Dear Indra Nooyi,
Though we have not met, I write this to express the ways in which you have provided a role model for millions of people who are leaders and those who may find themselves in circumstances where they are called upon to lead.
The financial performance of PepsiCo speaks to your leadership but is far from the only measure. PepsiCo has made inroads in areas such as sustainability and health and you have spoken for years about the need for businesses to do good for society. All the while, you have maintained a dignified, steady demeanor. Even when significant shareholders sought to influence the company in ways that collided with plans you and the management team were pursuing, you did not allow a crisis to develop. Indeed, a confident, calm leader is an antidote to chaos.
Your educational path is one I often recommend – eclectic. Frequently, students are urged to specialize, learning more and more about less and less. Your undergraduate work in physics, chemistry, and mathematics, followed by a master’s in business and a second master’s at the Yale School of Management, provides diverse content knowledge but as important, different approaches and methods.
CEO transitions are not easy and accompanied by a host of features that can quickly become disruptive. Congratulations to you and the board for the smoothness of this initial phase of the transition.
As attention will quickly turn to your successor, your role may seem less important, but nothing could be further from the truth. The way a leader departs is often overlooked in CEO transitions. You are proceeding in this transition with the same calm dignity you have displayed during your time in the CEO role. This provides an instructive contrast to what some CEOs do. That is, they stay too long at the party. Not only do they fail to orchestrate a healthy transition in partnership with the board, they resist it. This quickly becomes an emotional situation that drains energy, tests relationships and inevitably weakens the reputation of the company and tarnishes the legacy of the leader.
Leaders at any level can learn from your example. What can they learn?
Calm is contagious. A leader needs to be confident and if not, do what is necessary to get there. Good leaders know that they need to pressure test their ideas to guard against over-confidence. Calm confidence actually invites needed input.
Companies need a diversity of thinking. Organizations often seek diversity in a group when it actually starts in the mind of the leaders. Divergent thinking and pragmatism are a winning formula.
Merely because a person or company that has a financial interest in your business doesn’t mean they share your vision or strategic intent. Leaders must have an informed trust in themselves. Yielding to pressure that takes an enterprise off course is only to be done with good, strategic rationale, not as a reaction.
The selection and oversight of the CEO is one of, if not the most critical role of a board. It deserves the sort of attention and planning that it appears you and the board are giving it.
The human mind and memory are drawn to beginnings and endings. A new leader can take advantage of newness to signal future direction. A departing leader has a unique role in helping people feel proud of what has been accomplished and remind them of their capacity that will continue into the future. That is a gift of lasting value.