Interface: Ken Blanchard
In Yum! Brands the consultant finds a case study in how to build a customer-focused company.

By Scott Hume, Executive Managing Editor

Since founding his consulting company in 1979, Ken Blanchard has been advising companies in person and through books, including “The One Minute Manager” (William Morrow, 1983), co-authored by Spencer Johnson. His latest, “Customer Mania! It’s Never Too Late to Build a Customer-Focused Company” (Free Press, 2004), is a study of Yum! Brands Inc., parent of Pizza Hut, KFC, Taco Bell and other chains. Yum! Chairman, President and CEO David Novak invited Blanchard to evaluate the company’s efforts to create a people-first culture.

Q. You write that you accepted David Novak’s offer of access because he is trying to implement the kind of customer-centric culture that you have advocated for many years. This must have been a very personal project for you.
A. Yes. What got me interested in them was this absurd goal that, with 850,000 employees, they were going to put a Yum! on everybody’s face! And as we gathered the data, I thought, how are we going to analyze this? So the framework of the book is me reflecting on what I have been observing for many years and how [Yum!] summarizes a lot of the work our company has been doing. It’s about questions: Do you have the right target, how are you treating your customers, how are you treating your people and do you have the right leaders? That’s why I’m excited about the project.

Q. Is it frustrating that many companies don’t successfully put your ideas to work?
A. Yes, it is. I think the numbers are improving. I’m working on another book that says the gap in our country between knowing and doing is significantly bigger than the gap between ignorance and knowledge. What’s exciting about Yum! is that in order to pull off [their goal of creating customer focus], the company has to have tenacious leaders who aren’t willing to let it go. And they are that.

Q. Is that what you’ve seen lacking in other companies?
A. Yes. Most are very comfortable at spending all their time looking for the next new management concept and they never follow up on what they’ve just taught their people.

David Novak sent a New Year’s memo to all Yum! managers that said: “You’re probably getting sick and tired of it, but you know what the focus is going to be for 2005? Customer mania, just as it’s been the same for the last three years.” Theirs is a relentless message. It isn’t: “It’s my way or the highway”; it’s: “Here’s our vision.” Yum’s whole success formula is to put people capabilities first, and then customer satisfaction and profits will follow.

Q. Is the tough part migrating that culture from the boardroom to the drive-thru window?
A. Yes, always. The ones who fall short just end up cheering each other on and never get it out [of the home office]. Look at the language at Yum! They call everybody coaches. They call headquarters the restaurant support center. There is a lot of symbolism that has to go along with banging the message because employees are thinking, “Oh, I’ve seen these kind of guys before,” and they’ll wait them out. When you run into folks you can’t wait out, you either have to get on board or get out.

Q. What surprised you most as you examined Yum! and talked to employees at all levels?
A. The big thing was the amount of time managers spent outside their offices coaching. We were looking for self-serving leaders who thought it was all about them, but unless they conned us, we couldn’t find that. What we saw was universal commitment to get out there and help and support, not evaluate, judge or punish.

The other amazing thing about Yum! is how it uses recognition [of individual success]. Coaching and recognition are the main drivers [of its culture]. All managers have to create a special way to recognize people. Novak gives windup walking teeth toys to recognize people who talk the talk and walk the walk.

Q. What are the odds on whether David Novak and Yum! will succeed?
A. I’m optimistic because I know they’re not backing off. They’re realists, these guys. There are two traits you need to run a great organization: patience and persistence. Patience is realizing [success] might not happen on your timetable. When your patience gets tried, persistence has to kick in. And when you get frustrated because you’re working hard and it isn’t coming together, you have to be patient.

If they can pull it off, it’s going to be a wonderful example for the whole industry.