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is sticker premium. Five dollars a month and you can get a free month trial by going to stick your premium dot com and use a promo code freak. You also get access to all. bonus, episodes and you'll be supporting our show to that sticker premium, dot, com, promo code, freak thing, I never thought of myself ass, a business as an entrepreneur, but I was to farm girl the eye at an enormous flourish. My answer, I think the board can have a stomach for Emma consummated insider from day one you, I see, you hey you yeah, I'm talking to you, you, for the purposes of this conversation are on the board of directors of a large, publicly traded firm and you ve just learned your ceo would be stepping down. So do you replace them with a company

beside her or an outside, or in our last episode we learned that boards are increasingly picking outsiders in the hope of shaking things up. You can't blame em, just think of all the business school buzzwords shifting the paradigm in thinking outside the box pushing the envelope, but What you really care about is the firm success, rather than just taking all the boxes. On the buzzword menu. Then, who go with a stable, inexperienced insider? That's what the data show objective. Smart, honest, intelligent insider is generally a much better had the somebody from the outside and today's episode. We

oh, here from one such insider who's been phenomenally successful. She runs a huge and usually visible company company, whose products youve likely encountered in the last day or two, if not lessen our two, and yet she herself isn't hugely visible, which seems to be just how she likes it. She's, not flashy, just smart, reliable forward. Looking just about any other positive adjective you can come up with. If CEO got reviews like an Amazon, this one would have five stars from people who shop procedures for living, like David Rubinstein, Carlyle Group of Motor for quite a lot to do, then a spectacular job from other members of the relatively to any group of women who run big companies like former taxi EEO Carol, bards any time we can put up some. Unlike her hold her up,

as an example of what females can do and in she did. She did things against the ITA, wanna, say advice, but against popular opinion. You ve been very strong and from professional, ceo watchers, like just Simon, filled up the yell school of management she wants to delegate authority for others to grow allow them to make some mistakes that she knows she could have prevented. Andrew Duff, I want to tell you a seat generally, as the smartest person in the room today room let's radio, ingenuity, CEO Pepsico, on how to deal with activist investors want you this up the company. At the end of the day, we view them as a free, consulting painful but free consulting on how hard it can be to make your company change with the times when people say culture, its strategy, I lifted first hand on why you have to accept some people, as they are.

because, if we don't we're going to start feeling, resentful or angry with whatever is happening around us and what happens when the ceo, especially the female ceo, goes home at night? Don't try to pretend that is still the big because you're not I'm fine from W and why see studios. This is freakin homage, radio, the podcast that explores the hidden side of everything. Here's your host Stephen Dogma, renewing weapon India and went to college and business school there. She played cricket and lead guitar

all girl rock band in nineteen eighty. She came to the states and got a second masters degree at the Yale School of Management, She worked for several years in management, consulting then in corporate strategy, enjoined Pepsico in eighteen, ninety, four, as chief strategist, twelve years later, she became its. the and now oversees two hundred and sixty thousand global employees and a snack empire that includes Fredo, lay chips, Tropicana Juices, Gatorade quicker foods and, of course, lots and lots of soda. We spoke with her not long ago on a Monday morning Stephen? How are you very well? Thank you. So let me ask you this. If we knew, let's say twelve year old ingenuity in

address India attending an all girls catholic Convent School. How surprised would we be to know that today she, CEO of Pepsico in Purchase New York, probably incredulous, because on our work, You would have assumed that, does she was gonna, be a firebrand. She was gonna, do something that was non conventional, but you gonna do it in India, in probably happily married with lots of little kids taken care of the older people in the home and just as little kids, would have gone around, but somebody was going to be a fire Brandon make trouble Sea or Pepsico in the United States of such a global company. Absolutely not was a turning point I think has been. Instead of gradual moves

