Former Pepsi CEO: We need to address the U.S. child care cost crisis
Now that Indra Nooyi has finally had a couple minutes to come up for air after an intense climb up the corporate ladder that led to her leading the storied snacks and beverage giant PepsiCo as chairman and CEO for 12 years (and retiring in 2019), Nooyi is reiterating one of the biggest problems a society still gripped by a health pandemic faces moving forward.
The cost of child care is out of control (and has been long before the pandemic), and is pushing many women out of the workforce as they try to balance the dual challenges of home schooling and working from home.
"Organized child care is going to bring more of the people who left the workforce back to the workforce, and they all tend to be predominantly women. And the biggest crisis we have today is the cost of care is too high when it's available, most of the time it's not available. And even when it is, the quality of the care is not good enough," Nooyi told Yahoo Finance, following the release of her new memoir "My Life in Full."
Added Nooyi, "We have to address this on an urgent basis because we have an acute labor shortage. And a lot of that labor shortage is not shortage of people, it's a shortage of people who can come to work because they don't have an alternative."
The harmful effects on the female workforce due to the pandemic are starting to worsen, as detailed in a new study called "Women in the Workplace" by McKinsey & Company.
One in three women told McKinsey they have considered downshifting their careers or leaving the workforce this year. Early on in the pandemic, one in four were considering such a change. Moreover, four in 10 women have considered leaving their employer or switching jobs.
"The pandemic continues to take a toll on employees, and especially women. Women are even more burned out than they were a year ago, and burnout is escalating much faster among women than men," the report says.
One may look at Nooyi's impressive career on paper and think she doesn't truly know about the need for better child care in the country. But that couldn't be further from the truth.
Nooyi is one of the most distinguished corporate leaders of the past 25 years. But the road to reach the peak of her corporate career — chairman and CEO of PepsiCo — wasn’t easy by any stretch of the imagination.
In her new memoir, Nooyi recalls her childhood growing up in Madras, India (now Chennai). While Nooyi was always encouraged by her parents to seek out higher education, learning and to pursue her dreams, the social norm in India was the man of the household earns and the woman attends to family and home.
Nooyi chose a different path, however, in large part because of her own inner drive to succeed.
In 1978, Nooyi was admitted to Yale School of Management (which she attended via scholarship and school loans) and moved to the U.S. with only $450 to her name and no family in the country. It’s there where Nooyi’s strategic mind was shaped, leading her to become a sought-after candidate from several leading organizations. Yale is also where she met her husband of 42 years, Raj Nooyi.
Her early career had a focus on corporate strategy, including stints at Booz Allen, Boston Consulting Group, Motorola and ABB. Nooyi became a first-time mother to Preetha in 1984, and explains in the memoir the challenges of juggling work and motherhood in those early days. Most days Nooyi barely slept, working until 2 a.m., if not longer.
After Pepsi, Nooyi to continue 'progressing women in the workplace'
Nooyi is quick to say she is thankful for the support structure of friends of family, which allowed her to continue to charge hard in her work.
"I come back and say, yes, I was lucky. I had multigenerational family's support and neighbors and friends. I mean, I cultivated all of them. They just didn't fall on me, I cultivated all of them. And whatever stresses and strains go with multigenerational living, I was OK with it. It's just something we had to cope with. I think in today's world, we have to create those family structures either through community networks or through organized care support structures," says Nooyi.
Nooyi’s second daughter Tara was born in December 1992. By March 30, 1994, Nooyi was entering PepsiCo’s Purchase, N.Y., headquarters for her first day on the job as a strategy leader. She recalls there not being one female CEO leading a Fortune 500 company at the time.
The rising star wasted no time making a big impact. It was her detailed, strategy work that led to the decision to spin off PepsiCo’s restaurant operations in 1997 that consisted of KFC, Taco Bell and Pizza Hut. Today, that spin-off is known as the publicly traded Yum! Brands.
Nooyi wasn’t done shaping the modern day PepsiCo, not by a long shot.
In 1998, she led the spin-off of PepsiCo’s bottling group (and then bought it back as CEO in 2009). She also led the $3.3 billion purchase of Tropicana the same year.
In 2001, Nooyi found herself the lead negotiator in PepsiCo’s $13.4 billion acquisition of Quaker Foods (which included the real prize in the deal, Gatorade). By 2001, her dedication found her leading PepsiCo financials as CFO and having a major voice in other matters as a board member.
Nooyi went on to be named as president and CEO on October 1, 2006. Through her 12 years as CEO, Nooyi pushed PepsiCo deeper into healthier snacks and sought to introduce drinks with lower (or no) sugar counts. The company’s sales and profits rose steadily. PepsiCo's total shareholder return under Nooyi tallied 149% compared to 128% for the S&P 500. Along the way, she also successfully fended off two activist investor attacks (by the late Ralph Whitworth and more recently, Nelson Peltz).
Today, Nooyi tells Yahoo Finance she misses the people of PepsiCo but not necessarily the always intense job of CEO. She says taking another CEO job or role in government (the latter in which has long been rumored) is not in her plans.
"I think I'm just enjoying all the different things I'm doing. I've got this moonshot I want to take on, which is to bring together all the people who are working on the support of young families — not just females— support of young family builders, and progressing women in the workplace," says Nooyi. "And I'd rather work with them to move this agenda forward because so many women and young family builders ask me this question about how do we do it, how do we advance? And I think it's time that people like us who are in seats of power and who can now convene and talk about these issues and move academic research into action, we ought to do that. So that's what I want to do the next few years. And I'm going to have a purposeful and fulfilling time doing that."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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