When Indra K. Nooyi was named CEO of Pepsi this summer the moment did not pass without fanfare in the U.S.A. or India. While Nooyi’s ascension to PepsiCo’s throne is based on the merits of her impressive corporate career, in a single instant she catapulted from relative obscurity to become the embodiment of diversity on the world’s corporate stage.

These days, diversity is a word that receives a lot of lip service but little action in corporate board rooms. Yet in hiring a highly qualified woman of Indian origin to lead the $33 billion food and beverage company, PepsiCo has shown that diversity is a strategy and not just a marketing slogan.

Tapping the global talent pool is a hallmark of PepsiCo’s business and technology services strategy.

“They [PepsiCo] have rich and broad definitions of diversity and they encourage that not just in the U.S.A., but around the world,” says Gerry Crispin, Principal, CareerXroads, a New Jersey consultancy.

While one appointment doesn’t indicate a sea change in corporate America, every trend has to start somewhere.

Yet given that PepsiCo’s international group contributes just 37% of revenue, it is clear that the organization is globalizing its services because worldwide sales have an enormous upside. On the other hand, managing a company that has 157,000 employees and sells beverages in 200 countries with a centralized, U.S.-knows-best strategy would be an unworkable approach.

As the company plans for growth in its global units, it is also choosing to rely upon third parties to help provide the technological underpinning. On the heels of Nooyi’s appointment in August, Pepsi unveiled two large IT outsourcing contracts in her former unit, PepsiCo International:

A Good Beginning

Nooyi has taken charge at a time when the company is riding high. She is not coming in as a savior but rather as a visionary and strategist who can help the company ramp up its worldwide growth.

In mid October, PepsiCo posted a 71% increase in third-quarter net income, beating Wall Street estimates. Each of its businesses had strong revenue gains, and its international business did especially well, with double-digit sales and operating-profit gains. “We are very confident in our outlook for the balance of the year as all our businesses are performing well,” said Nooyi in a statement.

Despite the rosy performance, on a call with analysts and investors, Nooyi made clear that the company is pursuing supply-chain improvements worldwide. Operating profit in the company’s international division grew 17% in the third quarter, led by double-digit growth in Russia, Turkey and Egypt. International beverage volume grew by eight percent, driven by mid-single-digit growth in carbonated soft drinks and double-digit growth in noncarbonated beverages.

Wall Street analysts generally praise the company’s ability to innovate in the face of cost challenges and competitive pressures, as well as its marketing savvy. “PepsiCo has always been ahead of the curve,” says Bonnie Herzog, an analyst at Citigroup Investment, in a broadcast interview. “[Nooyi] will pursue new products and markets, whether through joint ventures, partnerships, or technology sharing agreements.”

Beyond Symbols

Her predecessor, Steve Reinemund, who will remain as chairman until May 2007 says Nooyi “… has a sharp talent for turning insightful ideas and plans into realities and for developing and replenishing our talent base.” Serving in increasingly higher responsibility positions, Nooyi directed PepsiCo’s global strategy for a decade.

Nooyi, a mother of two, who wears a sari at work, reportedly said the following about her opportunity to succeed overseas: “If you want to reach the top of a company, I agree that it can only happen in the United States, but you have to start off saying that you have got to work twice as hard as your [male] counterparts.”

PepsiCo is not just relying on the goodwill of its managers to enforce its policy of hiring and promoting women and minorities; management bonuses are tied to it, too.

PepsiCo’s commitment to diversity extends to the rest of its boardroom. Crispin notes that half of the board is made up of women and minorities.