even the day before they told me that I was going to be CEO. I didn't think that I was going to be CEO, so there wasn't a plan to become CEO. The plan was to just keep doing it very, very good job and making sure the company was in a good place. I think one thing just led to another: you want said when we become ceos, they give a ceo pills and that allows us to remain strong the face of all this criticism. So what's the toughest thing either that you ve gone through a ceo or on a kind of routine basis about being ceo of a company like Pepsico you're, the biggest surprising, becoming seals that down. new assent to the number one job you are it as they say when you, president of the company or CFO, you still have a very important job, but there's always a seal out there who was on the front line, who was

focused on and when you become seal overnight, you wanna person calling all the shots you're responsible for making sure you get all the information from the company crystallizes down to in a simple ideas and then tell the organization what to do, and so it's a very daunting job to be a ceo so day one. You have to be ready to take on the mantle of being seo knew he was installed as president and CEO of Pepsico in October, two thousand six and became chairman in May of two thousand seven times, turned out to be not so wonderful people talk about a honeymoon, he did but the release into honeymoon period, because from day an you ought to see you and when I took on the sea a job the world was a different place because a few months after I became seo, there was a financial,

Lapsed, written environment changed the. U S. Market slowed down so one learn in a hurry: how to run this company through extreme peers of adversity and there's no book you can read all you have to develop the book as you go along and that's what was really really really tough.

after you became ceo, you spend a lot of time and money, a centrally reformulate Pepsico as it as a food and beverage company, much more in line with modern ideas about nutrition. I'd like to speak about the up front costs of that reformulate, including a dip in market share and some very unhappy shareholders. I think, as we looked at consumer trends, and we looked at their, we thought the markets for going. We knew we had to retail upward folio. That was does not even a question. We knew that if we didn't do it, our future was in jeopardy. Did you feel at any point that Pepsico might come to be seen as tobacco companies came to be seen, kind of peddling and indefensible unhealthy products through there

the drastic grows more. You know consumers to change all the time of the change in our food and beverage faster than the change anywhere else, and this was a sea change that was happening because the whole society and the habits and their lifestyles were changing. So my point is this: is a great opportunities, a great opportunity for us to change our board. Folio go whether consumers going and gain market share, but I was- you stupid enough to say this can be done overnight? I mean I knew this journey was gonna, be long, arduous and was gonna be filled with pitfalls because it's not just that the design.

the change the board fully with a line up the entire companies, innovation, marketing execution and budgets to go where this marketplace was going. Then we have to change the culture of this company when people say a culture, its strategy. I lived at first hand because I saw how many people sort of said. Why should we change? Our company has been so successful for a future? We don't quite understand, and so one had to paint the future in a very postal way. I mean I had to use our own employees to say: look your own eating and drinking habits are changing.

If you're eating and drinking habits are changing, as evidenced by a b c and d, which I was observing at work, why do you believe the rest of the consumer's out there their habits and or changing? So once it start to change the culture of the company? Everything else happens fast, starting this call culture change what took so long and through them since obviously people were impatient because another, we are whole investing works, its yeah. You need to make the strategic changes, yes, you know that the marked basis changing and you have to change, but you gotta do everything while delivering phenomenal returns in the short term. I mean that's a tough. Because I'll change takes a little longer then norm, investors expect you, like most big public companies have dealt with activist shareholders. You seem to have

taken. Most have firm line with them, including Nelson pelts, whom I do to spin off Fredo lay he eventually exited his position and Pepsico with a pretty nice profit. I'm curious what you did to celebrate when Nelson pelts exited that position. You don't believe me in this might sound incredulous, we didn't celebrate when he came and we didn't celebrate when he left, because of the the day. You know we're. All activists inside the company mean I own almost fifty times my salary Pepsico stopped. My entire network is tied up in Pepsico and Somebody is an activist came into the company and suggested we do things differently. We study every idea very very carefully because if they have an idea for us to run the company better than we are. We will incorporated, but it there

