Former Yum CEO describes the one trait all leaders have in common
With corporate leadership becoming an increasingly scrutinized aspect of business culture, successful management strategies are in high demand.
In an Influencers interview with Andy Serwer, co-founder and former CEO of YUM! Brands, Inc. (YUM) David Novak discussed leadership qualities found in successful organizations.
At Yum! Brands, which operates the brands KFC, Pizza Hut, and Taco Bell, among others, Novak pioneered the principle of "purposeful recognition," which motivates employees via positive reinforcement and recognizing their achievements.
“When I was CEO of Yum brands, the thing that I was most proud of [was that] we had a world renowned recognition culture,” he said. “I mean, everybody in our company had their own recognition awards.”
Purposeful recognition is a crucial concept underlying good leadership, Novak said. “Every business has four or five behaviors [that are] usually the cultural behaviors that the companies want to drive in their organization; they will get results.”
At YUM! Brands, Inc., Novak grew the company from a $4 billion market capitalization in 1999 to almost $32 billion in 2016. He was lauded for his business leadership and role in promoting a positive recognition-based corporate culture. Chief Executive Magazine recognized him as "2012 CEO of the Year,” while Harvard Business Review included him on its list of the "100 Best-Performing CEOs in the World".
Novak, 68, reached such lofty achievements in the business world from rather humble beginnings. As a child, he moved often and lived in trailer parks. By the time he was in seventh grade, Novak had lived in 23 states. “We basically moved every three months,” he added.
“And my mom told me, I'm going to check you into the school, but you better make friends,” Novak said. “So that I think helped me tremendously. Because I had to go into new situations all the time, and read the lay of the land. And I think it really helped my people skills.”
Those people skills helped Novak ascend from an advertising copywriter at Ketchum advertising agency to his leadership position at one of the world’s largest restaurant companies.
After stepping down from Yum! Brands in 2016, Novak established his own leadership development brand called David Novak Leadership in 2016. He's \ also worked to educate others on business leadership through various other organizations including the Lift-a-Life Foundation, Lead4Change, Global Game Changers and The Novak Leadership Institute at the University of Missouri.
“Recognition is a wonderful way to really create a lot of fun in your company as well,” he said. “You want to take the business seriously, but you don't want to take yourself too seriously. And by having fun recognizing people and celebrating other people's success, we were able to get great results.”
Purposeful recognition can help raise performance in every facet of an organization, Novak said. “We used it to drive performance, but we recognize the behaviors that we knew would get great performance in our restaurants, team or positive energy, collaboration constantly recognizing people for doing good things,” he said. “So when we saw those behaviors, everybody recognized them. And guess what, everybody did more of it.”
Yet the first word of the phrase is just as important as the second, Novak noted. Recognition must be intentional and leaders must be dedicated to the cause. “It's critically important to every business leader,” he emphasized. “This is not something where you just say ‘Oh, I got to get a diversity officer and put them on this’. If you really want to make diversity work, [you have to] spend time on it.”
In the end, for David Novak Leadership, positive business culture is all about respect. Novak’s one piece of advice for business leaders?
“Treat everybody the same, no matter whether they're above you or below you.”
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.
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