Indra Nooyi: Inside the Big Tech Boardroom

Michael Marks: Hi everyone. This is the TechSurge Deep Tech podcast presented by Celesta Capital. Each episode we spotlight issues and voices at the intersection of emerging technologies, company building, and venture investment. I'm Michael Marks, founding managing partner at Celesta.

Today, we are pleased to welcome the amazing Indra Nooyi.

Indra has had an unbelievable career at many consumer product and technology companies, including roles at ABB, Motorola, and of course, as the chairman and CEO of PepsiCo, where she spent 25 years and helped to grow company revenue by 80 percent during her tenure as CEO. Indra sits on a number of interesting boards, including Amazon, Philips, MIT School of Engineering, the National Gallery of Art, and the Memorial Sloan Kettering Cancer Center.

She's also the author of the New York Times bestseller, My Life in Full, Work, Family, and Our Future. The book is a memoir sharing advice on how we can better blend work and family and advance women in the 21st century. This is just scratching the surface of her life and her impact on the business world and beyond.

So thanks so much for joining us, Indra. I'm really excited to talk to you about a number of things and ready to jump in.

Indra Nooyi: Michael, thank you for having me on your podcast. You and I have been friends for a long time. It's a pleasure and a privilege to be chatting with you.

Michael Marks: Well, thank you. It's nice of you to say.

So let's start with the big picture and look at the state of the markets today. And of course, there's all sorts of things going on politically we can talk about. But what's been in play in the markets is that the most valuable companies in the world are increasingly technology companies. Now that everybody's talking about the AI boom, which is all anybody can talk about these days.

And you're on the board of one of these big tech giants being Amazon. So a few questions around that. First is, does it surprise you how much technology is dominating the economy. And in that vein, do you think this is a cycle or, or is this going to continue? Or how do people at Amazon and other companies, you know, think about it?

Indra Nooyi: Well, I tell you, um, I'm surprised and not surprised by what technology is doing to the stock market and the marketplace. The growth of these companies is just spectacular. Whether you look at Nvidia or Apple or Amazon or any of these people, their top line growth rates are spectacular. The profit margins are very good.

And outside of some of them that are trading at very, very high P levels, the P levels that they're trading at are very consistent with their growth levels. So you can look at this market and say, this is a disruption that's happening to the marketplace and these guys are driving the disruption and are going to get a disproportionate amount of the spoils.

And therefore, they deserve these valuations or like it was in 1999, this is going to be one huge big bubble that's going to burst. I don't think it's the latter. I actually think we are on the cusp of a major disruption and the companies driving it are going to make life very different, easy for us, more interesting.

And um, you know, to these innovators are going to go a lot of the spoils.

Michael Marks: I tend to agree with you about that, but you raised an issue that I think is worth digging into a little bit, which is that these valuations are based on, you know, high profitability in these companies. And while that's true at NVIDIA, it's true at Broadcom, it's true at a lot of the semiconductor companies.

It's not true at a lot of the AI companies today. So a lot of the AI companies and, you know, and a lot of the, the big technology companies are pouring money into AI products where there isn't any revenue or profits and they're still pouring money in. So how do you think about that part?

Indra Nooyi: Well, I look at sort of the AI as the glue that links the hardware and the companies that are going to apply it.

Without that AI layer, there's no excitement. The excitement is not from the hardware. Excitement is from what's happening in between. What AI can do to take the hardware, take all the data that exists, and And create a new way of running businesses, of drawing conclusions, of making consumer experiences easy, uh, you know, linking video and images and, uh, uh, data and actually creating new ways of running companies or societies.

And so I think the AI layer today is going through a, is what's driving the disruption.

Michael Marks: Sure.

Indra Nooyi: So I actually look at the AI layer and say, Oh, my God. I'm in awe of all these people who are doing amazing things in this AI layer. I wish they'd take a long vacation for a year or two, Michael, for the fact of the matter is that AI layer where the excitement is.

Michael Marks: Well, you know, I was going to get to this a little bit later in the interview, but let me do it now because I think it's a, it's a good segue. So how do you think, I'm very interested in your point of view from the consumer product perspective. You know, we, we talk about all these technology companies adopting technology and, and that's our base.

