HOMETOWN: born in Beeville, Texas, and lived in 23 states by the time he reached the seventh grade

EDUCATION: University of Missouri, bachelor’s degree in journalism and major in advertising

PERSONAL: married with one daughter

HOBBIES: golf and charitable works including considerable personal support to the United Nations World Food Programme and Dare to Care Food Bank hunger relief
CAREER HIGHLIGHTS: being mentored by the late Andrall “Andy” Pearson, who served as the founding chairman of Yum! Brands upon its spinoff from PepsiCo in 1997


David Novak, chairman and chief executive of Louisville, Ky.-based Yum! Brands Inc., oversees a system of more than 38,000 restaurants that rang up nearly $10 billion in sales in 2010, but he sees another big number as the key to his company’s success: 1.4 million, the number of Yum employees. A company as large and diverse as Yum only achieves operational know-how through developing and connecting with its people, Novak said.


Novak has preached this philosophy for 14 years in his leadership program, “Taking People with You,” and earlier this month, he published a book by the same name. He has taught the program, which is built around recognizing employees and developing their talents, across Yum’s worldwide system, most recently in China, Germany and at a gathering of KFC’s domestic franchisees.


Looking at Yum’s struggling system in the United States, the upstart markets in Yum Restaurants International, or YRI, and its booming divisions in China and India, Novak said his leadership philosophy would apply to all parts of Yum’s business in the coming year.


The overwhelming majority of general managers at Yum restaurants in China and India are sought-after college graduates, he said, and while each one of Yum’s brands looks completely different in each of the dozens of countries in YRI, the quest for operational excellence remains the same. In the United States, Novak expressed confidence that greater alignment between the company and its franchisees would spark renewed growth and turn around a rough year of negative same-store sales.


To steal a question from your book, what’s the single biggest thing you can imagine that will grow your business?


The single biggest thing I can imagine is that we continue to build the top people capability in our industry. If you get that right, you satisfy more customers and make more money. We make upgrading that capability our highest priority. I always say, “Show me a great restaurant, and I’ll show you a great leader.”


The fact that we have unparalleled people capability is behind our success in China, India and other emerging markets. With the launch of “Taking People with You,” we have guides for every restaurant general manager, and we’re cascading the training guides around the world in 11 different languages. We’re asking them to accomplish the single biggest thing that makes their restaurant more excellent. It might be improving speed of service or finding the right labor productivity for 24-hour service, but each GM will have his or her plan to get to that operational excellence.


With a company as big as Yum, how do you form one leadership vision that speaks to all facets of your business domestically and internationally?


That vision is to be “the defining global company that feeds the world.” We have three leading brands in 117 countries with 1.4 million employees, so if there’s any company that can be that defining global company, it’s us. We want to create a famous recognition culture where everyone counts.


We also want to be a company with a huge heart. It starts with the jobs we have when we open tremendous stores around the world, where people can grow and go up the ladder.


We’re also very decentralized, but operational excellence is our common denominator. A vibrant brand may differ — from KFC in the U.S. to KFC in Africa — and we expect our teams to find that out. How you’re vibrant depends on what your consumers tell you in your local market. What I do with all my GMs around the world in my coaching sessions is ask how they are making the defining global company goal come alive in their piece of Yum. If everybody drives against that vision, we’re moving as one.


How did you achieve more unity of purpose with KFC’s franchisees in the United States, which you mentioned at Yum’s investor conference?


Our new president, John
Cywinski, has worked tirelessly in the last year, meeting with franchisees and learning what their ideas are, the first of which is getting more committed to operational excellence in our restaurants. The franchisees are investing in new IT and holding cabinets, making sure our customers get a reliable experience. There is a lot of passion and alignment in that.


Second, we decided to have more unity of purpose around our marketing fund, and increased the national contribution from 2 percent to 4.5 percent. We have a lot of wood left to chop yet, but one of the things we know is that it’s much better to build this business together. John basically took a page out of the book and built, aligned and galvanized the team of franchisees. He asked me to reinforce it. Change is never over; you have to follow up. But this gives us hope that we can do things to move the brand forward.


In the parlance of your book, Yum could have gone for “first downs” at Taco Bell, like beating easy comparisons from 2011. So why is the company going for “touchdowns” with the Doritos Locos Taco and the Chef’s Signature line this year?


The thing we’re most proud of at Taco Bell is we’re top-tier among U.S. QSR operators in speed of service and order accuracy. As it relates to going for “touchdowns” and “first downs,” you want to be responding to the voice of the customer and looking for ways to excite them. You can’t sequence that. We went to Frito-Lay and developed this product as an effort of our ongoing pipeline process, and it happens to [be rolling out] next year.


We think this is a new platform for tacos, and it’s a “first down” that is going to lead to more and will always be in our arsenal. Bringing innovation to the taco shell is a big idea, but it’s also an enduring idea, not a novelty product. The celebrity chef stuff is our ongoing effort for quality improvements at Taco Bell. Having better beans, pico de gallo and guacamole, while staying true to Taco Bell’s value heritage, are building blocks for the future. A taco nobody else has, new ingredients with value and operations excellence will drive us.


And Pizza Hut in the United States?


The Pizza Hut U.S. team has done an outstanding job, and we expect steady growth in the year ahead. You’ll see some signature innovation around value. In the past few years we’ve added wings and pasta, so now we’re pizza and more. We have a phenomenal relationship with our franchise partners, and they’re more fired up for growth than they’ve been in recent years. 


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