Yum! Brands CEO David Novak Extols the Power of Recognition

In fact, when Novak was recognized as Chief Executive’s CEO of the Year in 2012, it was in no small part due to his uncanny ability to identify and nurture talent. Now Novak, who stepped into an executive chairman role last year, is embarking on a new venture, one dedicated to spreading the word about the power of personal recognition.

In 2016, Novak launched OGO (O Great One!) Enterprises, which he describes as the “world’s first recognition brand,” dedicated to “getting people everywhere to recognize each other for being great people and for the great things they do every day.”

As part of that mission, Novak recently published O Great One! A Little Story About the Awesome Power of Recognition, a parable that chronicles the journey of Jeff Johnson, a new CEO whose family-owned toy company has fallen on hard times. Struggling to get the business back on track, the CEO protagonist encounters surly factory workers and a dispirited management team.

“The best thing you can do is to create a culture where everybody in the company recognizes each other for good performance. It spreads like wildfire.”

O Great One—which was what Novak’s grandkids called him when he said granddad, grandpa, poppy or the usual names would make him feel old—is meant to address what he sees as a global recognition deficit. “I’ve learned that everywhere I go around the world people crave recognition,” he says. “Sixty percent of employees say that recognition in work matters more than money. So, my question to the world is: Why isn’t recognition used more often?”

The following are excerpts from a recent interview with David Novak on his newest venture.

Why don’t more leaders practice recognition?
There are two big reasons. One is that, unfortunately, bosses think their employees won’t work as hard if they tell them they did a good job. So, in other words, they’re concerned that if you tell somebody they did a great job, people will take the pedal off the metal. It will relieve the pressure of performance, which is crazy because, 40 percent of people say they’d put more energy into work if they were to get recognized. So, it’s a fallacious assumption.

The second reason is that leaders often think if they recognize someone, others will feel left out. What I find is that if you recognize people, it creates a contagious energy that makes other people want to get recognized. The best thing you can do is to create a culture where everybody in the company recognizes each other for good performance. It spreads like wildfire.

Unfortunately, too many leaders run their businesses around the one-tenth of 1% who aren’t going to work that hard or take advantage of the system versus the 99% of the people who go to work every day wanting to do a good job.

Is there any set of circumstances in which recognition simply doesn’t work?
Recognition, by itself, isn’t going to be effective, but recognition that is earned is very effective. You can’t go around and just tell people they’re doing a good job if they’re not doing a good job. Then, people look at it as more of going through the motions versus driving the kind of behaviors that drive performance.

The key in business and in life is to give people earned recognition. Once you do something that drives performance or once you exhibit a behavior that’s going to drive performance in your company, recognition is then earned. We always try to recognize the good things that will drive performance of the company or in your family or wherever you might be trying to influence people in a positive way, but it’s just as important to recognize the bad behavior. So, if people are not performing, you have to give them proper coaching and hope that they turn it around. If they don’t, have them go somewhere else to work.

Even Yum! Brands experienced performance difficulties in its China business in recent years. Some may argue that superior recognition practices couldn’t overcome those sorts of problems.

Recognition creates a culture that allows you to overcome problems faster. Nothing works by itself. The work environment you create [generates] the kind of performance orientation that you want to have. I always felt it was more important to recognize people in the down times than when everything was going along swimmingly well. Because that says that you’re consistent in your behavior and that the good [actions] that you’re looking for in the company are going to get you out of the ditch.

There’s no company that runs on autopilot forever. You’re always going to have your ups and downs. Even when we grew our earnings per share 13 percent a year for well over a decade—13 years—we still had ups and downs. We had to deal with different adversities, but we never lost the philosophy that drove our culture. A work environment that is driven by recognition helps you recover a lot faster than you would otherwise.

Recognition creates a culture that allows you to overcome problems faster. Nothing works by itself. The work environment you create [generates] the kind of performance orientation that you want to have.

Are there some forms of recognition that are better than others?
The best forms of recognition are ones that are personal, from the heart. You recognize people in a way that is unique to you and what you’re trying to reinforce. I always tried to reinforce behaviors that drove what we called “customer mania,” listening and responding to the voices of the customers. I always personalized each award with a clear articulation of what that person did to deserve the recognition. And I tried to make it fun because I think, in business, you don’t want to take yourself too seriously. You want to take your business seriously, but don’t take yourself too seriously.

Has your successor, Greg Creed, taken up the recognition torch?
He wouldn’t have gotten the job if he weren’t a believer. In fact, nobody in our company gets promoted without being a big believer in the kind of work environment [existing] in the firm.

Which other CEOs are good at recognition?
Every great leader I’ve ever met is good at it. Jamie Dimon [CEO, JPMorgan Chase] is great at earned recognition. If somebody has really done something great, he goes out of his way to tell people that this is the kind of behavior that [they’re] looking for at JPMorgan Chase. Southwest Airlines’ Gary Kelly is different from Herb Kelleher, but he’s been able to keep that culture moving in the right direction. Brian Cornell at Target is a big proponent of recognition. He visits stores and sits down with team members and makes them feel special in his own unique way.

When people adhere to your culture, it has an amazing effect. People who don’t adhere to it almost get rejected like a bad juror. It’s a great way to protect the values you are building. A good example is Ken Langone, the co-founder of Home Depot. If you did something well, he sits down and writes a hand-written personal note that makes you feel like a million dollars. These guys all have very different styles; but in their own way, they have their own [method] of being personal when it’s appropriate and giving people earned recognition that they need. At the same time, if you don’t have the behaviors that they’re looking for, they’ll manage you out or have you go make somebody miserable at some other company.

Is there a particular message you want CEOs to take away from the O Great One book?
The book makes it clear that a leader casts a shadow. People will do what the leader does. So, there’s no way you will have a culture of recognition unless the leader recognizes earned performance. The biggest lesson for CEOs is that they have to cast the right shadow.

Obviously, not all leaders are doing this well. If you’ve got 82% of employees saying that their supervisor doesn’t recognize what they do, there’s a big problem. Some people may think they’re doing a good job, but they’re not. Even in our company, we do a culture survey every year. We score very high on recognition, but people still wanted more recognition. We are one of the best-in-class companies at recognition, but even our employees wanted more of it.