Changing Culture at Pizza Hut

Changing assimilation at pizza pie hut and Yum Brands, Inc. The concept of corporate subtlety has captured the imagination of executives for long judgment of conviction. For executives struggling to manage goernmental mixed bag, understanding their organizations socialisation has make paramount onwards undertaking such a win over. They realize that point outificant strategic and geomorphologic realignment can non hail if it is not supported by the organizations norms and set. prexyial term polishs be urinated by leadinghip and, in that respectfore, atomic number 53 of the most important functions of a leader is the creation, focal point, and some speckles the destruction of a burnish.An organizations gardening re? ects the values, beliefs and attitudes of its members. These values and beliefs foster norms that in? uence employees behaviors. organisational conclusions evolve unnoticeably over age. Unlike mission and vision argumentations, they ar neve r scripted spate, but be the soul of an organization. Cultures are collections of unspoken rules and traditions and operate 24 hours a day. They determine the quality of organizational life. Cultures determine much of what happens at heart an organization. eon managers are aware of their organizations culture(s), they are oftentimes unsure astir(predicate) ow to in? uence it. If cultures are provideful in? uencers of behaviors, they moldiness be relieve oneselfd. one(a) way to analyze shared assumptions is by explo spring coronate counselings answers to the following questions 1. How do stack in this organization accomplish their work? 2. Who succeeds in this organization? Who doesnt? 3. How and when do great deal interact with iodin some other? Who participates? 4. What kinds of work styles are valued in this organization? 5. What is expected of leaders in this organization? 6. What aspects of surgical operation are discussed most in evaluations?The purpose of this article is to share with you how senior leaders at pizza shanty in particular and at Yum Brands, Inc. (pizza Hut, wetback ships bell and KFC) in ordinary answered these questions and were able to give a raw culture after the eating houses were spun off from PepsiCo Inc. Culture assortment does not occur in a vacuum. It is an integral part of the comp whatevers fabric. To change a companys culture, advantages ashess, leader behaviors, and organizational de signals must be created Acknowledgments This research was sponsored by a research grant from the OxyChem Corporation.The primary commission of this article is pizza Hut and how pizza Hut both generated and experient the culture change at Yum It is establish, earlier, on the thoughts, re? ections and opinions of senior managers who undergo and helped communicate the changes discussed in this article. The generators would like to ac fellowship the constructive comments do by Steve Arneson, Leon A precise, Chris Koski, Mike Rawlings and Don, and Leslie Ritter. 319 to support the change, as the experience of pizza Hut demonstrates. THE turn out AND PIZZA HUTStarted in 1958 by the Carney brothers, Dan and Frank, Pizza Hut compete a study agency in turning pizza from an Italian specialty into a mass-market, mainstream food. Pizza Hut had developed a story for and loyalty to product quality that was build into the bones of eating place managers, and with it, not bad(p) pride in the brand. By the mid 1990s, Pizza Hut had become a powerful brand, with some 8,000 U. S. -based eating houses, 140,000 employees and over $5 billion dollars in system-wide sales. One internal Pizza Hut market researcher estimated that over 90 percent of the Statesn pizza eaters had tried a Pizza Hut pizza.One of the key drivers of the success of Pizza Hut was PepsiCo. along with KFC and wetback Bell, Pizza Hut was and had long been part of the PepsiCo restaurant Division. PepsiCo had brought its issue marketing muscle to the Pizza Hut brand, raising sales and change magnitude brand visibility. scarce it had also brought some intimacy that had a major impact on Pizza Hut the PepsiCo circumspection system. Even before Jack Welch make world(a) Electric Co. s personnel oversight system the admire of American industry, PepsiCo had a re put togetheration for producing great ecumenical managers.Its personnel be after system, shepherded by a set of organizational psychology Ph. D. consigliore in sever entirelyy of PepsiCos direct surgical incisions, produced a stellar cast of professional managers. This system, shapeed on an existent Pizza Hut inst in exclusivelyation culture, was far from a natural ? t for the quick-service eating house industry. PepsiCo was what Kerr and Slocum would call a market culture with a performancebased advantage system. PepsiCos very fast moving, individually foc utilise, consumerpackaged goods, entrepreneurial culture would prove not a great ? t for t he comparatively mature, slow-moving, group-oriented, quickservice restaurant vexation. 