Yum CEO: Know Your Employees

NRN.com|May 8, 2012 10:04 am EST

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Though he is the leader of one of the world's largest, most profitable restaurant companies, David Novak repeatedly told attendees of the National Restaurant Association's Restaurant, Hotel-Motel Show in Chicago that he could not accomplish anything as chairman and chief executive of Yum! Brands Inc. without his thousands of co-workers.

The theme of winning by "going from me to we" and creating a corporate culture built upon recognition was key to Novak's presentation, "Taking People With You," a live version of his book by the same name, which was published earlier this year.

"There's no way we can get it done by ourselves in this business," Novak said. "We've got to be able to take people with us to make big things happen."

Novak developed the content for "Taking People With You" more than 15 years ago, before Yum was spun off from PepsiCo. He has been teaching the course to Yum executives and managers all over the world since the company went public. He added that all proceeds from the book benefit Yum's fundraising initiative for the United Nations' World Food Programme, and this effort has earned more than $500,000 so far this year.

In order for companies to be successful, their leaders need to ask which of the companies' habits and perceptions need to be changed, built or reinforced, Novak said. Executives can determine that by involving and listening to their employees and guests, he said.

"If you listen to your customers, you can get some valuable insights," he said. "If you can solve the biggest, most important problem that occurs frequently with your customers, you unlock all kinds of growth."

Novak cited Yum's work several years ago to turn around sales at Taco Bell when a problem detection study led to the insight that the brand's customers found its products too messy to eat in the car. He said to make their products more portable and market them effectively, Yum began advertising its quesadillas as "the hottest new handheld this season" and developed the Crunchwrap, and same-store sales increases followed.

When Novak took that experience and applied it to his leadership style, he realized that he needed to think about his employees like marketers think about their target audience for new products and advertising.

"I had to get inside the heads of the people I lead and relay whatever we're working on back into how they think about the business," he said. "You have to know your people like you know your customers."

The most important way to affect that change at Yum was to foster a corporate culture built around recognizing employees for excellent performance and for their ideas, he said.

"As a leader or a coach, you have to start celebrating other peoples' ideas more than yours," he said. "The sooner you learn how to do that, the better the leader you'll be. It's more important for you to raise other peoples' ideas to get them excited about how they can contribute."

He ended his presentation with a story about basketball hall of famer Earvin "Magic" Johnson of the Los Angeles Lakers, whom Novak met long ago as a marketing executive for Pepsi.

Novak shared that Johnson learned how to be the "best passer who ever lived" because, as a child, he did not make friends by scoring all his team's points. By learning how to get everybody involved, Johnson not only won multiple NBA championships, but he also made teammate James Worthy a hall of famer and helped teammate Kareem Abdul-Jabbar set the all-time record for points scored, Novak said.

"Magic could have scored 40 points a game," Novak said, "but he knew it was more important to bring his team along with him. As a leader, you have to be able to score points. If you can't come up with an idea when nobody else has one ... then somebody else has to be the leader. But the biggest thing you can do is to get everyone involved to get the best possible outcome."

Louisville, Ky.-based Yum operates or franchises more than 38,000 restaurants worldwide.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN