Indra Nooyi, PepsiCo Chairman and CEO & Doug McMillon, Walmart President and CEO

Speaker 0:00 [ on-hold music] [audience applauding]

Doug McMillon 0:13 Let's see. Good afternoon.

Indra Nooyi 0:16 Good afternoon.

Doug McMillon 0:16 At Walmart, we tend to speak back to each other.

Indra Nooyi 0:18 [laughing]

Doug McMillon 0:19 We're gonna have some time in a little bit to, to talk, so please be thinking about what you might wanna ask us about. I'm really excited, Indra, that you're here.

Indra Nooyi 0:27 I am too.

Doug McMillon 0:27 They, they told me I couldn't come back unless I brought you with me.

Indra Nooyi 0:29 [laughs] And I said I'd come back only if you were gonna do it with me.

Doug McMillon 0:33 [laughs] Um, I wanna start with maybe the, the most important question, and that is when you were in, in your university, um, and you were playing cricket, what position did you play on the university team?

Indra Nooyi 0:44 [laughs] You know, first of all, do you know what cricket is all about?

Doug McMillon 0:48 I do not. And I do-

Indra Nooyi 0:49 Okay. So [laughs]

Doug McMillon 0:50 Still.

Indra Nooyi 0:51 It's not gonna make a difference what I tell you.

Doug McMillon 0:52 I'm not really very interested either.

Indra Nooyi 0:54 [laughs] Okay. Go ahead. Let me-

Doug McMillon 0:59 What, what position did you play, seriously?

Indra Nooyi 1:00 I opened the batting and the bowling.

Speaker 1:02 Whoo. Whoo.

Doug McMillon 1:03 Someone knows what that means. [laughs] That's really great.

Indra Nooyi 1:06 Are you impressed?

Doug McMillon 1:06 Leadership.

Indra Nooyi 1:07 Are you impressed?

Doug McMillon 1:08 I, I think so, yeah.

Indra Nooyi 1:09 Yeah. I was al- I was also captain of the cricket team.

Doug McMillon 1:13 That was kinda my point. She's a leader.

Indra Nooyi 1:15 [laughs]

Doug McMillon 1:16 I have known Indra for a really long time, and I was thinking about what words I would use to describe her, and some of them would be visionary, competitive, tough minded, caring. Um, Indra makes things happen. Um, she, she has a natural leadership characteristic that you have used not only to, to lead PepsiCo and in your previous roles, but you also influence Walmart in a big way.

Indra Nooyi 1:40 Mm. Appreciate it, Doug, but let me give you the compliment back. Doug and I know each other for a long, long time, and I've always referred to Doug as not just Doug McMillon, I've called him Doug McMillon Walton because he represents the best of Walmart, the values of Walmart. And believe me, even though we're a generation apart in age, Doug, I've learned [laughs]

Doug McMillon 2:01 I'm not sure.

Indra Nooyi 2:02 I'm much older. I've learned so much from Doug, the way he operates this large company and is repositioning it. So I think this is a two-person backslapping society, and I'm the charter member of it.

Doug McMillon 2:13 [laughs]

Doug McMillon 2:14 So as we think about what these people might be interested in or benefit from the most, the first thing that comes to my mind is change. And I know your business well enough and know what you're thinking well enough to know that you're, you're facing a situation where the world is changing very dramatically, people are changing, the environment you're operating in is changing, and you're trying to position PepsiCo for the future. So maybe we start out with talking about, you know, what do you see that, that convinces you that PepsiCo needs to change, and what is it that you're trying to accomplish during your tenure?

Indra Nooyi 2:48 I mean, it's, uh, many questions nested in one, but let me take a shot at it. Um, I think every company today, the CEOs of every company are looking at the environment and then sort of the investor expects you be, expects you to be this duck that's just sort of, uh, swimming across the water. And in the past, these ducks would sort of furiously, uh, swim underneath the water just to move ahead. Uh, now it's like you've got to paddle on steroids because the pace of change is so enormous that you've got to paddle even faster just to make small movements. Um, and nobody's gonna give you a break and say you can slow down or you can actually stay in place for a while. What's changing? And I'll talk about the food and beverage industry because in a way our interests intersect there. Every aspect of the business is changing. Um, what is healthy food is changing. What do people want to eat and drink is changing. Um, w- how should products be labeled has not been defined. There's no authority that defines it. Um, supply chains are globalizing, yet traceability and safety standards have not been established. There's an NGO in every corner. So there's somebody there calling us out when we don't do things right, but then there's no standard to look at in terms of what we need to do right. Um, the retail environment is changing, whether it's the emergence of Walmart in the '90s and the year 2000s or now the hard discounters and the emergence of e-commerce. Everything about the world is changing. And then right here in Silicon Valley, all of the bri- best and brightest that we want in our companies are being recruited by these startups, so we have a tough time recruiting the right talent to run our companies. I speak-- I'm speaking to all of you. So I think what happens is that, um, we are facing unprecedented change in our business models. And on top of that, we have to globalize, but the world is a tough place right now. We've got, uh, economic volatility, macroeconomic crises in many, many places, pol- you know, political upheaval. So I think companies like ours, um, if you really wanna keep performing, you've almost got to change your model all the time. And, you know, Klaus Schwab of the World Economic Forum talks about this and says, "You've always got to be in beta." It sounds wonderful as, as a set of words, but when you actually have to practice in the company, it's pretty scary. Because it's not motivating a small group of startups or a small group of employees who have the same thinking that you do. We have 260,000 employees, and

Indra Nooyi 5:21 when you decide to zag instead of zig, you've got to tell them what you're gonna be doing, why you're doing it, how it's gonna impact them, and why they all have to come along with you on the journey. Give you-- let me give you examples. When we decided to change our product portfolio to go from a predominantly fun for you product line to including more better for you, good for you products, different profitability, uh, very different product line, closer to agriculture, um, change the model in the company. Our employees sat there going, "What is she doing? Why do we have to change? We're doing pretty well selling these products. Why do we have to change?" But the challenge of the leader is h- looking around the corner and making the change before it's too late to make the change. I remember as late as 2007 or 2008 going to see investors, and they looked at me and said, "Why do you have to change your portfolio? Um, we are American. We like soda and chips. Your job is to sell more soda and chips." And I sat there in shock because every trend that I was seeing indicated that the consumption of these categories was slowing down. And I looked at the investor and I said, "Have you changed your eating and drinking habits?" And that person said, "Yeah, but forgive me, I'm not the c- normal consumer." I said, "The problem is many consumers are like you. They've changed their eating and drinking habits." Today, that same investor says to me, "Why can't you go faster? Why are you so slow at making a portfolio change?" It's because people like you were the ballast for me. You didn't let me go faster 'cause you always criticized what I was doing, all right?

