what they're doing in our company.
42:26When we have $22 billion brands,
and now we've got another three or
42:30four in the pipeline,
each of them is a little start up.
42:33And they're not conservative at all.
42:35Pepsi is not a conservative brand.
42:37As an individual, I am.
42:40I'm sure that next year's going to
be less conservative than me.
42:43But I am a conservative person,
because I'm terrified of all of you.
42:46[LAUGH]
>> I think the advice I would give you,
42:51whether you're going to start a business
or you're going to join a business,
42:54would relate to values.
42:56And pausing for a little bit of time to
know who you are and what you stand for.
43:01In our case, at Walmart,
we have four core values.
43:04We respect the individual, we strive for
excellence, we serve the customer and
43:07we act with integrity.
43:09Those four core values resonate for
me personally, so it's been quite easy
43:14to be part of Walmart because those are
the things that I personally believe in.
43:18And the reason that matters,
43:19in the context of your question is lots
of things are going to come your way.
43:23There's going to be an emergency tomorrow,
something's going to come up, and
43:27I'm going to have to deal with it,
or when you're in these jobs,
43:29you're going to have to deal with it.
43:31And we need some sort of
a foundation to stand upon.
43:34And pausing to remember what are our
values, my personal values, and
43:39how does my response here
relate in that context.
43:44If you don't have that foundation,
you're going to be
43:47moving around trying to figure out
one instance at a time what to do.
43:51Whether it's a question
about risk-taking or
43:54how you handle a crisis or something else.
43:56So it sounds a little bit hokey,
I suppose, to pause and
44:01write down or think about what
you want your end story to be.
44:05But I think it’s valuable.
44:08Pretend that you’re at your
retirement celebration someday.
44:12What do you want them to say about you?
44:15What legacy do you want to have left?
44:17And predetermine before you start
that that’s going to be your outcome.
44:24>> Yeah.
44:26>> Not sure who's deciding who goes next.
44:29>> Hi.
44:29>> Go for it.
>> Yup, thanks for sharing.
44:33I have a question.
44:34So Amazon is a huge competitor,
like if you were-
44:36>> Who is that?
44:37>> [LAUGH]
>> Amazon.
44:38>> Amazon, got it.
44:40>> I mean, if both of you
could talk to Bezos right now,
44:44what would you say to him?
44:46>> Go on vacation.
44:47>> [LAUGH]
>> [APPLAUSE]
44:51>> All right.
44:53[APPLAUSE]
>> Jeff doesn't need any money, but
44:57I'd be happy to pay for his vacation.
44:59>> [LAUGH]
>> They are doing such a good job, and,
45:02as a retailer, and somebody who grew up
serving customers, I admire the innovation
45:07and the solutions they're bringing to
customers, and I'm challenged by it.
45:12And part of our culture is to embrace what
competition's doing and learn from it and
45:18try to move quickly to adopt what we
should adopt within our own company.
45:23In some cases, that's dangerous because it
can look like following and be following,
45:27and if you are following somebody you
are only ever going to be second best.
45:29So you have to, at the same time,
be who you are and
45:32innovate within the context
of who you are.
45:35But, clearly, what they and other
e-commerce companies, mobile commerce
45:39companies, are teaching us is that
technology can be used to solve customer
45:43problems in a different way, and it saves
them time, it makes life simple and easy.
45:49And we did that for
a period of time in one way.
45:52And now we've gotta do it in new ways.
45:54So I welcome the challenge.
45:56I like a competition.
45:57The one thing that I know for
sure is that customers are going to win.
46:01And they will decide who's here and
who's not here and, thankfully for us,
46:05we don't compete against just one company,
we compete against a lot of companies.
46:09And what matters the most is how much
we're improving and getting better.
46:12So I like it.
46:13Gets me up in the morning and
46:14I feel challenged and
I wouldn't want it any other way.
46:20>> You said it all.
46:21[LAUGH]
>> Thanks for coming and sharing.
46:25My name is Erin Jung,
I'm from China and now MB 1.
46:29So I have a question for both of you,
46:30as more personal career development,
so one is for Doug.
46:35Doug, you have spent all your
career life in Walmart, but
46:39actually for now in our years,
it's not very common.
46:43So I really want to know what drives
you to stay with one organization for
46:46your whole life?
46:47And then another question is for Indra.
46:49You have tried different kind of role and
different kind of industry.
46:53I want to know when you find your passion
and how you get this passion for it.
47:00Thanks.
47:05>> I think I've learned from
all the industries I've been in
47:07because it's ranged from
when I was a consultant,
47:11you learn everything from chemicals
to banking to high tech, healthcare.
47:15I did everything.
47:16So it was fantastic to learn strategy
through the eyes of a BCG because
47:22you realize that strategy
is not industry-specific,
47:26it's frameworks and how you think
about a business, so I learned that.
47:29And then through my journeys
at Motorola and ABB and
47:32then coming to PepsiCo,
just going from high tech to utilities and
47:38power plants, again, I learned so
many different facets of business.
47:42When in came to PepsiCo,
47:44even though I hadn't really worked in the
consumer space, I could think differently.
47:49And that point when I joined PepsiCo,
PepsiCo needed new thinking.
47:53So I came in and started to shake
up status quo from day one.
47:56And PepsiCo gave me the leeway to go
ahead and make all the changes and
48:01suggest all the changes
that need to be made.
48:04And I think why I've stayed in PepsiCo and
48:06why I put down roots in PepsiCo From
the day I joined the company and
48:09this is one part of the culture
that has not changed.