idea, has more risks than upsides. Then we have to worry about the company. So the end of the day we are monopoly, focused on the success of Pepsico and our shareholders and been or just listening to ideas. We think by the implementation, And there were no, some bills came and believe me when he presented his white paper to us. We studied every chart The idea had multiple conversations with him, because at the end of the day, We view them as a free, consulting painful infrequent ultra, so they all little operational. Things said Nelson. Opened our eyes to and until the end of the day any activists has bitten. Pepsico stock will tell you that we treated them with great respect. We listen to them. We took in whatever we thought me

since and where we thought our strategy wasn't a better place. We state from until the early ninety nine. These Pepsico was mostly about selling soda and salty snacks. Then It began to diversify under Neue the company now groups its products into three categories: fun for you better for you and good free good for you, products include fruits, vegetables, whole grains, nuts, and so on, with an emphasis on less sugar fat. This category includes brands like Tropicana, Quaker and awkward. which is water better for you includes lower calorie sodas and baked potato chips and fun for you. Well, those are the brands. You're, probably most familiar with. Pepsi mountain do less and she knows

I understand that men and women each chips very differently. You can you tell us the differences. I think I you know when you get out of afflicts bag in one of our single serve bags, especially as you are watching, the young guys eat the chip they loved Doritos until they lick their fingers with greatly and when they reached the bottom of the bag. They pour the little lab broken pieces into him out because they will lose the taste of the flavour and the broken chips in the bottom. Zero women, I think, would love do the same, but they don't they don't like to crunch too loudly in public. and they know they don't like their fingers generously and they don't like to poor little broken pieces in the favourite them out So is there like a male and female version of chips it you're playing with their? No it's not me

and female as much as others nags for women that can be designed and packaged differently? And, yes, we are looking at it and we're getting ready to launch a bunch of them soon for women in a low crunch. The fourteen profile, you know not have so much the flavors take on the fingers and how can you put it in your purse because women love to carry a snack in their purse? The whole design capability we built in Pepsico was to allow designed to work with innovation, not just on packaging colors, but to go through the entire cycle and say all the way to the problem. The pantry or house being carried around or how they eat it in the car or drinking in the car. What should be the design of the product, the package, the experience stead, beginning once the entire chain you are known for being wrong.

We involved down to the micro level on how the product is in stores and so on. Someone the clear on one thing, business leaders all run their own businesses. I don't run their businesses, but what I, Do do is I'm constantly out, then the marketplace looking to see how our products look on the shelf and then I come back, and I talk to my people about what I saw was good and what wasn't really good to push them to higher levels of performance, especially versus.

competition, we have to look at the product all the way to the retail shelf, maybe sometimes the consumer's pantry at home. I that's what caused this even do home visits at times to really figure out how the consumer's talk the product is our package size right? Is it suitable to the refrigerator sizes that people have in their homes in various countries? I'd like to talk to you about the scientific thrust of of the firm you ve gotta science background yourself. You hire Derek Yok former World Health Organisation official to develop you're dietary guidelines, so I'd love to talk about

the kind of interface between the scientific method that you grew up as a student appreciating and how that's incorporated into a modern food and beverage company in a one thing that my experience has taught me that if you are trained as a scientist any or in a youth it through your high school in college, if you stay with the stem disciplines, you can learn pretty much all the subjects as you move along in life, and your scientific disciplines play a very important role and ground you very well as you move into possess.

of higher and higher authority, whatever the jobless, it's very hard to learn science later on in life, so one the please I would have for most young people today is stay with him. As long as you can now. Let me get to the question that you asked. I think one of the big things we realised and Pepsico do a very good and Linux tensions of our products. We had more development in Pepsico than we had reached so we could do flavour extensions of our products. Occasionally we good bye and build on a new product, but we are not very good at meaningful. Innovation are meaningful package. Transformational meaningful ingredient development that could, in fact

applied to multiple products. We knew we needed to build a very strong aren t capability, because the name of the game going forward was incremental innovation incremental in terms of top on growth and incremental in terms of pricing and profitability, and the only way to do that was to have a strong aren't department inside the company. We had very good people, but they were more. Elephants, focus and they were are indeed focus on top of that, as we wish. If the board followed more good for your products, we realised that we needed products, Chad, functionality, aims. Whatever claims we made had to be rooted in science, they couldn't be afraid he claims, because when it comes to neutralise products in particular, people are very sensitive as to exactly what you see on the package, because the ingredient list has to reflect up exactly what is too.