Speaker 6:53 [laughs]

Indra Nooyi 6:54 But you, you know, but that's reality. So I think we are in a world of unprecedented change, um, where companies, the CEOs, the DNA of the company has to change, and we all have to change at a point when short-termism abounds. Everybody wants results today. And, you know, the, the tolerance that you have to make the change on a large scale is not there. And I'm sure you're facing the same issues, Doug, and I mean, I watch it in action at Walmart. So tell me a bit about what you're going through.

Doug McMillon 7:26 I wanted to ask you the questions.

Speaker 7:27 [laughs]

Indra Nooyi 7:28 [laughs]

Doug McMillon 7:28 I already have ano- I already have another one.

Indra Nooyi 7:30 Either way.

Doug McMillon 7:30 I, I think it's very similar.

Indra Nooyi 7:32 Yeah.

Doug McMillon 7:32 I mean, you, you know where you are, and you develop a vision for where you need to be, and trying to get from here to there is the hard part. I, I feel like that the vision that we have collectively is improving all the time, but turning around and moving an organization that's older than 50 years, that was built for a certain purpose with 2.3 million people is, is a big part of the challenge. And last time I was here, I, uh, I admitted that I have, uh, envy for those that are at a startup because you can write your culture on the wall or your values on the board, and you can go that direction. You get to, to create something rather than change something, and changing something feels harder. And then I said to anyone who wants a great challenge, let me know, and we'll hire you at Walmart. I had one person call me. [laughs]

Indra Nooyi 8:15 Mm.

Doug McMillon 8:16 Um, so it's, you know, it is hard, and I think that these people are smart enough to figure that out. Um, but I'm-

Indra Nooyi 8:21 That's true

Doug McMillon 8:22 ... uh, let's go to learning.

Indra Nooyi 8:23 Mm.

Doug McMillon 8:23 Um, you mentioned that, you know, you're, you're seeing the, the, what you believe the, the company should become. You didn't arrive in this position knowing everything that you know now. How do you go about learning as an individual and using the knowledge that you're picking up to shape the future? Because as you know, the strategic planning cycles are gone now.

Indra Nooyi 8:46 Yeah.

Doug McMillon 8:46 It's strategy is being shaped hourly, not, not annually.

Indra Nooyi 8:50 Uh, the one big lesson I've learned, Doug, is that if you just depend on the traditional strate- st- uh, strategic planning cycle or depend on standard set of consulting reports, you actually are gonna do your company a big disservice. And as CEOs and leaders have to be lifelong students, and not just students in the sense of attending courses or reading a book or two. You've got to learn how to read widely, walk the market, look at trends in the marketplace, make connections that don't seem obvious, and start to paint pictures of what the future could be. And, um, then watch consumer behavior. I'll give you an example. 10 years ago, or maybe 15 years ago, if you came to PepsiCo and looked at all the beverages that were being served on the side tables when we're having meetings, um, most of the people would be consuming full sugar beverages. About 10 years ago, the trend shifted, or may- m- uh, maybe 20 years ago, they were drinking full sugar. 10 years ago, they shifted to diet drinks, okay? Uh, about five years ago, they were drinking more bottled water. Now, the point that I'd make to my guys is, "Guys, don't ... You don't need to hire a consultant to tell you where the trends are. You just have to look at our side table." Remember the number of facings we used to have for regular sugar Pepsi versus Diet Pepsi versus bottled water now? If you're all drinking bottled water or drinking zero calorie beverages, why do we think we're not representative of the consumer? Very often, I think what happens is we separate out the consumer out there from the consumer in us. We are the consumer, and the more we can bring the two together and say, "We too are representative of the consumer outside," I think it would be better. We go out and, you know, our children play with other children. We see other families, and when they moderate certain products that we sell in terms of what's given to kids, that's a trend, okay? So we've got to watch all of these things, and too often, I think us leaders think what consultants tell us or what certain reports say or certain books say is the gospel. It's really not. We have to become our own data collectors, data analyzers, and then shape creators, and I think that's the toughest thing because people who are rewriting the rules, um, have to create the shapes, and people don't like that because they have a traditional model of how things work, and they hate people who are t- who upset status quo, and I think both of us are upsetting status quo in a big way. And, you know, it's tough, but it's fun.

Doug McMillon 11:27 It is. It, it's hard sometimes to take your kind of business hat off and be a customer or a consumer, and I'll admit to when I'm, when I'm working, like yesterday, I went to Palm Springs and visited a Super Center. I'll put my Walmart badge in and, on, and I walk into that store, and I have a certain mindset. On the weekend, I went shopping because we needed milk and some things at home, and my vision of that store-

Indra Nooyi 11:50 Did you go to a Walmart?

Doug McMillon 11:51 Of course. [laughs]

Speaker 11:53 [laughs]

Indra Nooyi 11:53 [laughs] Just checking.

Doug McMillon 11:58 I'm not stupid. I mean, I ... [laughs]

Indra Nooyi 12:01 [laughs]

Doug McMillon 12:01 But I just experienced out of stocks differently.

Indra Nooyi 12:05 Mm.

Doug McMillon 12:05 E- everything, you know, felt different, and staying objective and being in the moment is something that I, I think I need to continue to work on-

Indra Nooyi 12:11 I do market tours

Doug McMillon 12:11 ... whether it's on a mobile app or the store.

Indra Nooyi 12:12 Yeah, I do market tours every weekend. The first few years that I was a CEO, I'd take pictures of what I saw in the store, and I'd download it to my, uh, people and say, "There's out of stocks here. This doesn't look right." I mean, I'd show up, go on market tours sort of about a two, three-hour radius from my home. Then I realized that every division in the US had some people waiting in the office for my emails to respond to that quickly, and I, I, I thought it was a terrible way to run a company, that the CEO's out in the market and you've got a SWAT team sitting in the office waiting for the lousy photographs to come in. So I stopped sending the photographs, but I still do the market tours, and I agonize over it. Just like you, I go, "Why is the Gatorade out of stock when the temperature's 75 degrees?" And, "Why don't we have a second delivery?" Or, "Why don't we do a second delivery of Frito-Lay products when we have a holiday weekend?" Uh, now I'm learning to just agonize internally and then dump on people Monday.

Doug McMillon 13:10 [laughs]

Indra Nooyi 13:11 It's very difficult. [laughs] It's tough, I gotta tell you. It's tough. But, you know, when you do that, you really experience your business from, uh, the consumer's eyes or the retailer's eyes, because I know how you care about out of stocks. So when I go to the Norwalk Walmart or look at the s- shelf and I see out of stocks, I feel for you. As I do for me. [laughs]

Doug McMillon 13:34 Our in stock's up, by the way.

