Indra Nooyi Module 4: The evolving workplace

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The pandemic changed the way people work, with a recent Vistage survey finding that 68% of CEOs planned to offer some of their employees the option to work from home in 2022. 

That could set a dangerous precedent, former PepsiCo CEO Indra Nooyi says. It could lead to a “two-class” system of workers and further organizational challenges down the road. 

In this module, Nooyi explores how companies can evolve the idea of workplaces so they promote both flexibility and the opportunities to build a strong culture.  

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Transcript of Nooyi’s discussion with Vistage CEO Sam Reese: 

Sam Reese: There’s this trend towards flexibility, working more from a home. Do you think this is going to be a lasting change in the workforce? And is this a good thing and something the leaders should embrace?

Indra Nooyi: I come from the older generation where I think coming to work makes a whole lot of sense because I love the human contact. I love shaking people’s hands because you actually feel a warmth. I love eye contact in person. I think when you bump into people in the corridor and discuss ideas, ideas flourish. You get to know people. Corporate cultures are developed when you actually meet face to face.

That’s the generation I come from, but today’s generation thinks you can do it all on zoom or whatever.

Here is my observation, recommendation, advice, whatever. The pendulum swung to everybody who works in offices, starting with incredible, you know, shutdowns. Everybody stayed home. Now we are talking about people saying, “All of you come back to work.” And then some people saying, “It’s a four-day week.” Some people are saying, “Those who want to come back, come back.” Others saying, “You know, these groups should come back the others shouldn’t.” So my point is the following.

The next year, let us experiment with every model, and let’s share all the best practices of these different models.

And then let’s evolve a model that works for society. And for each company for each vertical industry, for different workgroups, I think it’s going to be a different model. But while doing it, we have to watch out for two or three things. One, we should not create two classes of people.

Sam Reese: I worry about that, too. Yes.

Indra Nooyi: We shouldn’t have a situation where men come to work, women don’t come to work, and they work from home. And therefore you say, “They’re not committed to the workplace.” Second, don’t forget your essential workers are all coming to work every day. Your factory workers. Your truck drivers. Your route salesmen. They’re all coming to work every day. They shouldn’t have to always, you know, trough to work while the office worker rolls out of bed and sits on Zoom. That’s, again, a two-class society. And I think we have to think about this very, very carefully, Sam. I think this is the first time we’ve been forced to think about organizational design, workplace design, how to build corporate cultures — everything in a world that there’s no human interaction. We don’t even know who we hired, you know.

Sam Reese: No…!

Indra Nooyi: Companies hire 10,000 people. They’ve never met them.

You know, how do you imbibe the soul of the company to them?

Sam Reese: I love your guidance on, you know, wait a year because I think a lot of businesses are feeling like they’ve got to make some decisions because it can be a strategic advantage or disadvantage in acquiring talent or losing people because people are so often now — one of their first questions when they’re looking at a new position, is: “What kind of flexibility do I have?” You know, flexibility is becoming a big selling point for businesses right now.

Indra Nooyi: I’m all for flexibility. Don’t get me wrong, you know, for the workers who we can give flexibility to, but let’s decide where this flexibility pendulum is going to land and have some rules, okay? But here’s where I would suggest, you know. Let’s take an urban core. Let’s take FiDi, the Financial District in New York. If you took that block around the World Trade Center area. The businesses there should come together and talk about what are we going to do not just for our companies, but also to the urban core. Remember, there are so many small and medium-sized businesses depending on these people coming back to work. So let’s think about whatever decisions we make and what the impact it’s going to be on the urban core and the vitality of those businesses there.

I think people should think as a community as a society, not just say, you know, we’re coming back or we’re not coming back and get, let’s get rid of all the commercial real estate. I don’t think we can hollow out urban cores that way. So I think there’s some independent thinking of companies, independent experimentation, and there’s some joint thinking with the community that has to be done. But here’s what I would add.

If you want people to come in, give them a reason to come in. Give them a reason.

You know, if they’re coming in 3 days a week figure out how to give them childcare support either where they live or where they come to work. That way, they get a break and they can give their entire attention to the company. Give them a reason to come to work because they’re not coming to a company where it’s a hoteling system where every day you’re sitting at a different desk. Why leave home if you have to come to work and figure out some desk where you plug in a computer? If you can’t sit with your workgroup, if you can’t really exchange ideas with their workgroup, it’s a tough reason to come back to work. So I think we’ve got to get the psychologists, the sociologists, everybody together to say, “Why do we have a place of work? What does it do for you? And how do you make it inviting and exciting for people to come in, even if it’s for three or four days of the week.”

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