Testing in the front of the product. I'll give you an example. When we was so be one of the soul, be products was called liquid, liposuction and that was so be lean, liquid liposuction ones, Nobody was an edge, is small business they could use is interesting words to describe the product. The May Pepsico aborted liquid lie perception to come off the bottle and where to explain what we meant by so be lean in the back of the product, because big company people hold us to a higher standard than they do in a small startups. So we needed a very, very good team that could be very serious about what have we put on the package on the label on food safety, food security, food, traceability, ok, that no, your chief research scientist is an endocrinologist with an expertise in diabetes. Yes, I interviewed a lot of candidates:

to tell you a memo. Con absolutely impressed me because here was somebody who came from a pharmaceutical background, a medical doctor, but was very interested in the whole food beverage space and had a attitude approach and demeanor that I thought would fit very well within Pepsico. So you didn't where's medical credentials on sleeve and sort of lecture to us is what we should and should be doing. He wasn't talking down to us and he was so well networks and connected in the scientific world. Then I found you could come into play single, build bridges within people in Pepsico, further scientific agenda and bring the right talent into the company and all I had to do as a couple of things. One tell the organization that members here to stay. I didn't want people rejecting him HU, I d give him all the resources needed to get going and three. I do understand what he was doing so that, if

people were coming to see why we investing in this all mixed lab or why we invest a high throughput, I say machine. I could actually explain to people in solar. Cheeky ducking terms as to why we are doing what we were doing so that they understood that this was not just into the sea supporting an Aren T head. It was the sea or basically saying these are the best we're gonna take us a company whose he's gonna get us to a better place, and this is where the scientific background help, because I could understand what name would was saying and I can also check the only department to do things that they enjoy doing mean very off not write them an old saying: look, I've, six challenges, I'd like to give you- and this is why I'm putting these challenges out to you and they loved it. Are you the sum because my say God she's wasting our time, but the only people why this is Those interested she wants to use us to move the company to a better place. Give me a for instance, of one of the kind of challenges you would put to our

one of the things I told them was that I wanted to take the waste from orange appeals When you squeeze in orange, you have all of the people then the flesh from the orange after you take out the juice that's converted to animal feed. I wanted to extract the fibre and figure out a way to put it back into the branches, because orange juice doesn't have fibre yet that orange job pulp has so much of the fibre how'd. You extract the fibre from that and put into the juice accomplish that and the list goes on and on. I guess I have two things: I'd love to know about the future of Pepsico, one kind specific and then one broader. The specific one is about working with non traditional proteins, whether from inside sir plants or fungi or what not end there.

May be related to that. I'm really curious to hear your thoughts on personalized nutrition and where you see Pepsico playing a role in that. Eventually many of these areas a new emerging areas, even in some areas of progress, quite fun. Other areas on a mainstream basis still new an emerging remember, lost child of companies in silicon I need that are playing around personalized nutrition playing with new sources of protein and they haven't. You come to the big companies and into the mainstream. We have bet that you're making with lots of little companies to think about personalized

vision for athletes through gate red, we're working through other abysses to see how we can place bets on a group of companies working on non traditional protein sources are. The thing we have to be careful about is not trying to accelerate into the big leagues. Something is still on the edge and some people are still getting comfortable with so we're very judicious and making sure that you know it comes to Pepsico, it's ready to be scaled up. I mean example is Chiquita when we first investment Chiquita and can butcher this delay emerging trend and but the way we struck the deal with Kavimba June. We felt this was becoming a mainstream trend. We could bite and scale it within the political system.

If you look at the history of american industries american companies over the course of its a fifty four hundred years, most of the big firms disappear right because times change and it's really hard to change a company to keep up so keep that in mind, if, indeed, the global appetite for the kinds of food beverages that you make were to decline substantially. Could you imagine Pepsico repositioning itself, as a very very very different kind of company may be personalized nutrition company per se? Yes, and no, I think we have to understand very clearly the core competencies of our company and clearly we will do what it takes to keep our companies successful. We don't know pride of what the ship you. All that we want to do is to make sure that this entity called Pepsico

what are was shape or form on our own, in combination with others remains a vibrant company that is growing. Thus creating shelled value for the short and the long term. That's what we're singularly focused on. I have. It means changing our business model, but doing it that doesn't take us. We offer our core competent, so we don't fall flat on our face. Absolutely we'll do it, but we have to do whatever transfer. nation keeping in mind that there are things are very good at that things were not good at if a start up companies better doing personalized nutrition. The question is: how do we partner with them to best effect, personalized nutrition, coming up on economics, radio, a different kind of partnership for ingenuity, the one that happens at home.

and the day of first priority is being sort of a wife and a mother and a daughter and daughter in law and all those roles we have to play and if you enjoy Freakonomics radio, please leave a review or rating on Apple podcast or whatever podcast app you use. It helps more than you think, thanks and we'll be right back Pepsi COLA was invented by North Carolina pharmacist in the late nineteenth century. In the early twenty first century, Pepsi CO has more than a hundred brands and trademarks, including twin

to the that each do more than billion billion dollars and annual sales. The company as a market cap around a hundred and seventy billion dollars, we're speaking today with the seals, Pepsico ingenuity you are known for working hard twenty hours, it a seven days a week I read out, don't know, that's even possible that true close, I'm just curious what you actually do given day considering. There is probably no given day in your job, maybe today just give us a sense of what your work days actually like. Today I woke up forum and I read that the balance of the stuff I hadn't read over the weekend my mail and then I play tennis for an hour. Then I came to work at eight thirty this morning and I go to about ten o clock tonight. I have back to back me. When I go to the designs to do this evening, I spend the evening with all the designers of Pepsico and I'd take them to do

all of them in over dinner. They get to ass many questions. They want in any topic, then, probably last for two or three hours. then I'll get home by about one thousand and thirty or eleven tonight. I've already read whatever mail came from today till about midnight, go to sleep and be back up at four a dot m tomorrow and that's a normal most important question out of all that. Did you win tennis this morning I don't play competitive. Ten is I've approval and I guess tat hit. The probe occurs. I announce at this point. I have no time to go plain league right. Let me ask you: this is a standard question. We ask a lot of people, I'm very curious to know how you'd answer what some thing ingenuity that you believed to be true for a long time until you found out that you were wrong huh, I may say so think what you might actually a chuckle about for a long time

we especially given my cultural upbringing. I thought you know you just listen to your bed, Then you did whatever they asked you to do until I had my own kids and he told me no we're people do We have our own mind. We do our own thing and I learned the tough way that You know the rules that apply to me from my parents. To me I mean I was a very beautiful kin. many ways and dumb if the parents to jump over the slimy jumped over the line- and you didn't ask questions, You know, as I had children here and my husband and I we learn that the people to have their own modern ideas and we have to join we evolve a point of view as opposed to you will listen to me So this is one of the euro in life. I'm running a lotta lessons that are different from my own cultural upbringing. Talk for a second about

being a mother and daughter to your mother, dear parents, and being ceo. You know, I think they grow up in a culture where there is basically said. Don't let these jobs get you wanna, be a job is good at the end of the day or first priorities being sort of a wife and a mother and daughter Bertram on all those rules we have to play. So you know I have a mother. One particular believes that fiercely and believes that these jobs give you crowns and those crowns in the garage. When you come home, don't try to pretend that you still the big boss, because you're not Does that seem a little unfair, because if you were born mail that she probably wouldn't say that deal that's correct, but you know I can change our so I can either. friend my time trying to change, or just say you know what little thing whatever she wants. Other times. Issues with me. I leave the crown in the garage.