Indra Nooyi 13:35 Yeah.

Doug McMillon 13:36 Um, let's talk about design for a minute.

Indra Nooyi 13:39 Mm.

Doug McMillon 13:39 A month or two ago, we were talking on the phone, and you tried to get me to go to Italy or M- was it Milan?

Indra Nooyi 13:44 Mm, the Milan Design Show.

Doug McMillon 13:46 Which I thought was kind of a surprising invitation.

Indra Nooyi 13:50 Mm.

Doug McMillon 13:50 I don't get invited to Milan very frequently.

Indra Nooyi 13:52 [laughs] You m- you missed a great one.

Doug McMillon 13:54 Tell ... Why did you go, and why were you thinking that I should also be there?

Indra Nooyi 13:58 Do you know anything about the Milan Design Show?

Doug McMillon 14:01 Only what you told me on the phone.

Indra Nooyi 14:02 Huh. Okay. Um, let me tell you, a few years ago we started a design capability inside PepsiCo. What do I mean by design capability? And I have to tell you a little story before I bring you, um, into the design loop. When I first became CEO in 2006, as I looked at our products, I looked at our packaging, I looked at how we put things on the shelf, I thought they were singularly all right, and in some cases unimpressive. And I thought that we needed a dash of design thinking in the company. So I gave all of my direct reports, about 16 of them, a photo album, a blank photo album, and a camera, and I said, "For the next three months, I want you to go around taking a picture of anything that you think constitutes design. Anything. Could be a pencil. It could be a, a clip. It could be a teapot. Anything. Anything you want. Just fill this book for the next three months and give me a copy so that ... uh, give it to me so that I know what, what the issues are I have to handle in terms of design thinking." Here's the surprising finding. Uh, half the people didn't turn the book in at all. Half, half the executives. The few that turned it in, c- few of them had their wives fill it in for them. [laughs]

Doug McMillon 15:14 [laughs]

Indra Nooyi 15:14 Uh, two executives hired a professional designer to fill the book in. [laughs]

Doug McMillon 15:18 [laughs]

Indra Nooyi 15:18 And told me they did. But the few that actually filled in the book, I still have them with me as a memento of how bad we were. Uh, it was a horror because, uh, uh, what they thought was design was not what design was. So let me now tell you what is design. To me, design is something that you embed into a product or a service or an offering that romances the consumer and draws them to the shelf or to the product or to the service or whatever it is. It's how you think about the shape of the product, how it's presented, how it's talked about. Not just the color of the package, everything in terms of the experience that actually draws the consumer in. And we never thought about design that way. We thought about it as, is the yellow on the Lay's bag right? Should we put an extra swirl of red, or should we put an extra emoji on the Pepsi bottle? So our definition of design was very, very, I hate to use the word, but primitive, and I was part of that group. So we all went to design school and learned all about design, not in terms of the package, but all the way down into design of the product. Example, um, when you eat Doritos, how many of you are Doritos consumers here? I love it. [laughs]

Doug McMillon 16:35 So, you know, when you eat Doritos, um, when you get to the bottom of the bag, a typical guy would take the Doritos bag and just do this.

Indra Nooyi 16:43 [laughs]

Doug McMillon 16:43 Okay? Because you, you sort of eat the crumbs that way. Women don't do that. Women try to be very delicate, putting their hand in, taking the last Doritos, but then you're leaving about 5% of the Doritos in the bag, okay?

Indra Nooyi 16:55 [laughs]

Doug McMillon 16:56 But because there are little crumbs there which taste awesome.

Indra Nooyi 16:59 [laughs]

Doug McMillon 16:59 But in our package design, why don't we figure out a product design for Doritos that is completely different, that a woman can actually put in a purse so it doesn't crumple, and you can actually eat it in a more delicate way, but all the way down to the last 5%? I'm using Doritos as an example. Indra's solving real world problems here.

Indra Nooyi 17:17 [laughs]

Doug McMillon 17:17 Right in front of you.

Indra Nooyi 17:18 Doug.

Doug McMillon 17:19 This is good stuff.

Indra Nooyi 17:19 [laughs] Doug, I gotta tell you, if I solve the problems, you get more sales.

Doug McMillon 17:24 [laughs]

Indra Nooyi 17:25 [laughs] So it is a real world problem. At the end of the day, I worry about one thing.

Doug McMillon 17:29 [laughs]

Indra Nooyi 17:30 Growing my sales with Walmart. [laughs] But, but leaving that aside, so that's an example of how you take design thinking all the way to the product design itself. Um, the other is when you think about a food service machine. In the past, you know, we had the standard machines, and now with the new Spire machines we have, which are slowly rolling out, um- You can have almost 4 or 500 variants, but the machine looks like, uh, a beautiful, beautiful iPad,

Indra Nooyi 18:00 but even more on, uh, in, in an aesthetically pleasing way. And so you bring design into a day-to-day experience that was quite boring. So that's what design thinking is doing to PepsiCo. We've got amazing designers we've hired. In Milan every year they have a design week where everything from furniture to lighting to, uh, day-to-day products, uh, you see the best of design from the best designers showcased all around Milan. The whole city becomes a design, uh, sort of a, um, a bazaar of designs, and it's just a phenomenal experience to go there and just see what's going on. And the last few years, I'd say three years ago, I just visited, uh, Milan for the first time from, from a design perspective. Two years ago we started to build a Pepsi design experience where we actually had a, a big warehouse that we convert to design experiences with PepsiCo products. So we had an experience called the Fizz. It looked like a Willy Wonka and the Chocolate Factory. Um, you know, how do you make your own, uh, soda with all kinds of toppings? It was a fabulous experience. Uh, we had, um, Lipton Pure Leaf Tea. How can you serve tea in an authentic way in almost like a tea house cafe? Um, what can you do with, uh, the Gatorade, uh, bottle, the new bottle with the sensors, uh, that athletes can now drink and it'll s- uh, you know, sense your saliva and tell you exactly what extra electrolytes you need to put into your body? So we showcase some of the stuff in a very, um, uplifting way, and what was, uh, wonderful is the big magazines, the design magazines wrote that there were two exhibits that stood out in Milan this year from a consumer perspective. One was Nike and the other was PepsiCo, and so I thought we'd landed. It was a great ... Uh, you missed a great one. Next year.

Doug McMillon 19:53 [laughs]

Indra Nooyi 19:54 Next year.

Doug McMillon 19:54 Next year.

Indra Nooyi 19:54 Next year.

Doug McMillon 19:55 That's a lot of progress.

Indra Nooyi 19:57 It is.

