Former Yum! CEO shares three leadership lessons at MUFSO

Recognition is the secret weapon to winning in the hospitality business, according to David Novak.

The co-founder and former CEO of Yum! Brands, speaking at the recent MUFSO conference in Dallas, is an evangelist for employee motivation through praise.

“Every leader casts a shadow,” Novak told the audience. “You set the tone for the company.” And one of the essential elements of that tone is creating positive energy, the by-product of a recognition culture.

“You have to take people with you to make big things happen,” said Novak, who retired from Yum! In May 2016. “You have to get your 'people capability' right to give customers what they’re really looking for.”

Novak outlined his three-pronged approach to leadership.

Know thyself. Leaders need to know themselves, their strengths and weaknesses, and see themselves as a work in progress. Novak said over the years he prompted members of his team at all levels to be honest when asked what they thought of him as a leader. He also asked what they would do if they had his job. “It’s amazing how much feedback I got,” he said.

“I really feel that understanding who you are and seeking out feedback helps you become a better leader,” Novak said.

View the business as a marketer. Novak, whose career began in marketing, said marketing skills come in handy to engage both internal audiences (employees) and external (consumers and franchisees). He provided several examples where marketing research and techniques helped turn around consumer or franchisee acceptance of products (Taco Bell’s introduction of a new quesadilla and stuffed burrito, and the rollout of breakfast).

Create a team atmosphere. “If you want to connect with others, you need to create a team environment where everyone connects at every level of organization,” Novak said.

He recalled when he first took over the KFC system and inherited a struggling system and poor morale. “It was the perfect opportunity to use recognition to fire up the organization,” Novak said. Looking for something more memorable than an employee or franchisee of the month plaque, he settled on a rubber chicken, which he presented to honorees along with $100.

“It’s amazing how this little floppy chicken lit up the place,” Novak said. “People were crying tears of joy. The gesture, along with other business moves, such as working more closely with franchisees to develop new products, turned the brand around.

Novak later introduced similar kitschy awards — a giant cheese head for Pizza Hut and the Yum! leadership award, a set of chattering teeth with legs — and ultimately doled out more than 42,000 of them over a 15-year span at Yum! The awards have inspired even more awards worldwide across Yum!’s brands.

Photos of the winners have covered the walls and ceiling of Novak’s office at the corporate headquarters.

“There’s no question in my mind that recognition is the soft stuff that drives hard results,” Novak said.