time at least brigand lived on the front door somewhere a table of in the garage. You know I think we all have to develop an adaptation strategies, because if we don't really stop feeding, resentful or angry with what was happening around us. From my perspective, my mom says the ground, the garage, fine, I left it in the garage. Been I've been married. Thirty, seven years the same guy, I don't think I could have balanced. All of this had I brought my crown into the house every day. There's no way would have worked and would I have like to Rotterdam, no, not at the expense of my marriage and my children, I out a great guy, but it requires constant sort of farm adjustments to make sure that we both were equal verses each other into

children we, both parents and one, was not seal. One is not see you. I don't think that works at all at all. Do you think that one? he's in there are relatively so so few female ceos in in the states and elsewhere is that there is a kind of standard model for what we think of as a ceo and that standard model is someone who never takes off the crown not even at home, is at an issue. Do you think I don't think that's the issue. the issues that we get a lot of women in the entry level positions Did you get the middle management women rise to those positions and then that's the child, bearing goes and when they have children. You don't difficult balance having children. your career, your marriage and it'll be a high potential out performer who's. Going to

grown the company in an organization that, in every one of them, is a pyramid so starts to ten hours you move up. We have to solve for that. How are we going to attract women? Who are more than fifty percent of all the college graduates are getting all the top How are you going to attract women to the workforce? Will we need them but allow them to balance having a family? And taking care of aging parents, because it all part of a sandwich generation today and still allowed them to contribute productively to the workforce, don't have an answer to that is going to be concerted effort on the part of governments? Societies are you rob families companies all of us coming together? You know I was lucky Stephen, because a lot of extended family that all chipped into help us take out of our kids. You know my husband and I worked in partnership with each other to make sure that our schedules didn't keep us both out of the office. At the same time,

But then our families all jumped into help take out the kids all supervise the nannies? If you want to call it that and in turn we take out or far aging parents today. and so I think the asian model of having extended family coexist with the young people today may have to be imported into that. We can take care of our children and take it the aging parents. At the same time, A few years ago Neue was interviewed by David Bradley Chairman, the Atlantic, the Aspen ideas festival. She was asked whether women can indeed have it all a career family. and I'll tell you a story that happened when my daughter went to school convent of sacred heart, and every Wednesday morning they have class coffee with mothers,

coffee with mothers for working women House has been a work. How M I gonna take off, the clock on Wednesday morning to go for glass coffee. So I missed most clasp office Madonna. Would Here is a list of all the mothers that, but there and you were not there mom first few times I would die with guilt, but I developing mechanisms- School and I said Gimme a list of mothers were not there She gave her home in the evening. say you were not there. You were not there in our home, Missus rag. Wasn't there, you know, MRS so, and so was not the only bad mother. You have to call because you die with guilt you just Would you mind

my arms evasion. David, is that the biological clock and the Korea Clock. I didn't total conflict with each other taller. Complete conflict Pepsico is the biggest company by market cap with a female ceo. So what kind of responsibility, if any, does that come with that is in prison for a meal Yeah, I don't know about dub. You know the market cap and the size of the company, but I will tell you that where we have female seals today, women are so king for role models. They want to talk to people who have made it to the sea or sweet under the sea, sweet and say more really to learn from them as to how they vote, you know, operated any more meal setting. How did they trade off having families and down you, know their job and dug trying to learn some lessons so that they can apply their own life