Doug McMillon 19:57 From one story to the next story.

Indra Nooyi 19:58 And, and I'd like you to visit our design studio sometime. Phenomenal designers. We have a long ways to go, Doug, a long ways to go, but we're making progress.

Doug McMillon 20:06 Yeah. I think it's gonna matter to us. You know, it feels like what's happening in retail is that the, the needs that customers have, um, are being outsourced to the internet, whether it's mobile or voice or whatever comes next in the future. Increasingly so, people are not going to have to think about staying in stock on Pepsi.

Indra Nooyi 20:25 Yep.

Doug McMillon 20:25 It's just going to happen, and we're gonna play a role in that process through our supply chain. But on a-

Indra Nooyi 20:30 But, you know, even on a something like a Pepsi, if we keep thinking of it as the cola that was invented in 1893, um, that's like being the custodians of a utility. That's not the business we're in. Question is, how do you bring excitement into this category again and again because this is a heritage brand? So we're doing several things. Whole range of craft sodas.

Doug McMillon 20:53 Wow.

Indra Nooyi 20:54 Uh, lower sugar offerings. Uh, trying to, uh, you know, make Pepsi more of a make my own, um, h- uh, beverage at home. So we're playing with Pepsi in so many ways. 1893, the new, uh, cola that we launched as a craft soda, doing very well where it is. Um, the Make My Own Pepsi that's being sold, interesting consumer base it's bringing in. Uh, and the lower sugar offerings of Pepsi with great taste will go into the market. Will they all be as blockbuster as the original Pepsi? Probably not, but they will stem the decline of a category while we launch all kinds of new beverages on top. So, so-

Doug McMillon 21:32 The emotional component, not just the utilitarian-

Indra Nooyi 21:35 That's exactly right

Doug McMillon 21:35 ... aspect of your product.

Indra Nooyi 21:36 Yeah, because Pepsi is not a, it's not a drink. It's an experience. It's a brand that is time, timely, I would say, because it defines culture, it defines sports, it defines music. Um, and I still remember a famous music producer in California once said to me when I ran into him, he said, "You know, I don't have any young musical artists that are worthy of a Pepsi contract." That's a big statement, that are worthy of a Pepsi contract, because to be associated with Pepsi, that launched so many young faces, was a big thing.

Doug McMillon 22:08 Right.

Indra Nooyi 22:08 Whether it was Michael Jackson or Britney Spears or Madonna or Christina Aguilera, they all made their success working with Pepsi. They were known as Pepsi stars.

Doug McMillon 22:19 Mm.

Indra Nooyi 22:19 And so he said, "I don't have any young people that are worthy of a Pepsi contract." So the Pepsi brand is absolutely, um, associated with culture-defining moments, and so we have to figure out how to make the product come in tune with the brand even more as the consumer changes.

Doug McMillon 22:37 You can probably pick up on some of the themes, but what happens is as companies get older and larger, they start specializing within the business, and it replicates what you've done before. So in Walmart, we have logisticians and merchants and marketers and lawyers, and everybody specializes, and you end up with these silos that are, um, by design in some instances, created to just keep doing what you're doing. And then disruption happens, and you have to figure out how to take an older company and a larger company and change it back to being more entrepreneurial, move with speed, and change it. And you can hear those themes in Indra's story, and it's the same in our story, and I think a lot of what we're believing at the moment is that we're gonna help transform the company using technology. We can hire talent. We have hired talent. We can invest and do a lot of that, but over time, what will differentiate us and ultimately en- enable us to win and have a role to play in society is still humanity. It's still our culture. It's still our people, but getting from where do we, where we are now to there will require cultural change in addition to advancements in technology, and that's an interesting business challenge to take on when you're at our scale.

Indra Nooyi 23:52 I think the big question for all of us, Doug, is, you know, there's been a lot written about you've got to preserve the history and the heritage of the company. While you make the change. Sometimes I wonder if it's a ballast, and I'll tell you why, because yeah, you should respect the heritage, you should respect the culture, be cognizant of where you came from, but I'll speak for myself. Um, I'd say maybe I was a little too respectful of the heritage and culture. Because, uh, what happens is when you have companies where people are in the company for a long time, and PepsiCo's got a lot of long tenured employees, they've come into PepsiCo young, they retire from the c- company, and then as they leave the company, they still remain attached to the company, and they are talking about PepsiCo all the time. At some point, you've got to make the break. You know what I'm talking about.

Doug McMillon 24:41 Yeah.

Indra Nooyi 24:41 They still think they're part of the company, they're running the company, right? And so this book club has to be kept happy. But I don't think you should let them run the company.

Doug McMillon 24:50 Yeah.

Indra Nooyi 24:50 And in many ways, you've got to make a break with the past, because if you don't, you're spending more time appeasing the heritage employees and the heritage voices, as opposed to saying, "Guys, we don't have the time. We have to make the change."

Doug McMillon 25:07 Right.

Indra Nooyi 25:07 And guess what? It's gonna be painful.

Doug McMillon 25:09 Yeah.

Indra Nooyi 25:09 But the sooner we make the change, let's do it. And the one thing I learned, again, I'd say I was maybe a little bit more patient than I should have. When you know you have to make a change and people don't come along, you wait for a little while, but then after that, at some point, you've got to say enough is enough. You know, every third week there's gonna be a series of retirement parties, you're out. 'Cause if we don't do that, again, the people who've been in the company 20, 30 years pull you down, and they create sort of environments of saying, "Oh, the good old days were great." And people start to believe that there's still those good old days that could exist when they really can't. And I think, uh, if I had to do it all over again, I might have hastened the pace of change even more.

Doug McMillon 25:57 Seize that opportunity to actively shape the culture.

Indra Nooyi 26:00 Yeah.

Doug McMillon 26:00 Yeah.

Indra Nooyi 26:00 And then say, "You know what, guys? I'm not gonna sit here, uh, doing workshop after workshop and trying to convince you to come along. I've tried. You're either in it or you're out." And that sort of, uh, brute actions I didn't take.

Doug McMillon 26:18 One of the things that, that gives us a chance to make it through this transformational period is that our founder loved change. And while we can respect the past, you must invent the future. And m- our founder passed away in 1992, but the one thing I know for sure from being around him a little bit-

Indra Nooyi 26:35 Mm

Doug McMillon 26:35 ... and from all of the, the stories and experiences, is that if he were here today, he would be changing things. And it gives you that mandate. You know, you can stand up in front of a group of Walmart associates and you can say, "The only thing that's constant at Walmart is," and the group will say back, "Change."

Indra Nooyi 26:50 Mm.

