PepsiCo CEO Indra Nooyi: Trust, but verify
When PepsiCo’s (PEP) longtime CEO, Indra Nooyi, took the stage at the Consumer Goods Forum global summit in New York City on Wednesday, one might have expected the standard corporate fare: A short soliloquy on the company’s expectations for its next quarter, the success of its recent new product launch, its consistent dividend record. That was not what Nooyi came to talk about.
Instead, Nooyi delivered an impassioned talk on trust, a concept that she thinks has become increasingly critical to a large company or brand’s success. “Trust is the intangible currency we trade on,” she said. “It is what binds consumers to our brands.”
Millennials, Nooyi said, are particularly focused on interacting with companies that they feel they can trust. Their values—summed up by the term “LATTE,” which stands for “local, authentic, traceable, transparent, and ethical”—must be respected if a company wants to win them over. They are more attracted to small companies, she said, making the challenge for big established brands even bigger.
But Nooyi then shifted her focus, picking apart some of the inconsistencies in the Millennial generation’s logic. For example, she said, “Why would consumers rather trust smaller companies? They talk about local, transparent, and traceable, but consumers are willing to go online shopping and the majority of [their purchases] come from manufacturers producing thousands of miles away.”
To address this problem, Nooyi laid out a five-point plan for big brands, starting with the need to keep “doing what we are doing,” by which she meant boosting transparency, ethics, and corporate governance, as well as establishing better relationships with NGOs, rather than treating them as the enemy.
The other three points in Nooyi’s plan focused more on external factors than to-do lists for the companies themselves. In what felt like a bit of a blame game, Nooyi called for more corporate protection against litigation. Then she talked about “vicious online attacks” and “unfounded radical tweets” that can undermine a company’s reputation, before going on a bit of a jeremiad against the media itself.
“We need a responsible media that does not contribute to the echochamber,” she said. To laughter from the audience, Nooyi turned the tables on her interviewer, asking him why, for example, article headlines were so often radically different from the story itself. “I would say one thing to all the media. Walk a mile in the shoes of the CEO and the company management. I think you’d have a very different perspective.” (I certainly hope she wasn’t referring to Fortune’s piece, which was reported over the past several months and included a lot of time spent with Nooyi herself.)
Nooyi is, of course, right that incorrect rumors and innuendo can harm a company’s brand, particularly in today’s social media-saturated world. Trust can be lost, even destroyed, before a company has a chance to respond. But many companies, big and small, have been playing the spin game for far longer than Twitter has been around. Nooyi was eloquent, but President Ronald Reagan may have said it best when negotiating arms control with the Soviet Union during the Cold War: Trust—but verify.