D SHIVAKUMAR – Chairman & Chief Executive Officer PEPSICO INDIA
Sir if you can just take us through your journey in Pepsi like you joined in 2013 and last few years Pepsi has also transformed itself in industry. So your journey in Pepsi the kind of challenges you face when you entered into the organization and the kind of initiative that you have taken to change the perception of the brand in the market?
The two assets which an FMCG company has is only the brand and its people. Over the last 3 years we have consolidated our portfolio into what we call the po1. We’ve consolidated our distribution into large scale distributors. We have made a big foray into digital marketing. So in the last few years you know we have won some 65 awards for digital marketing so that’s been a big shift. A lot of the journey has been in transforming the portfolio and the company for tomorrow.
So when you entered, I was going through some of your earlier interviews and we’ve seen that the kind of total management that you always believed in when you got into Pepsi, so what kind of leadership quality that you got involved when you joined and the kind of changes that you have done?
So if we look at it more broadly, 2/3rd of the company is millennials. Millennials need to work for a cause and a purpose ok and they want experiences. They are not people who are wedded to company for 15-20 years. So employees in today’s world are volunteers..they are volunteered to us at that team. If you do a good job as a good leadership team and provide a good culture then they’re. So the role of a leadership team and not just a leader in my book is to provide an emotional glue in the organization. Is to ensure that there is a sense of fairness and transparency in whatever you do because people come to work for 3-4 reasons. No.1 what is the purpose of the company why does this company exist? So our health and wellness journey is a very promising journey for millennials. .
Sir you said that it’s a collective effort of everybody in the ecosystem to make a company grow but don’t you think that a strong leader that drives his vision to the team is also an important factor in seeing that?
I think there a big difference to it. A strong leader in the past was seen as somebody who dictate orders follow through and get it done etc. Today you can’t do that. Today in a social world in a rapid quick digital world you have to collaborate and take people with you. So even though sometimes you know that people are taking time you just have to give them that time. So the power of leadership today is actually in orchestrating and coordinating. Not in doing things yourself. That’s the big shift. Because the world is so complex. If the world was leanier and slow then one leader can make a difference. A leader can make a difference in terms of the personal standard he sets in terms of work ethics performance etc. So if you’re a leader and you’re coming to office 10 o’ Clock then you can’t expect people to be punctual or stay focused. But if you’re a leader who comes in to office at 7:30-8:00 then everybody says that ok at least I can’t beat the leader and I need to respect him. So the model of the past and you know a number of people are guilty of it, a lot of leaders have either been dictatorial, no. 1, that’s one leadership style in India.
You have seen Indian economy has evolved over last decade or so and there has been a lot of good success stories. There are success stories which has not succeeded so much. So why do you feel where did those people went wrong or what are the changes that you think that Indian business environment or economic environment is showing?
If you look from 1991, some big sectors opened up. Before that we were controlled. The bulk of the employment happened in the garment. So if you went back to 1947, independence, most people joined the government services, why? Patriotism!! And the government was creating most jobs, whether it is PWD, whether it is IAS, IPS. We needed a lot of administrative capability to run this country. So we created a number of jobs. If you go to the 60s, there were a bunch of oil companies which we multinational oil companies, Multinational chemical companies based out of Bombay and government still were the attractive employers. You come to the 90s, then you had the multinational companies as being attractive. Now if you come to 2000 or the current context, the people who are creating the jobs are no longer government. It is the private enterprise, the Indian entrepreneur creating the jobs. If you look at it since 1991, some of the biggest companies which have grown bigger and brighter are the RELIANCE, the AIRTELs of this world, the banks, the icici bank the hdfc banks of this world. These are the people who have really garnered the big space in the Indian market. So today I think the market if wide open. As long as your focused on the consumer, as long as you have a good and sensible Business model, I think it will work. I think the mistakes people make is incur too much fixed cost to start, not having enough talented people and more important trying to do everything themselves. These are classic mistakes which leaders make whether in the private sector or public sector.
You’ve been in the industry for long before pepsi and other brands. You’ve seen generations of people working under you over the years, your advice to the current younger generation who’s gonna pass out from management schools or engineering colleges..what should they look for in their lives what if that something that they should always have in their..
I would say whatever degree you have, a degree is not a guarantee. You’ll have to work very hard for success. A degree at best opens the first door and maybe the first window of your career. So you’re from an IIM it might get you the first job, but finally it’s your performance which has to matter. So my first thing is don’t think of degrees as the answer. The true answer is in capabilities and skills. And In a fast changing world your degree will become very irrelevant in 5 years time. You have to learn and unlearn very quickly, like if you go back 10 years ago, digital marketing was not taught in any business school or any engineering.
Do you think today’s generation is a bit in a hurry in achieving everything probably in the shortest span?
I think entry generation can be accused of something or the other. So if you look at the current generation, they’re a very articulate generation, they’re the most articulate generation we’ve ever produced. They’re born with phones and tablets in their hand. So anything to do with digital they’re damn good they’re far better than anybody else. So I would say yes aspiration is not a bad thing to have. If you have ambition you have aspiration, there’s progress. And you lift the bar in the company or the team you operate in. Ambition should not be a naked ambition where you wear it on the sleeve to say I’m better than you. And that goes back to every generation of every successful leader must have humility and not arrogance. Arrogance is outward directed, i need to prove to you I’m better than you. The same thing inversely directly it is pride. I know I’m good I don’t need to tell you that I’m good. I think that’s the line that a lot of people don’t get right. The line between what is pride, you need to be proud of who you are, what you know and what you’ve achieved. But if you turn it to the external world that becomes arrogance. That is the thing that you need to watch. And the final thing I’d say about this current generation is… Because they’re so articulate, we’ll see more verbal duels and fights in the workplace, because they’re so articulate. So one of the things I would tell them is to listen a lot more. Don’t get into a verbal duel, Listen first before you get into a verbal duel. Because they’re so articulate, before you finish the question, they want to answer you. So I’d say listen a lot more, be reflective and then respond.
PepsiCo has been known for doing a lot of CSR activities like looking for the environment, society. As you say every organisation, every leader who wants to grow big has to think about the society. So what kind of CSR PepsiCo has been doing for last couple of years?
We’ve been doing a lot. If you look at our potato programme, we work with 24000 farmers. We bring in technology, give it to them, give them a firm price to buy it back. We help them with everything to do with their crop etc. Next, (18:25-18:26) plants are doing a lot of work in water conservation. Helping village people. So we have a lot of people who come from villages in and around our plant. So we’re making these people our brand ambassadors to go and do the work for us in terms of water. So we’ve mapped all the villages in and around our plants and asked them what is it that you want from PepsiCo. Somebody might say we want dustbins, somebody might say we want toilets, somebody might say we want computers for our school. So we try to be good citizens by asking them what they want and sent them.
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