Doug McMillon 26:51 And that gives you an opportunity to say, "Okay, let's talk about what we need to change, why we need to change, and what, what this is aimed towards. And if we don't, we're done. It's only a matter of time. You have to change."

Indra Nooyi 27:02 Change is scary. Change is very, very scary, especially when you're leaving the comfort of a large company where, you know, you've had fabulous salaries, benefits, pension, uh, plan that was terrific, and all of a sudden you're gonna be cast out.

Doug McMillon 27:17 Isn't it interesting? It's perceived safety.

Indra Nooyi 27:19 It is.

Doug McMillon 27:19 But it's actually the opposite. This, the safety of a career of a company, the future's actually on the change side of things, not on the status quo.

Indra Nooyi 27:29 But if you know that you have a role in the change, you embrace it.

Doug McMillon 27:33 Right.

Indra Nooyi 27:34 But if you don't know if you have a role in the change or because you're sure you don't have a role because you don't have the skills-

Doug McMillon 27:39 Yeah

Indra Nooyi 27:39 ... it's a problem.

Doug McMillon 27:40 So communication today is different.

Indra Nooyi 27:42 Totally.

Doug McMillon 27:43 Um, I joined Facebook last week.

Indra Nooyi 27:45 Mm.

Doug McMillon 27:45 Been on Instagram for a while.

Speaker 27:47 [laughs]

Doug McMillon 27:48 What do I need to be on next?

Indra Nooyi 27:49 [laughs]

Speaker 27:51 [laughs]

Doug McMillon 27:51 Snapchat's next. There'll be something after that probably.

Speaker 27:54 [laughs]

Doug McMillon 27:55 But, you know, Sam Walton was not on Instagram or Facebook.

Indra Nooyi 27:58 Mm.

Doug McMillon 27:58 And I know I'm a little late to the party, but there's power in it, and it's, it's all about getting the word out on why are we doing what we're doing and, and what is it that we're trying to accomplish, and giving people a voice. You know, communication is not one directional, it's multi-directional.

Indra Nooyi 28:12 I, um, I'm just on Twitter and I'm scared to death.

Speaker 28:15 [laughs]

Indra Nooyi 28:15 'Cause I have no idea what's gonna happen. Look, for you kids, you're reckless, all right?

Speaker 28:20 [laughs]

Doug McMillon 28:20 [laughs]

Indra Nooyi 28:21 For us, for us CEOs, it's, it's terrifying because if you make one mistake on tweeting one word out, there'll be millions of people who sort of kill you in the public domain about how dare a CEO say what they do. I'm envious of my kids because the stuff they tweet out and the stuff they put on Facebook, oh my God, scares me to death. But you know what? This is the great thing about being young. What they don't know yet is all of that is gonna follow them for the rest of their lives. [laughs]

Speaker 28:50 [laughs]

Indra Nooyi 28:50 You know, that's the tough part, Doug, you know. You and I don't have anything to worry about. [laughs]

Speaker 28:56 [laughs]

Indra Nooyi 28:58 Doug, I wanna ask you a question. How do you manage to be CEO of Walmart, living in this small town where every move that you make is tracked all the time?

Doug McMillon 29:09 [laughs] What do you mean?

Indra Nooyi 29:11 [laughs]

Speaker 29:11 [laughs]

Doug McMillon 29:11 Tracked. You mean everybody knows everybody? Like Mayberry?

Indra Nooyi 29:15 [laughs] Something like that.

Doug McMillon 29:16 [laughs] Um, I-

Indra Nooyi 29:17 Little bit bigger than Mayberry, yes.

Doug McMillon 29:19 Yeah. We live in a cool place that's actually changing a lot, but it's still small.

Indra Nooyi 29:23 Mm.

Doug McMillon 29:23 And it's, it's a bubble. It's not like the rest of the world in some ways, and so it's really important for us as leaders to be out, and we, we travel a lot. We're all, all over the world. But go back to this really small place where if you go to the Walmart, which I do, everybody's like, "Hey, Doug, how you doing?" People follow you around the store to make sure everything was in stock, you know.

Indra Nooyi 29:44 Right.

Speaker 29:45 [laughs]

Doug McMillon 29:45 Um, so we have to be cognizant of the bubble and not let it cause us to be comfortable. It's not the most competitive market in the world.

Speaker 29:54 [laughs]

Indra Nooyi 29:56 [laughs] That's very true. You know, when I go on market tours, it's the same thing. They set up the market for me, so I always see the perfect execution. So now when I go to any city and they say, "Oh, we're going to the following three cit- uh, streets to do a market tour," I go, "Guess what? I'm gonna decide where we're going."

Doug McMillon 30:12 [laughs]

Indra Nooyi 30:13 And now they're terrified because I could pick a place that's completely off the beaten path, and I don't wanna see a prepared market. I wanna see the market as it exists-

Doug McMillon 30:22 Yeah

Indra Nooyi 30:22 ... normally for the consumers.

Doug McMillon 30:23 That's why we don't tell stores we're coming when we-

Indra Nooyi 30:25 Right

Doug McMillon 30:25 ... like yesterday when I popped into the store. One, one associate told me once, "Doug, you're just like the Queen of England." [laughs]

Indra Nooyi 30:31 [laughs]

Doug McMillon 30:32 And I said, "In what way?" And they said, "Everywhere you go, you smell fresh paint."

Indra Nooyi 30:35 [laughs]

Doug McMillon 30:38 [laughs]

Indra Nooyi 30:39 That's a good one.

Doug McMillon 30:40 You gotta remember that, right?

Indra Nooyi 30:41 Yeah, yeah.

Doug McMillon 30:41 You gotta remember that and s- and stay real. Um, I think we got time for maybe one more subject.

Indra Nooyi 30:46 Mm.

Doug McMillon 30:46 And, and the one I'd like to pick is, uh, making a difference in the world. So you've ended up in this position. Probably growing up as a kid, you knew, "I'm gonna be the CEO of PepsiCo." I mean, you probably knew that.

Indra Nooyi 30:57 [laughs]

Doug McMillon 30:57 But now you find yourself here.

Indra Nooyi 30:59 Mm-hmm.

Doug McMillon 30:59 And you have this responsibility, um, and this platform really to try and make a positive difference in the world. How do you think about that, and how do you help lead the board and your management team towards making that difference, and what's it mean to you personally?

