Organizations of all sizes need more of the entrepreneurial spirit that pervades the University of Maryland, PepsiCo Chairman and CEO Indra Nooyi said March 25, 2015, during CEO@Smith at the Robert H. Smith School of Business. “People often think that entrepreneurship is about the little guy, the garage tinkerer -- David going out to battle against Goliath,” Nooyi told a packed auditorium of about 400 faculty, staff and students. “I say 'no'. I think that view of entrepreneurship is incomplete.”
She said even Fortune 50 companies such as PepsiCo need entrepreneurial spirit to survive. “We need more of it,” she said. “Whether you want to bring new ideas to businesses, nonprofits or governments, don’t hold back because we need you.” Nooyi shared three traits that set entrepreneurs apart and that business schools should work to develop.
The first characteristic is vision. “Entrepreneurs don’t start out with a line of code,” Nooyi said. “They don’t start out with a prototype -- at least not the entrepreneurs that I know. They start out with a vision.”
Her vision for PepsiCo when she became CEO in 2006 was to deliver performance with purpose built on the pillars of human sustainability, environmental sustainability and talent sustainability. “It’s our simple idea that short-term profits need not come at the expense of long-term sustainable growth,” she said.
One example comes from India, where water conservation programs have allowed the company to be “water positive” since 2009. “Our team has managed to conserve more water than we use in order to make our products.”
The next thing entrepreneurs need is courage because they invariably run into resistance when they try to implement their visions. She said this happened at PepsiCo in the 1990s when the company started expanding its portfolio of brands into the health and wellness space.
“There were many who disagreed,” she said. “They were quite happy with the status quo.” The company persevered, and today it boasts a product line that ranges from soft drinks to healthier options such as Naked Juice.
“If you want to be an entrepreneur, you have to be willing to be bold,” Nooyi said. “You’ve got to have the courage of your convictions, and you’ve got to stay focused on the bigger picture.”
Passion for Diversity
Nooyi said entrepreneurs also must learn to work within diverse communities, where collaborators can consider problems from multiple angles and discover insights that otherwise would be lost. “Greatness is not an individual pursuit,” she said.
PepsiCo put this principle into action in 2011 when it partnered with the Inter-American Development Bank and local farmers in Mexico and elsewhere. The bank financed production of sunflower seeds, which PepsiCo purchased and converted into healthy oil for baking its chips.
“It was a virtuous circle,” Nooyi said. “We put into action an entrepreneurial idea that was good for business, good for consumers and good for society.”
After her remarks, Nooyi fielded questions from the audience. The next CEO@Smith will feature Barry Salzberg, global CEO of Deloitte Touche Tohmatsu Limited (DTTL). Registration is open for the event, which will start 5 p.m. April 13, 2015.