People think that Coca-Cola is a bigger company. But did you know that PepsiCo’s annual revenue is more than double of Coke’s?

PepsiCo and Coca-Cola were neck and neck in 1995 when Nooyi was made the head of strategy. It was Nooyi’s strategic planning and acquisition of Tropicana, Quaker Oats, Gatorade that made the difference.

Nooyi was known not only as a great strategist but also as a great team leader. She attracted a lot of smart folks and created an environment in which people didn’t want to leave. But how?

Nooyi becomes the CEO

In 2006, Pepsi was looking for its new CEO. The race was between chief strategist Indra Nooyi and head of international business Michael White. And Nooyi won the job. But you know the amazing thing? She convinced White to stay on as well. Michael White did not quit even though he lost the spot of CEO!

How? By showing him appreciation. Nooyi showed to the whole world publicly that White mattered to PepsiCo, and praised him effusively during the first investor call. 

Fixing a sinking ship

36 year old Michael Abrashoff was made the captain of USS Benfold. The ship had a disastrous reputation. It managed to retain only 28% of its officers- 72% refused to re-enlist for an additional tour!

Abrashoff changed that. And in a year, got the retention rate up from 28% to a miraculous 100%! Everyone re-enlisted under him.

Because Abrashoff praised people. He praised them publicly and he praised them to others.

On average, the ship captain is authorised to give out 15 medals per year. Abrashoff gave out 115! He would deliver a short speech describing the recipients hardwork and camaraderie. Gave specific details, big or small. This worked in changing the whole morale of the ship.

• People perform better when they are complimented.
  
• Second hand compliments work even better in boosting performance – when they are relayed to the person being complimented.
  

Nooyi retains all her key people

Indra Nooyi did something similar. But instead of giving medals, she wrote letters. Letters praising someone who was just promoted to her leadership team. But instead of addressing these letters to the concerned people, she addressed it to their parents.

She wrote a letter telling the parents how proud they should be of their son or daughter! 

Action Summary:

• Compliment people to other people. Be specific and sincere. Nothing works better in retaining people.

• Indirect recognition improves morale. Because it looks less like flattery and more like authentic praise. It reinforces good habits, as well as creates an environment of positivity.