Indra Nooyi 31:15 You know, Doug, I'm, the more I've delved into this whole area of making a difference, sustainability, I'm convinced that unless you feel it, unless you feel it deep down in your heart and you really understand it, you'll be doing lip service to the whole area of sustainability. In my case, I grew up in Madras in India, where at, at those days, and even today I think, there, there wasn't much water in the city. And we had so little water to live on every day, um, that this whole notion of water availability and water use, um, was a crisis for me all my life. I didn't know a time when water was aplenty until I came to the United States, okay? Um, so water was seared into my head. The second is we grew up eating and drinking a certain way. Um, and all of sudden, I realized that as you look around the world, as you look around all of the, uh, health issues around the world, food played a very important role in people's health and wellness. So, you know, one had to worry about that aspect too. Uh, and then my daughter went to work for the Environmental Defense Fund, EDF, and I got a whole new appreciation for all of the environmental issues beyond water. Uh, whether it was the carbon footprint, whether it was fisheries, whether it was any issue, she would actually show me all of the, uh, statistics, what it was doing to the world, overfishing in certain coasts or plastic in oceans. And when you start to really feel these issues and think of what your kids and their kids, you ask yourself, "What is my role as a steward of a large company to make a difference in the world through this incredible platform that I have called leader, leader of a big company that could either contribute to the issues or help alleviate the issues?" Um, I knew that I didn't want to contribute to the issues. I had to start helping the issues. And to the extent that society had changed and I was perceived as contributing to some of the issues, I had to make a change to my business model. Therein was born our notion of performance and purpose, which is how can we keep performing while changing the portfolio, while fundamentally changing our environmental footprint? And then the third one, which is really the one that I am most excited about, is what can we do for our employees so that they can come to work at PepsiCo feeling like PepsiCo is a place where you can not just make a living, but have a life, so that you can bring your whole self to work, the company treats you in a fair and equitable way, provides you the support system to be who you are, to allow you to be who you are, and we embrace you completely. Uh, and so, uh, performance and purpose is not a corporate social responsibility program. It is not. It is how we make money, because our belief is if we don't change the portfolio, we can't keep delivering performance. If we don't change our environmental practices, we won't get a license from society to operate, and our cost goes up because we pay for water, we'll end up paying more for plastic recycling. So we have to do that. And if we don't get the best and brightest in terms of people, we won't be able to deliver performance. So performance and purpose is how we make money, not how we spend the money we make, which is what corporate social responsibility is all about. So that's really what we're all about.

Doug McMillon 34:36 Very well said. We see it the same way.

Indra Nooyi 34:38 Yeah.

Doug McMillon 34:38 And I feel the same way. We wanna open it up for questions. Fire a difficult one to Indra, if you could, to start us off.

Speaker 34:44 The, the first question comes from Twitter, and it's actually to you both, and it's a classic. Um, what organization and what leader do you most admire and why?

Doug McMillon 34:53 [laughs]

Indra Nooyi 34:56 [laughs]

Doug McMillon 34:57 Need time to think. Um, I got to be around Sam Walton a little bit. Sam was the founder of Walmart. He's the first person that comes to mind. Um, there are a lot of positive characteristics there that we're still trying to live up to, to today. Um, in terms of who I admire at the moment, um, rather than one person, I think I would characterize a group of people. One of the awesome things about what we get to do is we get to meet a lot of leaders, and what comes to mind is that there are people out there that are genuinely taking risk to try and make the world a better place. And this would be a very logical time to play it safe. It'd be a very logical time to try and stay off the radar screen, but sometimes you gotta step out there, and you've gotta put some personal equity on the line and try to change something, and there are people that are doing that. Some of the CEOs that, that live in this part of the world are doing things like that to try and, and, uh, improve the world, and, and I admire that.

Indra Nooyi 35:53 I'm gonna give you two. Um, one is, you know, something that sounds tested and tried. When I became CEO, I called Steve Jobs and I said, "I'd like to spend a little bit of time with you and just to sort of, uh, Understand what it is to run a company the way you've changed it, and he graciously agreed to spend some time with me, and he gave me two or three hours, I think, of his time. And some of the lessons he taught me about design, how do you take something that you truly believe in and stick with it as opposed to changing your point of view because the outside world wants you to change your point of view, uh, were phenomenal lessons that he was so gracious to give me the time and that he gave me those lessons I'll never forget. I think the world lost an incredible person in him. He did tell me a few things like, "Don't be too nice. When you really don't get what you want and you really believe that it's the right thing for the company, it's okay to throw a temper tantrum. Throw things around. You will ... [laughing] You know, people will talk about it, and they'll know it's important for you." And I think that itself was a valuable lesson. [laughing] In terms of ... I honestly believe that. In terms of people I admire, I tell you the people I've begun to really admire these days are people who head up these NGOs because they don't make much money. In fact, they barely make ends meet, but yet they feel so deeply committed to a cause. Uh, they do the research. They go visit companies in their headquarters. They'll do goofy things, but you know what? It's goofy if you look at it strictly from the, uh, point of view of they're bugging me. But if you look at it through their eyes, you know, walk a mile in their shoes, you have to be proud that they feel so strongly that they wanna make the world a better place. So all of these people who run NGOs, even though one side of me says, "God, I wish they didn't have such a big megaphone," the other side of me is so proud of what they do, and I think we're all gonna change and become better companies because of their leadership. Yeah.

Doug McMillon 37:49 Who'd like to go next? How about right here?

Speaker 37:52 Hi, my name's Nadu Lawson. I'm an MBA, too, here. Um, my question for you was you mentioned international growth before, and I'd love to hear how PepsiCo and Walmart are thinking about the African market, um, specifically in the mid and long term. What do you think you're going to have to do differently to win the c- consumers there?

Indra Nooyi 38:14 You know, I'll tell you, um, PepsiCo in Africa doesn't have as big a footprint as we would like to have, uh, but I think it's an actually, uh, uh, wide open market in so many ways, and I'll tell you why. Uh, the African consumer is, uh, you know, the economic plight of the African consumer is improving enormously, so that's a very good thing. Second, uh, the continent is hungry for, you know, the right supply chains, the right products to come in. Um, so I think the market is just now sort of taking off. Um, I wish we'd been there earlier, but now that we are, um, you know, increasing our footprint there, um, I think the challenge we have is how do we go into Africa with healthy products right off the bat, and not start with the fun-for-you products. Start with more the good-for-you products, the more grains, fruit and vegetable, stuff that contributes to the nutritional quality of the African consumer, which means we have to set up the agricultural supply chains, which is really what we're working on right now. So I think, uh, especially the sub-Sahara Africa region, 'cause in parts of Africa like Tanzania or South Africa or Nigeria we're in already, but the rest of Africa, I think we're working on setting up the agriculture supply chains, and there's a lot of it available in Africa. We think the, the potential is huge.

Doug McMillon 39:34 I'm really excited about sub-Saharan Africa.

Indra Nooyi 39:36 Mm.