How do you about. What about the companies that are not fundamentally technology companies like PepsiCo or other consumer products? How do you see them adopting AI?

Indra Nooyi: Well, the technology companies are developing the technology. Some of them are prototyping the technology, showing the use cases and all other companies, all traditional industries are going to adopt.

Those, uh, you know, applications for their companies, whether it's in the back office to make life easier for consumer in a customer interaction for innovation, for looking at market research and data for creating digital twins and manufacturing. I think the whole area of AI. GPT, all of that is going to make productivity happen in profound ways in traditional companies.

I think we're in the early days, Michael, we're in the sort of the first or the second inning, and only now are we putting our tools in and saying, where are the results going to come? The pure technology companies like the Amazons. Are going to know how to derive value sooner than the traditional companies, but all the traditional companies have got experiments going on and they have to because if one company gets an edge, everybody's going to hurt.

Therefore, there's a race going on to say, how do we adopt these digital tools? How do we get the productivity? How do we get innovation to be turbocharged? Everybody's on this race right now, and they're trying to figure out how to keep the old going as well as start the new. So lots of experiments are going on in companies.

Michael Marks: Well, I'm glad you brought up process control manufacturing 'cause that doesn't get talked about very much. In fact, we have a number of companies at Celeste that are doing, you know, optimization of, of process controls a pretty difficult industry. So I would assume you have that kind of technology happening at at at PepsiCo and other, you know, manufacturing companies.

Indra Nooyi: Well, I've been out of PepsiCo for five and a half years. I don't wanna be talking about something we did five years ago because there was no AI or GT at that time. But I will tell you. In the manufacturing companies that I interact with or I meet people, everybody's talking about how to now use digital twins, how to use AI to simulate processes, understand all of the pitfalls and the benefits of using it, and then put it into an operation.

So I actually think we are on the cusp of a major step change or a major disruptive moment that's going to make More productivity happened. It's also going to create some issues because we're going to have a labor pool that needs to be retrained. Right. But we're also going to have a interesting time where companies that don't deploy it, don't know how to catch up with the companies that do deploy it and derive the productivity.

So we're going to see the winners, the losers shake out. So it's going to be a very interesting time.

Michael Marks: I mean, I agree with you again. I think that's exactly right. I think that in any industry, there's, there's obviously all of this. This work on tools to be more productive. We just talked about manufacturing and you talked about the consumer experience and there's a lot of that, but there's also all this administrative stuff.

Like for example, we have a company that uses artificial intelligence to maximize patent portfolio. You know, there's, there's lots of these things. It leads to another good question, which is how do you see the winners and losers shaking out? I mean, you just talked a little bit about the ones who adopt technology faster.

We'll do better. How do you see that playing out? And I guess a related question is, will the big. Get bigger or will the, will the smaller companies that tend to be adapt technology faster be winners? You

Indra Nooyi: know, that's the million dollar question. I don't know, because the big companies have to keep the old model running and try the new model and then figure out how to slowly start to switch over.

So you could argue that the big companies have a bigger challenge because it's retooling the company in many, many ways. On the other hand, if big companies can roll the dice and be aggressive. They might be able to do it faster, but you know, it's transformation of large companies is not easy.

Michael Marks: It's not easy.

Indra Nooyi: It’s not easy. I think mid sized companies, if they really get nimble and find a way to deploy these technologies judiciously. Remember, a lot of these technologies have problems too. So you've got to make sure you don't get caught up in the problems. So if you can, if you can deploy the technologies judiciously, you can actually Create more profitability, more value, and you could in fact take a leapfrog versus a big company.

So I think, again, let's be clear, we're in the first or second innings of this game. Right. And everybody's looking at use cases. There's, it's promising, very promising, but we need to see real use cases. We need to see productivity or top line growth resulting from it, which is clearly identifiable with these tools, and then we can start talking about who's going to accelerate deployment of those versus who's going to pause and say, wait a minute, I'm worried about what this is going to do to A, B, or C, or there's too much hallucination in these models, let me rethink it.

So I think all of these issues are being talked about very carefully.

