At a Glance
- Former PepsiCo CEO says much can be done to improve the executive pipeline for women
Indra Nooyi says diversity within companies isn’t just the right thing to do. It’s a business imperative.
“If you want the best and brightest in your company, you have to draw from the whole population,” the former PepsiCo CEO told us in an interview.
Citing that 70% of high school valedictorians in the U.S. are women, she suggests companies not actively recruiting and developing women leaders are doing so against the interests of the organization.
“If you decide you don’t want a diverse workforce — let’s start with gender diversity — that means you’re saying ‘I’m going to recruit people who are not as smart, and build my company based on that.’ It makes no sense.”
Nooyi is recognized as one of the most successful executives of her generation. In her 12 years at the helm of PepsiCo, she oversaw 80% growth in revenue for the company, along with several key acquisitions like Tropicana and Gatorade.
And as one of relatively few women CEOs to lead major corporations, she has been frequently named to many “World’s Most Powerful Women” lists.
Data backs up her assertion about the importance of gender diversity. Research suggests that a workforce rich in gender diversity improves overall firm performance, makes companies more creative and innovative and attracts more top talent.
In the interview, Nooyi also shared her view on why more women aren’t reaching top executive jobs.
“(Women) come into jobs in large numbers, and then the pipeline is broken. It’s not leaking, it’s broken,” she said, adding that many women leave the workforce or the executive pipeline for reasons ranging from pressure to balance work and family to bias within a company’s culture.
Indeed, women lead fewer than 6% of the top 3,000 companies in the U.S., according to a study by The Wall Street Journal. A study from Boston Consulting Group concluded that company culture has a big impact on the executive pipeline. It found that at companies that had more diversity in executive roles, 85% of women sought a leadership position, compared to 66% at companies with less diversity at the top.
Along with establishing a diverse culture, Nooyi says addressing factors like flexible work hours that allow men and women to balance family obligations with executive aspirations is an overdue change needed in corporate offices.
“It’s high time we stop talking about it, and started to get to solutions,” she says.
Watch her full remarks on diversity in the workplace above.