Doug McMillon 39:36 And, and personally was involved in the investment that we made there a few years ago in what I believe is the best management team on the continent, the best management team in Africa from a retail point of view. We have various store formats. Um, we're going to end up with an important business in Nigeria someday, in Kenya, in South Africa, where most of the business is now, and we're today in about 12 different markets there. And personally, I, I've been to five or six different countries in the region in the last few years, and I feel an energy and an optimism and an opportunity that I believe will be a very good business for us over time. We wanna be local. We decided not to buy 100% of the business because we wanted others to be able to benefit from the business that we were growing there. We're sourcing locally to the extent possible, which is, um, not that hard because most of it's food, and we're not moving it a great distance anyway. Um, so I think there's an opportunity to grow there for a long period of time and reach a lot of people and fulfill our purpose, which is to save people money and help them live better. But we're going to have to generation skip in some ways with technology. You, I'm sure, know how advanced mobile is and how advanced some things like payment are in some parts of sub-Saharan Africa. And so just like the rest of the world, we've gotta be on the front edge as it relates to technology and, and do it in an African way. I'm very excited about it.

Speaker 40:54 Hi, my name's Ben. I'm an MBA too. Um, first of all, thanks so much for coming. So you talked about having to be a bit conservative or the pressures to be conservative as the, the, uh, CEO of a big company. You have to be conservative on Twitter. You have to be, you know, conservative with your investors. So having to, to innovate, to succeed in, in this fast-changing world, how do you resist those pressures, and what, what can CEOs like you do to, to resist those pressures?

Indra Nooyi 41:18 I think personal conservatism versus taking risks with the business are two different issues. So with innovation, you've got to write the rules for, you know, our products because very often if you really want advantage, you've got to be the first mover. So I think on the product side and the product experience side, we can take as many risks as we want. When I was talking of conservatism, I was talking about personal messages going out or messages that we put out on behalf of the company. We've just got to be careful about putting out personal messages. I tell you something. On innovation, the bolder we can be, the better. The more we can break the rules, the better off we're going to be because, you know, the world is, uh, full of ideas today, and if we don't do it, somebody else is gonna do it. In fact, I'd say little startups are capturing a lot of the growth today, even in our space, even in the food and beverage space. So in many ways in our company, we have to act as if we are a bunch of little startups, and that's what we are, a bunch of little startups. So in order to do that, we've got to allow people to be Bold, you know, write the rules any way they want, and that's what they're doing in our company. When we have $22 billion brands, and now we've got another three or four in the pipeline, each of them is a little startup, and they're not conservative at all. Pepsi is not a conservative brand. As an individual, I am. I'm sure the next CEO's gonna be less conservative than me, but I am a conservative person, 'cause I'm terrified of all of you, you know? [laughs]

Speaker 42:47 [laughs]

Doug McMillon 42:47 [laughs]

Indra Nooyi 42:49 Like this.

Doug McMillon 42:50 I think the advice I would give you, whether you're gonna start a business or you're gonna join a business, would relate to values, and pausing for a little bit of time to know who you are and what you stand for. In our case at Walmart, we have four core values. We respect the individual, we strive for excellence, we serve the customer, and we act with integrity. Those four core values resonate for me personally, so it's been quite easy to be part of Walmart because those are the things that I personally believe in. And the reason that matters, in the context of your question, is lots of things are gonna come your way. They're gonna b- there's gonna be an emergency tomorrow, something's gonna come up and I'm gonna have to deal with it or when, when you're in these jobs, you're gonna have to deal with it. And you need some sort of a foundation to stand upon. And pausing to remember, what are our values, my personal values, and how does, how does my response here relate in that context? If you don't have that foundation, you're gonna be moving around trying to figure out one instance at a time what to do, whether it's a question about risk-taking or how you handle a crisis or something else. So it sounds a little bit hokey, I suppose, to pause and write down or think about, you know, what you want your end story to be, but I think it's valuable. You know, pretend that you're at your retirement celebration someday. What do you want them to say about you? What legacy do you want to have left? And predetermine before you start that that's gonna be your outcome.

Speaker 44:24 Yeah.

Doug McMillon 44:27 I'm not sure who's deciding who goes next. W-

Speaker 44:29 Hi.

Doug McMillon 44:29 Go for it.

Speaker 44:30 Yep. Thanks for, um, just sharing. Um, I have a question. So Amazon is a huge competitor. Like, if you were-

Doug McMillon 44:36 Who, who is that?

Speaker 44:37 Amazon.

Doug McMillon 44:38 Amazon.

Speaker 44:38 Amazon.

Doug McMillon 44:39 Amazon, got it.

Speaker 44:40 I mean, i- i- if both of you could talk to Bezos now, what would you say to him? Uh, and what would-

Doug McMillon 44:46 Go on vacation.

Indra Nooyi 44:47 [laughs]

Speaker 44:47 [laughs]

Doug McMillon 44:51 I...

Indra Nooyi 44:51 [laughs]

Doug McMillon 44:56 Je- Jeff doesn't need any money, but I'd be happy to pay for his vacation.

Indra Nooyi 44:59 [laughs]

Speaker 44:59 [laughs]

Doug McMillon 45:00 They are doing such a good job. And as a retailer, and somebody who grew up serving customers, I admire the innovation and the, the solutions they're bringing to customers, and I'm challenged by it. And, and part of our culture is to embrace, um, what competition's doing and learn from it and try to move quickly to adopt what we should adopt within our own company. Um, in some cases that's dangerous because it can look like following and be following, and if you're following somebody, you're only ever gonna be second best. So you have to, at the same time, be who you are and innovate within the context of, of who you are. But clearly, what they and other e-commerce companies, mobile commerce companies are teaching us, is that technology can be used to solve customer problems in a different way, and it saves them time, it makes life simple and easy. And we did that for a period of time in one way, and now we've gotta do it in new ways. So, uh, you know, I welcome the challenge. I like a competition. The one thing that I know for sure is that customers are gonna win, and they will decide who's here and who's not here. And thankfully for us, we don't compete against just one company, we compete against a lot of companies, and what matters the most is how much we're improving and getting better. So I like it. Gets me up in the morning and, and I f- I feel challenged, and I, uh, and I wouldn't want it any other way.

Indra Nooyi 46:20 He said it all. [laughs]

Speaker 46:21 [laughs]

Doug McMillon 46:23 Hm.

Speaker 46:24 Thanks for coming and sharing. My name is Iran Jang. I'm from China, and now MBA one. So I have a question for both of you. It's more personal c- personal career, like, development. So one's for Doug. Like, Doug, you have spending all your career life in Walmart. But actually for now, in ours years, it's not very common. So I really want to know what drives you to stay with one organization for a whole life. And another question is for Indra. Like, you have tried a different kind of role and different kind of industry. I want to know when you decide to s- uh, when you find your passion and how you get this passion for it. Thanks.