Michael Marks: Well, here's another, um, Angle here, having invested in and worked with small companies, you know, most of my life, but you know, the small companies out innovate the big companies. We all know that. On the other hand, bigness has a huge amount of value and you know, you're on the boards of one of the companies that's targeted if you will, by the antitrust.

And there is this other current, which is that the big companies have gotten too big and too powerful and therefore they should be regulated. Or how do you think about that? The bigness problem? Yeah.

Indra Nooyi: You know, I don't want to talk about the regulators or the regulation, but I will just say that size alone should not be a reason that you get regulated.

I think it's how you do business. And how you deliver for the consumer and the customer. That's what should be the focus. And I'm very proud to be an Amazon board member because Michael is an American company, born in America, built in America, and, uh, has done profound things to, you know, please the customer, whether it's, uh, you know, giving them a service at a very short notice, not having to venture out to shop for, you know, a whole range of products, giving it to it an affordable cost, I don't think we could have survived COVID without Amazon.

So I remain deeply grateful to a company like Amazon. And so I sit there going, size alone should not be, uh, something that invites the, uh, you know, scrutiny of regulators. What else they want to look at, look at that's up to the regulators and up to how they think about markets. But from my perspective, as a board member, I look at Amazon and say, here is a company you have built and grown that we should be proud of and what they're contributing to the customer experience.

The cost of the basket of products that they sell, which is really, uh, you know, well managed, they really ensure that it's the lowest cost that they can provide the customer and want to delight the customer in every possible way. And I'm proud of that.

Michael Marks: Well, you should be, you know, I'm a huge fan of Amazon.

Also a huge fan of bigness if managed properly, different people have different perspectives about this, but it's hard to look at Amazon or Microsoft or Google or Nvidia or any other very powerful company and not find incredible things they're doing to make the world a better place. So that's where I come down, but I raised the issue because, you know, lots of people have a different view on that.

Indra Nooyi: So, you know, but the regulators look at it differently. It's up to them and they will sort it out with the companies and everybody else. But Personally, I'm very proud of these companies and I'm glad they were all born here.

Michael Marks: It's certainly a view I share. So Indra, let's, let's transition. It's a good transition to talk about boards in general.

You and I had the pleasure, mutual pleasure, I believe, of, uh, being on a big company board together. You know, boards, you, you're on some very diverse boards, which makes you a good person to talk about that. I mean, how do you think about board governance? As a board member, what do you view your role as?

How do you try to help? You know, company boards are very different. You're on a bunch of them. Some are good, some are bad. You know, the relationship with the CEOs are different. Just in general, how do you feel about your board memberships?

Indra Nooyi: You know, first of all, I take my board membership very seriously. I think it's saying you shouldn't take on a board membership unless you're serious about the job that you've been assigned, which is represent the shareholders, but more importantly, ensure the long term success of the company.

I think these two objectives you should be very cognizant of. Make sure that you represent shareholder interests, but you also have to make sure this company is going to be around for a long time because you're not there just to Sort of cut, slash and burn and leave this company a mess. And so I think that whether it was a board that we both were part of or the boards that I'm part of now, uh, you know, as a board member, as an, as an ex CEO, you don't want to be running the company, even though sometimes, you know, retired CEOs have an urge to get involved too much.

We don't run the company. There's always a very competent management to run the company. And if there isn't a competent management, you can help change it because that's the role of the board. But as long as you have a competent management. Let them do their job and do the governance job, the oversight job that you as a board should do, you know, do it in a way that is deferential to management, but not at the expense of doing a job right.

So it's give the management room to do what they have to do. But make sure you intervene in the right points to ask the right questions, to probe, to push, tell truth to the CEOs and the senior management. You should not be afraid of them. And you should not be beholden to that board salary that you sell your soul to become a board member.

Very, very important.

Michael Marks: You and I share the same views here as well. I tell people frequently, you know, the board's job is to hire and fire the CEO and there's not much more, but that's not how a lot of boards operate. And a lot of boards, and you know, you see this play out in the markets in terms of what some of the companies do.

A lot of the boards, are just supporting the CEO, no matter what the CEO wants to do. And I don't believe in that. And if you don't believe in what the CEO is, let's say you don't want to fire the CEO, I mean, that's the, it's obvious, but if you think that they're kind of going off the deep end, do you think it's the board's job to get involved in some manner? What do you think about that?