48:12I feel like PepsiCo's my company.
48:15It's embraced me, and now I make
sure we embrace other employees.
48:19I feel it's my company, it's not
some public company called PepsiCo,
48:23it's my company.
48:24Every aspect of the company,
I feel I can change it any time I want.
48:28I felt that way when I
was head of strategy.
48:30I felt that way when I was CFO,
when I was president.
48:32I feel that even also as a CEO.
48:35When you have that sense of
ownership about the company,
48:38why would you leave
something that you own?
48:41And so, I put down roots and
I don't regret for a moment
48:45the 22 years that I've been at Pepsi Co
and it's the greatest ride of my life.
48:49Whether I was CEO or not is irrelevant.
48:51It's been the greatest ride of my life.
48:56>> My dad was a dentist and
dentistry's hard.
49:00None of you are going to be dentists,
right?
49:01That's why you're here.
49:02>> [LAUGH]
>> [LAUGH]
49:03>> He was a dentist for
49:0440 years and it is hard.
49:07You get up every day.
49:08You go to see people who
don't really want to see you.
49:10They're there, because they need to be.
49:11>> [LAUGH]
>> [LAUGH]
49:13>> And so, I was influenced in a big way
49:15to try and create a career for
49:16myself that was flexible,
because I didn't want to be trapped.
49:19Trained for one job and have to do that
job forever, if I didn't like it, so
49:23I went for a business degree.
49:25I went for my MBA and
my MBA was primarily driven, so
49:28that if I got into a situation where
I wasn't happy, I could change jobs.
49:31I thought it would help me move but
then, I ended up working at Walmart.
49:35And I really started just because I needed
a summer job to make money for school and
49:40I loved it and that's why I'm still here.
49:43I have had a blast.
49:44I have gotten to do more
than a dozen different jobs.
49:46I've worked across countries,
across formats.
49:50We deal with everything from marketing to
logistics to finance to legal to Africa.
49:59How fun is that?
49:59So, when I'm not having any fun anymore,
I won't do this anymore, but for
50:02more than twenty five years now,
it's been a blast.
50:07And I've come to care about it
an awful lot and I haven't been bored.
50:10If I was bored,
50:12I'd do something else or if I'm working
around people I didn't like, I'd leave.
50:15But there are lot of great
people around where I work.
50:20>> Thank you very much for coming.
50:23My name is Sarah Foo and
I'm a second year MBA student and
50:25and I'm told I very lucky
got the last question.
50:27[LAUGH] So, my question to you is, so
50:32obviously you talk about a lot
of changes and taking risk.
50:36But a lot of that is only going to be
measured or seen or evaluated over years.
50:40But also today, if you look around
the world like investors or
50:44just the market in general
is very short sided.
50:46And then, there is that so
much noise in the market.
50:48So, how do you balance
this short term demand for
50:49you to deliver versus
the long term vision.
50:52To take risk and make long term changes
that are actually good for the business?
50:59That’s really well said.
51:01>> I know.
>> I think you get it.
51:02>> [LAUGH]
>> Now what do we do about it?
51:05>> What do we do about it?
51:06You know I’ll tell you something.
51:09I think you got to look at the investments
you make in the company, as a portfolio.
51:13There’s a bunch of stuff that
delivers in the short term and
51:16that gives you the breathing room into
further to invest in the long term.
51:20Because I don't think, especially now,
51:22industries that are more
established unlike a startup.
51:26I don't think you can say, look, wait for
three or five years and five years,
51:30you'll start seeing huge results.
51:32Nobody is going to believe you,
because we are expected to deliver,
51:35because we established legacy companies.
51:39So the way it is,
I look at things in Pepsi,
51:41because I know what we need to invest in.
51:44Constantly balancing projects
that will deliver today,
51:47countries that will deliver today.
51:49Which can then provide the ammunition for
us to invest in long term initiatives.
51:54You can't have too many
long term initiatives or
51:56too many short term initiatives.
51:58Because you don't want to spoil
the investor with too many short
52:01term programs.
52:02That then don't give you the position
to invest of the long term.
52:06So, this judicious balance is
what we worry about all the time.
52:11And I can tell you, the only way you can
do that is if you have the support of your
52:15board of directors.
52:15For public companies, the board has to
completely buy into your program and
52:20back you.
52:21In case investors say,
we don't like the shape of your delivery.
52:26>> If we ran these businesses for
one quarter of one year,
52:29we would harm them greatly and
we care too much about them to do that.
52:33But as we're articulating
that long term vision,
52:36which in some cases may be
beyond one investment cycle.
52:41We have to communicate clearly
what our strategy is and
52:44be held accountable to
milestones along the way.
52:47So it's not enough to say,
I am managing this business for
52:50the long term get back to me in
five years, we'll see how it goes.
52:53>> We'd like to try that.
52:54[LAUGH]
>> So
52:56I think as long as you are deliberate,
thoughtful, you build relationships.
53:00And communicate,
whether it's the investment committee or
53:02your board, you can do it.
53:04In our case,
53:05we have a family that owns almost
half the business, so it helps a lot.
53:10If they believe in what you're doing,
it helps us have a long-term perspective,
53:15not just a perspective that's
>> [CROSSTALK].
53:18>> If you ever have the chance,
I recommend it.
53:21>> Please join me in thanking Doug and
Indra.
53:24[APPLAUSE]
>> [APPLAUSE]
53:26>> Thank you very much.
53:27>> Great job, thank you.
53:28>> Thank you.
53:29[APPLAUSE]
53:33[MUSIC]
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