Organizing Your People With Care

Indra Nooyi

Lesson time 07:18 min

Organizational changes are part and parcel of building a business. In this lesson, Indra shares her process of working through growing pains and transitioning to new organizational structures.

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Topics include: Organizational changes are part and parcel of building a business. In this chapter, Indra shares her process of working through growing pains and transitioning into new organizational structures.


[MUSIC PLAYING] INDRA NOOYI: Alongside the transformation brought by performance and purpose, we were also going through rounds of organizational change when I was at PepsiCo. Organizational structure change is a painful process. It's a process that takes time, because there's time and the design, the time and the implementation, time it takes for the organization to settle down, time it takes for the organization to deliver results. So when you go to an organization design, just know that you've got to have a really good reason why you're affecting an organization design. And how are you going to rewire all the processes when you reorganize the company? Let me give you an example. Why do people reorganize? So one reason is the business has changed. And that requires a different organization structure to approach the business. For example, let's say that you've now got a much bigger global business, where in the past you were just a North American business. You now have to take the international businesses out from under a global business head and put it separately as a North American head and international head. So it's rewiring mindsets, it's rewiring processes, it's creating new processes for international, because it's not one country, maybe 50 countries. So how are they going to develop plans for 50 countries? Roll it up for regions into an international P&L. That's a real challenge that has to be thought through. The second reason you undertake organization change is because you want to delayer the company. Because either you need more agility, more flexibility, or the layers resulted because of organizational drift over time, which happens in most companies. That again is painful. Because the layers you remove is not a layer of vegetables or cheese, it's people. You're removing people. The work that these people were doing is going to go away or somebody else has got to do some version of the work. A third reason people reorganize is to set up an organization to create bigger leaders. Sometimes you take two divisions, combine them together and say, I want to put somebody over these two divisions because I want to see if this person has the ability to become a CEO or a bigger leader. Or you might take a functional leader and give them dual responsibility for a business and a function. So there are a lot of reasons why reorganizations happen. But just keep in mind, every one of them require people change, process change, time and care to communicate it, to nurture it through a change management process, and then within a year, to make sure that it's well grooved and it's functioning. In my 12 years as CEO, probably did about four or five organizational changes. We just had to do it. As we grew, we changed. We had to make the organization changes. See, young companies when they get started, don't even think about organization. We think about hierarchies. We think about organization charts. They think...

About the Instructor

Ever wonder what it takes to be the CEO of a Fortune 50 company? Indra Nooyi didn’t set out to become the first woman of color to do so. She simply (and tenaciously) focused on big ideas. As the former CEO of PepsiCo, Indra transformed a global industry. Now she’s teaching you her transformational approach to leadership. Learn to simplify complex problems, persuade others to buy into your vision, and discover how leading with purpose can improve your life beyond the boardroom.

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Indra Nooyi

Indra Nooyi, former CEO of PepsiCo, teaches you to think big, be brave, and make purpose-driven changes at work.

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