Indra Nooyi: Well, let me speak to my board experience with my board, because I had a fantastic board and the board was shaped for what PepsiCo needed, not stacked with family and friends of yours. So I was blessed to have a very knowledgeable, involved board. Boards are only successful if the CEO keeps them involved, and invites them into the company.

So I made sure my board was totally informed all the time, and I invited them into the company and opened it up and said, Go visit our operations, go meet our people. In fact, I'll make it easier for you to do that by providing transportation. So I actually welcome the board's involvement and I think the board has to be fearless when it comes to thinking about the quality of the CEO and the senior management.

They have to be absolutely objective and fearless and our board forced us to think about succession twice a year. What happens if you get hit by a bus? What's the pipeline of talent you're building? And they were exposed to the talent. No. Here's the point. CEOs also have a role, Michael. We have to know when we have to step up.

Michael Marks: Right.

Indra Nooyi: And, uh, from my perspective, this is my point of view that as it applies to private companies, you know, in our case, we have to put the company before us. You know, my husband has always said, my list is PepsiCo, PepsiCo, PepsiCo, and then everything else. And that is how it has to be for a CEO, because so many.

Livelihoods depend on the decisions of the CEO. So as a CEO, you have to put the company before you. Thing number two, you have to get off being CEO. If you're too exhausted to run the company or the board thinks you're exhausted, the board thinks you're useless and therefore you should be thrown out, or you have so many great successors.

That if you stay on, they might leave in my case, I stepped out because one, I had run the company a long time. I felt this next iteration required a fresh pair of legs and I was exhausted and I had so many great people. I developed a succession. I said, my God, now's the time to walk out feeling great about myself and the board never had to find me.

The board actually gave me a rousing, wonderful farewell. And I feel good about stepping out. And so I think succession is a skill and the board and the CEO have to work together, hold the CEO accountable to develop the state of candidates. But the board has to get involved in understanding, knowing them, knowing the future needs of the company, and then picking the right person to run the company for the future.

Michael Marks: So do you have a point of view on public companies about how much time is enough just as an average as a CEO?

Indra Nooyi: I think, uh, you mean tenure for the CEO?

Michael Marks: Yes. Yes.

Indra Nooyi: I don't have a strict answer, Michael, because, you know, I served as a CEO for 12 years. And when I took over the job, the average tenure was four or five years, maybe six.

All right. But when I look at my own tenure and say, why did I do 12 years? I did two six year terms because the first six years was just working through the financial crisis and writing a lot of Things about the company that needed to be righted. Then the next six years was deriving the value from all the investments.

Um, is that too long? I don't know, but I will tell you one thing at any point in that 12 years, if I felt I was holding onto the job. I would have been out of there. I was just trying to figure out how to leave behind a great company, not hold on to the CEO job. That's why succession planning is so hard.

Michael Marks: We have a lot in common. I was CEO for 13 years. And then I just said, it's time for me to go. I've been here long enough. We got some younger people. I think we'll do a better job. And actually in my case, I actually went around the world on my farewell tour and told everybody, look, there's a new CEO coming in and you need to listen to that person and not.

Think about what I would have done in my 10 years. It's time for somebody different. And so we clearly hear a point of view there. Let me change that subject a little bit, which is that in the venture investing world, which is the business I'm involved with now, there is this whole debate.

You know, in Silicon Valley, particularly, I'm sure you heard it about being quote unquote founder friendly, and it's gotten people into a lot of trouble, you know, there's people going to prison, you know, the whole story here, but there is a certain dynamic in Silicon Valley type investing, which says we're betting on this, this entrepreneur, and we're going to stick with that entrepreneur, no matter what, and that goes awry a lot, we don't tend to think that way.

But how do you think about that in these earlier stage companies? Well, you don't have a lot of talent to rely on if they leave, right? That's the point.

Indra Nooyi: In the early days, I think, uh, you need the founder to get this company off the ground. But if you're funding a company with a founder or bust, then you're crazy.

