Indra Nooyi just issued a major challenge to the world's CEOs

When you talk to CEOs about what's coming next for their companies, you typically get the 18-month plan or the someday-maybe plan. The first is a set of achievable goals, based on everything going right; the second involves going to Mars — a 10- to 20-year- vision that is more rallying cry than roadmap.

PepsiCo CEO Indra Nooyi, on the other hand, has managed to combine both metrics and mission. Earlier this week, she unveiled her 10-year goals for the $65 billion-in-expected-revenue snack-and-beverage giant. Called "Performance with Purpose," the plan involves a set of targets that can only be achieved if people change their diets, farmers change their practices, and managers keep changing how they think about their role.

Some of the details: By 2025, at least two-thirds of PepsiCo's beverage portfolio will have 100 calories (or less) from added sugar; in high-risk water areas, 100% of the water used in manufacturing will be replenished; the company will invest $100 million in initiatives that benefit 12.5 million women and girls globally. There's plenty more in the document.

This is Nooyi's second time issuing a Performance with Purpose blueprint— she released the first when she became CEO in 2006 — but this time she was even more blunt about how her plan extends beyond Pepsi's offices and supply chain.

In her opening letter, she threw down the gauntlet for other CEOs, challenging them to fill a void left by depleted governments and distrusted agencies. "This approach is the only way to run a successful global corporation in the 21st century," she wrote. "We are seeing levels of political and economic volatility that we have not confronted for many years. Technological change is disrupting entire industries. Governments are facing budget shortfalls. And trust in institutions is near all-time lows, as consumers increasingly expect companies to make money in a way that does not burden society."

Nooyi visited LinkedIn's NYC offices to talk about why she's certain that PepsiCo's way is the only model that works, what her experience dealing with activist investor Nelson Peltz earlier this year taught her, and how she's confident that she can build trust in PepsiCo at a time when people are suspicious of powerful groups.

Edited excerpts from the video:

Dan Roth: Can you go back to when you first started as CEO and explain why you decided on a 10-year plan?

Indra Nooyi: As companies, we operate with a license from society. It's very important that we worry about the communities and societies we operate in. As I became CEO in 2006, I started to think about what kind of a company we wanted to build.

It became clear to me that Pepsi would always deliver great financial performance, but with the changing world, with the millennials having very different expectations of companies, it was critical that Pepsi Co also becomes a company that cares for the communities and societies it operates in, besides it's own big one.

We had to change the frame of reference to say it's not how we spend the money we make, it's how we make money. Performance with purpose was born, but words alone don't make something. We have to issue metrics, and talk about when we get there. These are not short, temporal plans, these are long-term programs where we have to put our money behind it, we had to change the culture of the company. We had to change everything we were doing.

DR: So a manager comes to you and says, "We're going to have incredible sales but we didn't meet the environmental metrics," you would be disappointed?

IN: I would be disappointed. You know why? Short-lived performance doesn't do any good. Because if we didn't reduce our water footprint, it's just a matter of time before our plant gets shut down in water-distressed communities. If we can't address sustainability in our supply chain, sustainable agriculture, it's just a matter of time before NGOs are outside our office protesting and forcing us to be shut down in various countries of the world.

I often ask my employees to question, "If I were to take all of those bottles and put them in your backyard, would you like it?" Absolutely not. If you wouldn't like it we can't put it in anybody else's backyard. I'll go so far as to say that the millennials today that come to work at PepsiCo because of performance with purpose.

DR: Did you learn anything from doing the first PWP plan that you changed with this new one?

IN: In many ways the next 10-year plan is a continuation of the first ten years with some changes. What we are doing now is refining the goals because we've now been informed by the World Health Organization's goals, Institute of Medicine goals, the [UN's] Sustainable Development goals. We've got all of these external bodies that have articulated goals. We've used that to inform our goals so that we are lock-step with those goals and we're actually helping multi-national organizations move their agendas forward as opposed to all of us doing our own thing.

DR: You had to change Pepsi's culture the first time around; what about this time?

IN: I'll give you the good news and the bad news. The good news is that if we change direction away from performance with purpose I will lose a lot of good people. It is so ingrained in every part of the company today, and that's what makes me so emotional about it.

The few holdouts, about three or four years ago I told them that the time for holdout is gone. Because you can hold out for a while. It's okay, because it's good to have the skeptics; trying to convince them to change is a great learning experience.

But at some points you've got to say "It's time for retirement parties." Those holdouts we've been retiring one by one. And they've got to go because you can't poison a good thing.

DR: Were you explicitly trying to challenge other CEOs to follow your path?

IN: Most certainly yes. I think today, where the world is, the issues we're facing around the world and the fact that we don't have money available in government exchequers — I think it's critically important corporations step up and do a lot more than just say "the all-mighty buck and the short-term." We cannot keep passing costs off to governments. Governments don't have the money to fight it. We can't keep kicking it down the road. Because somebody else is going to have to address it.

DR: You just completed a battle with an activist investor. You're talking about these long-term goals, but you also have Wall Street demanding short-term results. What advice would you give about how to handle the competing demands?

IN: First have a crystal clear idea of where you want to take the company. This strategy and vision for the company has got to be the most vivid picture that you can come up with. You've got to feel passionate about it, and get your board behind it. Once you've done that, you've got the best supporters you've ever wanted. I had my board of directors. If the board was not behind me there's nothing that I could have done.

Any short-term investor that comes in and says do something to benefit that investor in the short-term, the board's not going to accept them. Absolutely not. It's been proven. Absolutely proven out. Look at our performance. It's been stellar only because we've been singularly focused on performance with purpose. Our key competitors who have not been focused on that are having difficult times.

I told my people, "Let me fight those battles with my CFO. You guys just focus on delivering performance consistent with performance with purpose. Just keep focusing on that. Let me fight everybody else."

DR: You're talking about long-term trends, but don't you worry about getting too far out ahead of your customers?

IN: I have the reverse problem. They're ahead of me. When they start to eat healthier and exercise a lot more we have to change. I'll tell you what we have to look at is secondary growth areas that could have an impact on us. Exercise equipment, Fitbits, membership in these exercise clubs are all growing. That's an early warning indicator that people are going to eat and drink differently.

If people are beginning to consume products bought in different channels than the traditional grocery or convenient stores you're going to worry about what kind of channels they are. Whether there's a Whole Foods, Trader Joe's kind of channels, and what does it mean for our products? We look at these. We look at school textbooks. What are schools allowing in their schools to be sold, because that's an indication of what's coming. These kids are going to grow up with different eating and drinking habits. We look at all of these secondary issues.

DR: When institutions look at what Pepsi's doing, they say things like, "Well Pepsi is trying to stop funding for any kind of research into sugary drinks. Pepsi wants to get sugary drinks in schools."

IN: There will always be critics and I can't stop them. I tried. I can't stop them.

All I can tell you is only 12% of our revenues come from Pepsi, and our soft drink portfolio is less than 25%. Almost 50% of our portfolio is what I call "guilt free" products. Either they're truly nutritious, or below 70 calories per 12 ounces. I feel very good about this portfolio, let me start there.

Secondly, people always question large companies. We fund organizations to do research, yes. In the short-term, if we see taxes being implemented to raise revenue, not to address public health issues, we don't like it because you don't simply tax a category willy-nilly just to raise revenue. If you're all addressing a health issue, obesity, it's a very complex issue. Lets address it holistically.

I think the time has come to say the food and beverage industry, especially in the United States, is leaning in to do the right thing.