Indra Nooyi 47:02 I know. Um, I think I've learned from all the industries I've been in, because it's ranged from, you know, when I was a consultant, you learn everything from chemicals to banking to high tech, healthcare. I did everything. So it was fantastic to learn strategy through the eyes of a BCG because, um, you know, you realize that strategy is not industry specific, it's frameworks and how you think about a business. So I learned that. And then through my journeys at, uh, Motorola and ABB and then coming to PepsiCo, you know, just going from high tech to utilities and power plants, again, I learned so many different facets of business. When I came to PepsiCo, uh, even though I hadn't really worked in the consumer space, um, I could think differently. At that point when I joined PepsiCo, PepsiCo needed new thinking. So I came in and started to shake up status quo from day one. And PepsiCo gave me the leeway to go ahead and, you know, make all the changes and suggest all the changes that need to be made. And I think why I've stayed in PepsiCo and why I've put down roots in PepsiCo, from the day I joined the company, and this is one part of the culture that has not changed, I feel like PepsiCo is my company. Uh, it's, uh, embraced me, and now I make sure we embrace other employees. I feel it's my company. It's not some public company called PepsiCo, it's my company. Every aspect of the company, I feel I can change it any time I want. I felt that way when I was head of strategy, I felt that way when I was CFO, when I was president. I feel that even more so as a CEO. And when you have that sense of ownership about the company, why would you leave something that you own? And so I've put down roots, and I don't regret for a moment the 22 years that I've been at PepsiCo, and it's the greatest ride of my life. Whether I was CEO or not is irrelevant. It's been the greatest ride of my life.

Doug McMillon 48:56 Um, my dad was a dentist, and dentistry's hard. None of you are gonna be dentists, right? That's why you're here.

Indra Nooyi 49:02 [laughs]

Speaker 49:02 [laughs]

Doug McMillon 49:02 He, he was, he was a dentist for 40 years, and it is hard. You get up every day, you go to see people who don't really wanna see you. They're there because they need to be.

Indra Nooyi 49:11 [laughs]

Speaker 49:12 [laughs]

Doug McMillon 49:12 And so I was ev- I was influenced in a big way to try and create a career for myself that was flexible, 'cause I didn't wanna be trapped, trained for one job, and have to do that job forever if I didn't like it. So I went for a business degree. I went for my MBA, and my MBA was primarily driven so that if I got into a situation where I wasn't happy, I could change jobs. I thought it would help me move. But then I ended up working at Walmart, and I really started because I just needed a summer job to make money for school, and I loved it, and that's why I'm still here. I have had a blast. I have gotten to do more than a dozen different jobs. I've worked across countries, across formats. We deal with everything from, you know, marketing to logistics to finance to legal to Africa. How fun is that? So when I'm not having fun anymore, I won't do this anymore, but for more than 25 years now, it's been a blast, and I've come to care about it an awful lot, and I haven't been bored. If I was bored, I'd go do something else. Or if I were working around people I didn't like, I'd leave, but there are a lot of great people around where I work.

Speaker 50:20 Uh, thank you very much for coming. Uh, my name is Sarah Fu, and I'm a second-year MBA student, and I'm told I very lucky got the last question [laughs] . Uh, so my question to you is, um, so obviously you talk about a lot of, like, changes and taking risk, but a lot of that, like, is only going to be measured or seen or evaluated over years. But also today, if you look around the world, like, the investors or just the market in general is, like, very shortsighted. And then there's-

Doug McMillon 50:47 [laughs]

Speaker 50:47 ... like, so much noise in the market. So how do you balance this, like, short-term demand for you to, like, deliver versus the long-term vision to take risk and make, like, long-term change that are actually good for the business?

Doug McMillon 50:59 That's really well said.

Indra Nooyi 51:00 I know.

Doug McMillon 51:01 I think you get it.

Speaker 51:02 [laughs]

Indra Nooyi 51:03 [laughs] Should be answered or-

Doug McMillon 51:05 Now what do we do about it?

Indra Nooyi 51:06 What do we do about it? You know, I tell you something. I think you gotta look at the investments you make in the company as a portfolio. There's a bunch of stuff that delivers in the short term, and that gives you the, uh, breathing room and the fodder to invest in the long term. 'Cause I don't think, especially in our industries that are more established, unlike a, a startup, I don't think you can say, "Look, wait for three or five years. In five years, you'll start seeing huge results." Nobody's gonna believe you because we are expected to deliver because we are established, uh, you know, uh, legacy companies. So the way, at least I look at things in PepsiCo is I know what we need to invest in, constantly balancing projects that will deliver today, countries that will deliver today, which can then provide the ammunition for us to invest in long-term initiatives. You can't have too many long-term initiatives or too many short-term initiatives 'cause you don't wanna spoil the investor with too many short-term invest, uh, uh, you know, programs that then, uh, don't give you the permission to invest for the long term. So this judicious balance is what we worry about all the time, and that's what's ... And you know, I think tell you the only way you can do that is if you have the support of your board of directors. For public companies, the board has to completely buy into your program and back you in case investors say, "We don't like the shape of your delivery."

Doug McMillon 52:26 Um, if we ran these businesses for one quarter or one year, we would harm them greatly, and we care too much about them to do that. But as we're articulating that long-term vision, which, you know, um, in some cases may be beyond one investment cycle, we have to communicate clearly what our strategy is and be held accountable to milestones along the way. So it's not enough to say, "I'm managing this business for the long term. Get back to me in five years. We'll see how it goes."

Indra Nooyi 52:53 We'd like to try that, but it won't [laughs] .

Speaker 52:54 [laughs]

Doug McMillon 52:55 [laughs] So I think as long as you are deliberate, thoughtful, you build relationships and communicate, whether it's the investment community or your board, you can do it. And in our case, we have a family that owns, um, almost half the business, so it helps a lot. If they believe in what you're doing, it helps us have a long-term perspective, not just a perspective that's gonna deliver value in a year.

Indra Nooyi 53:17 I don't have that luxury. I don't have that family luxury.

Doug McMillon 53:18 It's great. If you ever get the chance, I, I recommend it.

Indra Nooyi 53:20 [laughs] I'll take it, yeah.

Speaker 53:21 [laughs]

Speaker 53:21 Please join me in thanking Indra.

Indra Nooyi 53:23 Yeah. Doug, thank you.

Speaker 53:24 [applause]

Indra Nooyi 53:27 Thank you, Doug.

Doug McMillon 53:27 Great job. Thank you.

Indra Nooyi 53:30 Thank you.

Speaker 53:38 Thanks, Indra.