Because if the whole company is dependent on one person, then I think as a, as a, Investor, you're making a mistake because forget this person holding your hostel. You could get hit by a bus or she could get hit by a bus. So you have to prepare for that contingency. So all that I'll say, Michael, is I think founder led companies works.

I mean, Jeff Bezos is a founder led company. Amazon is, but it's a public, absolutely objectively run company. There's no two classes of shares. And Jeff is very critical of himself and the company. So, you know, he is part of the company, but as an objective person, he doesn't ever. Look at it as his private company that he can do whatever he damn well pleases.

And so I think in many ways, In the early stages, founders can play a role in getting a company off the ground because they attract the investment. Then after investors should hold founders accountable and say, Hey, where's your bench? Where are the other people in your stable? And how is this company going to build its shoulders?

And you can't be the head forever because there's a company sizes. Founders sometimes don't grow with the size.

Michael Marks: Yeah, that's clearly the case. And don't even get me started on two classes of stock, which I think should be against the law, but we'll save that for a different podcast. Uh, look, you made a perfect segue to an important subject for both of us when you said he or she.

So let's talk about women in business. And you and I have had some private conversations about this. It's a really interesting topic. It's a really important subject. You've been one of the real trailblazers for women in business. And I would just like to give you the floor to talk a little bit about what you've seen over your career and, and, and, you know, subsequent to your time in PepsiCo, but in terms of the advancement of women in business and what are the things we can do to make it even better?

Indra Nooyi: So I want to start off by saying, as I look at colleges, High schools, 70 percent of high school valedictorians are women. Women are getting more than 50 percent of the college degrees. They are getting more Magna and summa cum laude in many universities, not all in many universities. They're getting, you know, disproportionate number of Magna and summa cum laude.

So they are hungry. They are studying hard. They want to do well. And even in engineering, there's about 40 to 50 percent of engineering schools are now women. So you've got this incredible talent pool called women. Yeah. Who want the power of the purse, who want economic freedom, who are doing everything possible to get ahead, and they're working incredibly hard.

And they come into the workplace. Then they run up against a brick wall because they enter, they're very eager to contribute. And for some reason, at every turn, there's some sort of a barrier in their way. And the question we all have to ask ourselves is the following. If we want the best and brightest to come into our companies and thrive and grow, why do we put barriers in front of these best and brightest who happen to be the best?

So I look at it as a talent issue, not as gender issue at this point and say, guys, let us make sure that we have a pathway to raise the skills for these people to come in. Don't have all kinds of values thrown at them and then allow them to succeed. So that's the first point. Point number two. There's no question that if we want to have kids born in this country, and we do, we do need 2.

1 kids per family. We have to provide a way to support families so they can have children and contribute to the workforce. Now, we talk about managerial talent always when we talk about women, but we forget that a large part of the economy runs on women. Nurses, doctors, teachers, retail workers, restaurant workers, beauticians, nail, uh, you know, people, people who are dentists, dental hygienists.

Imagine what life would be like if none of those people worked, but we also want them to have kids. So my point is the big challenge we have today is how do we take these brilliant women graduating from colleges and universities and bring them into the workforce and keep them there? And stop putting barriers in front of them.

And how do we provide support structures for all women who are in the workforce so they can also have children, childcare, support, elder care, support. Women are doing too many jobs right now. Michael, they're doing too many jobs. And many women have to work in order to support their families.

Michael Marks: There's a, there's a lot to digest here.

Let me start with what are the barriers that we put in front of women? In your view.

Indra Nooyi: There's still it's better than it was many, many years ago, but this whole issue of unconscious bias still exists. We still pay women less than we do. for an equivalent job that a man does. We still have a lot of behavioral, um, you know, behaviors exhibited by men that make women feel like they don't belong in the boardrooms or in managerial levels.

And, uh, there's still sexism that prevails. I must say it's getting better, but it still exists. Now think of the woman who's just taking care of the family, come to work, needs this job. And goes through these kinds of experiences at work, doesn't get the promotion she deserves, doesn't get the pay she deserves.

She's very upset about it, agitated, goes home, now has to take care of the family, take care of elders. It's just too much we're putting on the women, but she can't even give up the job because she needs the job.

Michael Marks: Right, right.