20 ORGANIZATIONAL dynamics The integration of these twain companies, PepsiCo and Pizza Hut, resembled a failed vinaigrette a large amount of oil easily churning in one direction, overlaid by a thin layer of vinegar, a whirlwind of speed moving in the opposite direction. The vinegar repre moves the high-potential PepsiCo customary managers rapidly moving among the many divisions and corporate of? ces of PepsiCo. Smart, ambitious, competitive and results-driven, they were attracted by PepsiCos ability to move them up fast and give them a breadth of management experience in diverse PepsiCo line of reasoninges.A move star might spend two years in ? old age marketing at Pepsi Cola North America, a year and a half in product marketing at Frito-Lay, an additional 18 months as a product brand manager on that point, two years at Pepsi Cola International, followed by a senior director set in m arketing at Taco Bell, etc. The bottom layer, the oil, be the bulk of Pizza Huts trading operations, staffed by hard working, dedicated, long-tenured restaurant-focused operators who love the Pizza Hut brand and the restaurant art.They were less likely to be at the blanket of their class in college and less likely in fact to have graduated from college. Many had started as cooks, or dishwashers or delivery drivers. Slowly, as they had mastered the complexity of running retail operations and built their experience, they would move up the system. A select few compensate r to each oneed the overtake of operations, where they shared leaders positions with PepsiCo general managers, some of whom had non-operational functional backgrounds (in ? nance, say, or even marketing,) and who were doing their ops rotation. This two- railroad tiered system of PepsiCo short termers and Pizza Hut restaurant-dedicated lifers had a tote up of built-in tensions and misalignments, including Home office glorification Business was through in the restaurants, but the power and the glory, as intumesce as the field programs, all originated in corporate furnish, whether Pizza Huts in Dallas, Texas, Yum s in Louisville, Kentucky or PepsiCos in Purchase, New York. tallness managements line of sight was focused away from the restaurants. Short-term mind-set The up or out of the PepsiCo professional management system, a reward system linking short-term results to individual rewards, created pressure to make ones mark and make it quickly. Anything that took too long to build or was built for long-term impact was a hard sell. Lack of continuity The necessity for quick success and the relatively rapid turnover in headquarters management made for a program of the month mentality. Finance initiatory headset Making plan receivemed sacrosanct in PepsiCos results-driven organization.This was often sensed by the restaurateurs, and even by some franchisees, to be at the cost of co mmittedness to long-term restaurant essentials like product and asset quality. hitherto resistance in the field The perception of short-term focus have with a program of the month mentality engendered, at its worst, a system of passive resistance in field operationscompliance without commitment. subject plain operators, especially franchisees, often felt secure in the knowledge that if they good delayed program implementation long enough, Pizza Hut management would turn over and the untried aggroup would charge out with the close great idea. A performance-based, consumer packaged goods company like PepsiCo was not a natural ? t with the restaurant business enterprise. merely whether it was bad business ? t, strategic or culture misalignment, or simply leave out of tolerance for the restaurants business relatively low brims and slow process (despite its huge cash ? ow), PepsiCo gave up on Pizza Hut and its restaurants, spinning off its entire restaurant division in 19 97, under the name Tricon Global Restaurants, Inc. , now Yum Brands. aline BUSINESS/ CULTURE Yum anagement dumb that they had to create a radically different culture than the one at PepsiCo if the modernistic company was to succeed. PepsiCo is primarily a consumer packaged goods company. Direct interaction with consumers takes place through advertising, or is intercede by supermarkets and other retail and wholesale establishments. Marketing was king, and at the time of the spin-off, one of the kings of marketing, Roger Enrico, was the CEO. Tricon Global Restaurants, Inc. was a restaurant company. Hundreds of thousands of low-pay, high turnover antecedent-line mployees interacted with millions of guests a week in some 30,000 restaurants round the world. Quality control was not in the hands of process manufacturing gurus as at Pepsi Cola or Frito-Lay, but in those of part-time, often teenage employees making discrete decisions most quality with every product served. This posed an hugely different contend for top management at Yum PepsiCo was a holding company. If general managers made their ? nancial numbers and grew their people, then headquarters people odd(p) each general manager alone to run his or her business.Synergies crosswise various lines of business were simply not a high priority on PepsiCos strategic agenda. In the restaurant division, this resulted in tercet strong, independent consumer brands. In effect, the troika restaurant brands were really three separate companies, with independent cultures, knowledge technology (IT) systems, operations, ? eld management practices, human resource systems, etc. Yum , attach with a large debt by PepsiCo and in the relatively lower margin restaurant business, was in no position to economically justify itself as a holding company overseeing three independent restaurant businesses.It had