DiversityInc - May 2008

about her commitment to diversity, she states: “I live it, breathe it, every day.”

Nooyi is known for always being extremely well prepared, and she ensures that all her senior managers are equally primed. She sat down with DiversityInc recently for a frank discussion of her personal commitment to strengthening diversity management throughout PepsiCo and to assess how PepsiCo upholds its values globally.

NOOYI: We went through three rounds of inclusion training because inclusion is not something that comes naturally to people— you almost have to take them by the hand and say, “You probably don’t even realize this, but this behavior that you’re exhibiting doesn’t really smack of inclusiveness.” You can’t give them the Ph.D. course in inclusiveness on day one; we give it to them in bite-size pieces. I’m not talking

I’m NOT your NORMAL NON-DIVERSE

CEO. I am everything that this company has stood

for in diversity and inclusion; it has ALL COME

TOGETHER WITH ME.

DIVERSITYINC: How do you see PepsiCo evolving the business case for diversity?

INDRA NOOYI: The business case for diversity was made very well by Steve [Reinemund] and Ron [Parker, PepsiCo’s senior vice president and chief global diversity and inclusion officer] and the people who started the program. It was a journey because diversity is not something you do one year and say, “It’s over, the business case was made there.” What we need to do now is to create an environment where the place is inclusive so that those that come in feel like we’ve embraced them. We want to develop them so that they get out the message to other people and say, “This is a damn good company to come into.”

DIVERSITYINC: How are you leading the effort to do that?

about training white people to be inclusive; it’s training all groups to be inclusive of each other so you make each other recognize that what you thought was a joke before or a stray comment might actually be offensive to a group. What you do in your private life, we can’t control, but in the workplace, we want to make sure we have certain rules and principles in which we operate. We don’t want a situation where diverse people in particular have to park their true selves outside PepsiCo and come in and be somebody else just so they fit in.

It is mandatory training. It’s not optional at all, and senior executives go in the groups with each of the people so they know that we’re all walking the talk. We’re always looking at how we’re going to increase the reputation of the company, we’re always looking at the turnover statistics and how we’re developing our people in terms of

promotion metrics. At the end of the day, we can do a recruiting blitz and get people in, but if you can’t keep them, and keep them happy, then you really haven’t gotten the diversity-and-inclusion journey.

The turnover statistics have come down from low double digits to low single digits, which is a huge step, and that’s uniform across all groups. Early on, we actually calculated how many Fritos and Pepsis we’d have to sell just to pay for the turnover. That was part of the business case we made originally, to say, “Guys, two things: One, if you don’t tap into all parts of the work force to get everybody in, this company can’t survive, because it’s a war for talent there, and you don’t exclude certain parts of the work force.” The second case we made was to say, “We are a consumer business, and if you don’t tap into all walks of society who are consumers to design products for those consumers, then you’re really not doing the right thing by those consumers.” The third thing is the cost of losing somebody who has come into the company so high. Don’t just get them into the door; make sure you hold on to them.

My objectives to my board demand progress on all of those [diversity] activities. So, 50 percent of my bonus is based on people goals. I vest my people on those responsibilities, but I keep the overall ownership.

DIVERSITYINC: We’ve heralded your employee-resource groups as exemplary for years. How do you now take your employee groups to a different level in the workplace and the marketplace?