Indra Nooyi: And from a company, the economy perspective, we need the best brains. You see, the economy needs their brains and their brawn, both.

Michael Marks: Yeah, well, I certainly agree with that. So let's go down the path of providing, because you and I have talked about this, we agree, we need to provide, you know, child care, elder care, you know, health services is needed. Where should that come from? Is that a government thing? Is it a private sector thing? Is it some combination?

How do you think about that? Because I think lots of us agree with this and don't really know how to accomplish it.

Indra Nooyi: You know, I always laugh and say when men wanted gyms and offices, every office put a gym in, right? Why can't we look at childcare as gyms and say, we got to put childcare facilities, and if not in the office, in communities, but it's not for women, it's for families.

We should stop saying family is female. We should stop that.

Michael Marks: Right.

Indra Nooyi: Okay. We should say to make sure that our country has kids that are born, but they are developed the right way. Okay, we should pay child care workers. Fair wages, train them, make sure they take care of these children very well so that you can contribute to the economy in the one hand and have children on the other hand.

So I think it's got to be a combination of government and private sector and it's got to be in communities because now with different ways of working, You don't have to have child care on site. You should have it in community so that multiple companies can come together and with governments fund child care, not just a warm body, taking care of the children, a trained child care worker.

In a wonderful environment taking care of children so that it's not bank breaking for the family

Michael Marks: So is that the part that you think government should play the role in because it's harder for the private sector to do community Funding I guess maybe not.

Indra Nooyi: It's not hard. I think they should sit down I think state governments should sit down with private sector and talk about where are all the You know Trustors of children being born where the young people are and where do we need to put the child care in place?

And to be honest Michael Night shifts. A lot of women work night shifts. Nobody talks about child care in the night shifts.

Michael Marks: Yeah.

Indra Nooyi: And we have to, you know, if we want our factories to work, if we want our companies to work, if we want our businesses to work, this is an issue we have to take care of, because if we don't take care of our kids, we're

Michael Marks: We have problems.

Well, so do you think about that as having childcare at work where people can bring their children and have them take care while they're working or, or subsidizing or giving extra capital for home care?

Indra Nooyi: So let me take an example. Let's say that there's a neighborhood in Connecticut, let's pick West Hartford.

And let's say there are five factories in that area. Just picking a thing, I don't even know what factories are there. People are working in that, in those factories can bring their kids. Drop them off in one community child care center because, you know, there's not going to be everybody's not going to have a kid drop the kids off in that community center, all the companies in that area contribute to building and managing the child.

And what they get is some sort of a subsidy from government to pay for this child care center, along with the companies there. That's how you get, you deploy the maximum number of labor into our economy.

Michael Marks: Well, that makes a lot of sense. How do you feel about the work at home thing? That's happened since the pandemic.

Is that helpful in this case?

Indra Nooyi: Well, again, what happens is the work from home only applies to the managerial layers, right? A frontline worker cannot work from home. So if you want to be a real servant leader, you've got to come to work and show that you really care about the worker, not roll out of bed, get on a zoom and roll back into bed.

So I think that in one way it helps families with children because you can actually Sort of juggle all of your priorities, but think of the person who's working from home if they have child care responsibilities or senior care responsibilities it actually Doesn't help them because they cannot have focused time with their remote device to participate in the job on the other hand if they had a community based child care or community based elder care You They can now work from home with their device, but can give the job, you know, dedicated time.

So I think first of all, we have to separate the frontline from the office workers. And the thing I would say, Michael, don't ask for remote working all the time and then expect it to be promoted rapidly. It doesn't work. Right.

Michael Marks: Right. I agree. Look, these are complicated issues and nobody's deal with them differently.

And I think, I think just the dialogue we're having is, is a good dialogue to have. So people are well aware of the issues. So before I get onto our last topic, one, one more on this one, why are there so few women in your view in the investment business? I mean, there just aren't, you know, we, we keep looking for women to hire ourselves and they're just not very many people.

Is it, is it a lack of interest or is it a lack of, I don't know, barriers as you talked about earlier? 

Indra Nooyi: Well, look at yourselves. There's only 2. 4 percent of venture funding that goes to women. So women don't get the foot in number of people in venture capital itself women in venture capital is highly limited and many of the women I talk to say that when they go to work in Venture capital, they are basically, uh, shunned.

