The Pepsi generation
INDRA NOOYI, THE NEW chief executive of PepsiCo, isn’t just the 11th woman to lead a Fortune 500 company. She’s also the latest of a growing number of foreign-born executives who do so. Globalization may be a tiresome buzzword in some circles, but in corporate America it’s a practical necessity.
Nooyi was born and raised in India. Douglas N. Daft, her onetime counterpart at Coca-Cola, is Australian. Her counterpart at Coke now, E. Neville Isdell, is from Ireland. Secretary of Commerce Carlos Gutierrez, from Cuba, led Kellogg for six years; the late Alex Trotman, a Scot, was chief executive at Ford for five. M. Farooq Kathwari, from Kashmir, is the CEO of Ethan Allan Interiors, known for decades for its Colonial-style, quintessentially American furniture. Eli Lilly chief Sidney Taurel is Moroccan-born. Alcoa’s CEO, Alain Belda, is Brazilian. Step away from the corner office and the ranks of the foreign-born in U.S. companies grow even greater.
It’s no accident. Often U.S. companies see their fastest growth in foreign markets. PepsiCo, which has surpassed Coca-Cola in the overall value of its stock, is no exception. During the second quarter of 2006, its international division saw revenues rise 14% and operating income rise 21%. International operations contributed the largest component -- more than a third -- of the company’s overall growth. Analysts expect PepsiCo’s foreign businesses to continue to fuel growth for the foreseeable future.
The dynamic and challenging nature of these markets makes them great proving grounds for young, ambitious executives. And often these executives rise from the local ranks.
Nooyi, who early in her career worked for Johnson & Johnson in India, has been based in the United States throughout her 12 years at PepsiCo. But analysts say that her appointment sends a message that the company is serious about its continuing role as a global company.
Her rise is another reminder that U.S. companies’ success abroad attracts hundreds of talented executives to the United States, which is enriched by their wealth and expertise. For this reason alone, policymakers and business leaders must play nice at the globalization game. Caving to protectionist instincts and bashing foreign companies that hope to do business in the U.S. is bad enough when it cuts off Americans from vital international markets. It’s downright counterproductive when it encourages retaliation and closes foreign markets to U.S. multinationals such as PepsiCo.
It’s not just that it hurts corporate America’s bottom line. It could also impede the flow of talent that sends executives such as Nooyi to U.S. shores.