so there's that challenge of being a role model to women at large? Then, of course, a lot of fun. Diverse people turned to me to say to me as a immigrant women. How did you move forward in an american business contacts, and then I have a lot of demands from indian american people men and women alike. Who say? Can you tell us how ended Americans can move forward in global business environment. So it's interesting that I get the tongue and pulled from all three I'd say: When you become a see you and you're a woman, you are looked at differently Are you whatever you say people do they say things like Well, you know, guy see, you won't have said that or a guy would have set it differently. You are held to different standard. There's no question about it. I guess

that? You ve become see you and now you get a whole pass. You don't everything you say you do, guess analyzed different way. You know, but do you know any austrian any profession in any part of society. Trendsetters went through this sort of scrutiny. Criticism, men down commentary, and so I think this group of women seals all of us are going through that right now hopefully, as a numbers get begun. I hope they do nobody's looking at us. Women seals, but just as leaders of big enterprises. I hope that day come sooner than later, it's a priest.

but is it lonely at the top? I mean when your president, as you were previously a fear of vice president feared you know in any other executive capacity. You know that you defer, ultimately to the judgment of the ceo and and they'll take the he and the and the glory. Of course, when you're it, though at the top, What do you do about that and really beer? Is it lonely? Incredibly lonely, but again, as you said, is a cliche. What you gotta do is talked a lot of people, especially other sea Ilsa to trust, to learn from them in terms of what they did when they were faced with similar situations. And so there is no question as lonely, but you ve got a create your own ecosystem in your own kitchen cabinet so you can sort of alleviate some of the loneliness without giving away any confidential information,

I remember that we had a group of five seals that we would meet. Tell you know. Every quarter there was Jeff email from G. There was some attention. Of sample from someone then general meeting and we had done the change. You see you Alex Course came and the five of us would get together. Every quarter we try to get together every quarter to talk about issues that were on our mind. now. You know it was a good safe group for us to sort of bound side is off each other. That is really interesting. I'm curious. What are the kinds of issues that might have come up there? The outsides wooden expect. So as a group talk about the problem of doing business in emerging markets, and how do you judiciously balance developed, I think it was emerging markets or it might be something to do with the. Ah, you know: how do you groom succession was the day you become Syria to think about dreams.

success you. How do you do not take people and give them bigger assignments, especially at a time when the economy is so tough? You want safe hands sitting in save jobs, but really develop succession. You want safe hands and uncomfortable jobs to see if they can do more. You know you have to constantly think about taking the risk, verses, retreating to save positions. So you talk to your fellow see us as it. How did you do it? How you are complex the same mom challenge in your own ways of those kinds of things we talk, but everything ranging from big broad portfolio. Bed too. I know how do I declared an investor story to how do you think what people development? I see that you recently gave a very large gift to Yale which will go to the school of management, which will name it's dean ship after

I see that your sister she and her husband are behind the naming of the tend in school of engineering it and why you talk criminal about the kind of experience of you coming from an immigrant family and becoming in the space of really a half a generation so thoroughly ensconced in not only the business community here at the highest level, but the educational community, just what that's been like for you. I think in many ways rules is grateful for what the United States has given us in terms of education and opportunities, and we want to make sure people after us benefit from those opportunities, but I think at least in my case my giving has gone beyond the schools in the United States. I just read it all: the signs labs and my high school and read it all the signs labs in my undergraduate college, in India and in the process of rebuilding the

the launch of which was in a knot in very good shape. So I think, at the end of the day, we ve been privileged to have enough resources, but you know you don't take your resources with you. When you pass on. I think the best thing that do not yet a list, not, I think the best thing you can do is to update forward, and so you are putting the money to work for the next generations is important when you I think this was in association with your your gift to Yale. You are quoted as saying that business issues are never just business issues and my most ardent hope is it. This endowment will teach future generations of leaders at the most successful companies of tomorrow will do more than me money. I'd love to hear what you mean by that business issues are never just business issues, especially when you're in a business of making food and beverage

is that not all of the world, especially the public health people, nutrient people love. You know our companies business was developed and grown different time, as society became more sedentary. For whatever reason you know, the offering of foods and beverages to that society to the centre is society has to change its, not a or game. It's an end game there is a time and place for the fun products. But now increasingly, we have to develop good for you, products that are suitable for an increasingly sedentary population. So, from our perspective,