They're not treated as equals. And so I think the culture and VC has to change or not. It's your call.

Michael Marks: Well, we're trying to change it. It's just, there's, there's not a good pipeline. I would say, you know, there's just not a good pipeline of people to hire. And we want to, but you know, you need a lot of people around so that you can pick ones that fit your particular organization, your style, your culture, and not have to make compromises in those areas just to have a woman in the place.

Indra Nooyi: But change your culture to accommodate. All kinds of talent. I'm saying don't focus on women or men. Focus on the best talent.

Michael Marks: You correctly say, let's not make this a gender thing. Let's make it a talent thing, and a diversity thing. So that kind of leads me to the last subject. It's interesting to talk about geopolitics.

We obviously are in a period of time where there's, you know, lots of political issues and lots of division and, and, and, you know, now there's all this stuff about tariffs and not tariffs and, you know, this and that, you know, you run a company. That had, I think, operations in 180 countries. And so you, you're a very good person for me to ask this question.

How do companies think about operating in every country in the world? You have a unique perspective on this.

Indra Nooyi: I think that we're asking questions now on what is the future of the multinational.

Michael Marks: Right.

Indra Nooyi: Okay. Because as a consumer company in every country we operated in. We 

operated as a local company, which brought to that talent.

Michael Marks: With local talent.

Indra Nooyi: Mostly local talent, local products. But what it was is built on a platform of global products. So, for example, we would develop the best potatoes to make the best potato chips, but all the flavoring would be local. So you had to give a very local presence because we source potatoes from local farmers. So we had to learn how to work with local farmers.

Our customers were all local. Our tastes are all local. So I think we had to figure out how to leverage the best of global, but be very, very local. Our advertising was local. So I think we are going from a world where We all accepted that the world is flat because it is flat. You cannot contain anything within national boundaries.

And we encourage companies to go global. In fact, if you didn't have a China strategy or Russia strategy, you were considered not an investable company. We've gone from there now to talking about border national borders. And erecting walls and tariffs, right? I can understand why that's happening. Michael.

I can understand You know why I you know protection of ip is all important, but we have to think hard about What kind of a global business model do we want coming out of all of this.

Michael Marks: And what do you think that is? I mean, you know, everybody's struggling with these things and doesn't really know what to do.

And today in the companies we work in, most people are just avoiding China just because it's complicated. And that's how I feel about it. Not that, I mean, I loved working in China. I had a huge population in China. You know, love the people there and everything, but there's just so much noise around it.

It's just easier to avoid it. Is that the right answer? Is that a wrong answer?

Indra Nooyi: It's a difficult answer because what we don't want is two digital standards. One for China, one for the rest of the world. What we don't want is China trading with a bunch of countries and developing Chinese based multinationals.

And then there's Western based multinationals. What you don't want is two worlds emerging because people are not going to ignore 1. 1 billion people in China. Right. Right. Right. Okay, that's not going to happen. So I think we have to think about this craftily, intelligently, strategically, and say, what's the best way to operate with partnerships and joint ventures in China so that you're not totally exposed, but you're still serving the market and getting the benefits from it.

And what can you get from China to help the rest of the world? It's not an easy solution, but I think, but I think ignoring it or creating two Or worse, it's not a good idea either. That's not how multinationals operate.

Michael Marks: I don't think it's possible. I've written an article recently where I say it is not possible. It is not possible to separate the supply chain.

Indra Nooyi: Well, the other thing too is a lot of our day to day products come from China. And let's not forget what the impact on inflation would be if the prices of those products went up a lot.

Michael Marks: That's exactly right. I, you know, people don't realize that over the, you know, the 20 years when I was running Plexronics in the last 20, 25 years, the fact that so much production took place in a low cost location is why Microwave ovens used to cost 1, 000 and now they cost 50 and the same for televisions and for that matter the same for cars and all this stuff has really improved the standard of living by having these lower cost products and I think that it's not in the public discourse that reversing that is not necessarily in the best interest of the person in the street.

Indra Nooyi: But I don't think we can reverse it either because we don't have that kind of a labor pool or cost structure to bring them all on shore again. So this is why I think we have to think about it very intelligently without sacrificing Or, uh, giving away our technology for free. I think we have to think about this very, very carefully as a country.

Michael Marks: Well, it's an interesting thing I point out because when everybody talks about reshoring the jobs to America, I point out the inconvenient fact that there are 600, 000 manufacturing jobs in the United States that are unfilled right now. And the prediction is that's going to 2 million and that's without bringing back other industries here.

So if we may not be able to do it, even though it's a popular, It's a popular discussion. Well, if you were still running a co, a company with 180 countries, how, how might you be thinking differently about how to manage that?

Indra Nooyi: You know, many, in many cases, I think company CEOs today, uh, either, uh, benefit or are a victim of the foreign policy decisions made by the country of the domicile, right?

So CEOs can no longer make decisions on their own. You know, governments tell us when they're subject to sanctions, countries are subject to sanctions, therefore you have to withdraw. So I think in the past we used to talk about what foreign policy should companies have. Now you're either a product or a victim of the foreign policy of the government.

Of, you know, of the country of your domicile. And so I think that as an American company, what the American government lays out as a framework for us to operate internationally is what you, you would have to follow. There is no way that if I was running a company, I would go against that at all. Never. I may be a multinational, but I still am an American company, domiciled here, selling overseas and manufacturing overseas.

So I would have to work within those bounds. Right. Is it going to impact my growth? Yes. Um, and would I hope that the situation will change? Yes. But that's a reality, Michael. We all have to work with it.

Michael Marks: Yeah, it's really gotten to be a complicated world, but you know, we, we have our economy still doing great and all of that.

My final question for you is, you know, you grew up in India, you moved to the United States, you have that experience. We at Celesta have made a number of really good investments in India and are And are doing more as a part of our fundraiser, raising India specific fund. How do you feel about what's happening in India?

And, and, uh, you know, we we're seeing lots of wonderful things, but it's a complicated place. And, but India, US quarters become a very important geopolitical part of the world. So what's your feeling about that?

Indra Nooyi: I agree with everything you said about India. Also, India has a demographic dividend still. Yes.

And so India is a very promising market, but India is also a conundrum because it's a country that has a developed market, a developing market, and an emerging market. I think of the 1. 4 billion people, I think you've got about seven to 10 percent which is developed. about 30 to 40, which is sort of the middle class, which is developing.

Then you've got a large 50 percent of the population, which is still emerging. So there isn't one India, first of all, and my experience looking at history, I don't know of a single emerging or developing market that became developed without disciplined democracy. Under straight democracy, they never came out.

Disciplined democracy is needed. So I think the way India gets. To a larger number of people in the developing and developed. It's important to lift the people in the emerging market status to developing is stay within the rules of democracy. Very important. Free markets, very important, but practice in a disciplined way so that you have infrastructure investments.

You have technology investments. You have a structure for what you're investing in. Rebuild the education system, rebuild the medical system, the healthcare system. I think India has to do. Democracy with discipline, and if they follow a well laid out path, because these are all multi year projects.

Michael Marks: Oh, sure.

Indra Nooyi: India is going to be one of the, you know, shining stars. But if India goes back and forth on the plans and, you know, starts and stops and puts, you know, unnecessary regulation on industries or doesn't look at other industries, You will have a mess.

Michael Marks: Well, Indra, thank you so much for doing, what a, what a fascinating, wide ranging conversation.

It's just a real personal pleasure, uh, as well as a business pleasure to have you, uh, on this podcast. And before I let you make your last remark for the listeners here, do go read My Life in Full. It was a book Indra wrote about her life starting in India and all the way through the rising of the ranks of American corporations.

It's fascinating and I recommend it. I read it. I loved it.

Indra Nooyi: Michael, thank you for all your comments and thank you for your friendship. And it's a real privilege to be on this podcast. So thank you very much. Take care.

Michael Marks: Thanks for tuning into the Tech Surge podcast from Celesta Capital. If you enjoyed this episode, feel free to share it, subscribe, or leave a review on your favorite podcast platform. We'll be back every two weeks with more insights and discussions of all things deep tech.

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