You know clearly you'd make a lot of money just focusing on the products of the past, but we'd be growth constrained. What I wanted our company to do is think about societies, think about communities, think about how we can evolve a business model that takes into account changing societal trends, whether it be a product portfolio, whether it be environmental issues, whether it be issues related to diversity and inclusion. I wanted to make sure that we looked at all of these issues holistically and made sure

it did the right things is a company so that we would remain successful into the future, because, at the end of the day, Stephen, you know, companies like ours are little republics. Pepsico market capitalization makes is bigger than many countries around the world and we have access to lots of technology. We have access to big distribution systems. We have access to capabilities that many countries don't have and we haven't on a global basis, so we can actually movement across the world seamlessly. So I companies like ours have not really gotta run the company for the benefit of shareholders? We ve got to do it in a way that very sensitive to societies and communities around the world. That's my sincere hope that every company views their place in society that way and modifies the business model to be more sensitive to these countries.

Societies in communities in which they operate. So if you were not ingenuity, but maybe a marketing executive looking for ingenuity, or maybe a food scientists that Pepsico or maybe even an intern, Would you say about ingenuity as a boss, somebody who has very high standards who holds, to high standards, but helps us get to these higher standards. Somebody, they demanding but also very carrying somebody. Who works as hard as we do. Doesn't Delhi it and go off to play golf for you now have a religion

king live, but his day alongside us, helping us get to a better place, but also pushing us and herself to be a better person and a better executive. I think that's what they say about me. Maybe it's just her personality, or maybe it's the com that comes from having weathered many crises, whatever the case internally doesn't sound as if she's ever been stressed out were terrified that are job was in jeopardy or that her company was going to implode, but stress jeopardy and potential implosion. That's why see yours are paid the big dollars,

So can we have next time and economics? Radio, the secret life of sea egos continues with all the trouble a ceo gets to deal with from consumer rebellions lower. Maybe fifteen or twenty thousand people were very upset to changes in consumer preferences. We tried to hard our old model alive and huge changes in technology, and then I choose and the internet came along. Don't forget, macro economic problems. Police were coming eating our and good old fashioned fraud, we have said Jack it got four hundred million dollars missing. Also the joy of personnel issues. How do you fire that one person who is actually going to get you over the finish line as ingenuity told us today when you're ceo you're next time?

What being it really feels like taking those decisions that impact people's lives? I ve heard, is not easy ways very heavily on me personally, its next time on Freakonomics radio radio. Also, would you like to appear in a future episode? We are working on a story about with called moral licensing. Is the idea that if you do one good deed, you might somehow feel entitled to follow it up with something much less good lake? You visit your sick grandmother such a good person. You tell yourself, and then you go home and cheat on your taxes, so we want your stories of moral licensing. Use your phone to make a short audio, recording, just use whatever voice memo app. You have an email us. The file to radio at for dot com com tells you name, we live and then tell your story. If the nature of your store. You need to be anonymous. That's it's! Ok, thanks

economics radios produced by w and mighty studios and w productions. This episode was produced by MAX Miller. Researchers from Zactly, Kinsky or staff also includes Alison Hockenberry Gregory Zawoiski Stephanie Tam Merit Jacob. for Harry Huggins, an Branca cheers for this year. The sound designs by David Herman with help from the individual, the music you hear throughout our episodes, was composed by Luis Gara. You can subscribe to for economics, radio and apple podcast, or ever you get your pack ass. You should also check out archive economics, dot com, where you can stream or download every episode we ve ever made there more than three hundred. You can also find the transcripts M links to the underlying we can be found on Twitter, Facebook or the email at radio at economics. Dotcom thanks