to tactual sensation for operating synergies, shared resources, etc. It had to be much more of an operating comp any. A shift from three independent companies to one company with three independent restaurant brands was require for ? nancial survival. Top management needed to fade three independent company cultures into one shared culture and one set of restaurant-focused values, built on a set of shared functions (e. g. , IT, bene? ts and compensation, legal). succeed at Pizza Hut could no longer be roughly(predicate) making it to Purchase, New 321 York to work for PepsiCo.It had to be about making the customer experience in Pizza Hut restaurants great. David Novak, hotly named vice prexy at Yum had already started creating a restaurant-focused culture during his stint as president of KFC. Novak was fond of saying that he hated the term culture because it reminded him of germs. But his savvy understanding of how to build a restaurantfocused business culture was one of the reasons why he had been selected to run Yum With little time among his picking and spin-off date, the new restauran t-focused culture was going to have to be jump-started. plunk date October 7, 1997. CREATING THE CULTURE OF YUM BRANDS Changing and integrating the culture of three companies with very strong affords, presentation traditions and underlying assumptions about what constitutes success would be an enormous challenge, even after the homogenizing effects of PepsiCo culture were factored in. The actions that Yum took to push its culture toward a desired end-state alignment with its business strategy and business model include 1. Starting with a set of shared values to de? ne a culture across the three brands 2.Founding the new company in a way that that bodied its new culture 3. Using titles to sign of the zodiac intentions and signify new ethnic meanings 4. Creating a train management system to maximize restaurant performance 5. Developing a information culture to reinforce ethnic behaviors 6. Realigning reward systems to validate and walk the talk on the values and 7. Measuring t he effectiveness and commitment of senior managers to the values. Starting with divided Values The political philosopher, Hannah Arendt, trying to distinguish what was unique and 322 ORGANIZATIONAL DYNAMICS uccessful about the American Revolution (vs. those of France, and Russia, for example), focused on the concept of founding both as a source of authority and as a line of reasoning of the power and commitment that comes from organism a founder. The founding that was Americas Revolution was encoded in two distinct inscriptions The declaration of emancipation and the Constitution. The former served to articulate those values that were distinct to America and the latter to codify them into workable systems and processes of government. Whether the leaders of Yum ad read Arendt is unkn possess, but they intuitively understood the elements that had made the American experiment uniqueand they incorporated them into the values statement and the launch of the new company. Rather than start with yet another statement of corporate values, they declared their differences with the mother country, that is, PepsiCo, with a set of Founding Truths. The ennead distinct statements in this one shared account were Yum s Declaration of Independence. They announced what Yum would stand for, mend at the same time differentiating the new company from its progenitor he PepsiCo Restaurant Division. For example, one statement reads, The RGM (Restaurant General Manager) is our 1 Leader . . . not senior management. Another reads, Great trading operations and Marketing Innovation Drive Sales . . . no ? nger-pointing. These two statements enkindle both the direction Yum wanted to take and the behaviors it wanted to avoid. Taken together, the niner statements efflorescely demarcate both the essentials of a genuinely restaurant-focused company and the differences between what employees could expect from Yum and what the restaurants and their operators had resented in PepsiCo.T he statement of shared values, Yum s How We lap unneurotic principles, doesnt differentiate Yum from its competitors. Values statements rarely can serve this role, and Yum s restaurant-focused, but otherwise standard values certainly cant customer focus, belief in people, reference, coach job and support, answerability, excellence, absolute energy, teamworkwho could be against these? Instead, as well demonstrate, they served more to structure processes and systems and stand as a code for mensurable behavior. In other words, they served the role of the U. S. Constitution.And, like the Constitution, while the expatiate of the document werent easy to remember, their impact was ubiquitous. The Founding The launch of a large, new cosmos, U. S. -based company, whether from spin-off, merger or acquisition, usually follows a rather standard process. You ring the opening bell of the New York Stock Exchange, throw a adult launch event at corporate headquarters, presumably beamed live to division headquarters and by videotape to international locations, blare the news across the corporations internal media and push your best foot earlier in the press.In this regard, the launch of Yum followed the same formatting Wall Street, a big event in Louisville, Kentucky, featuring the new Yum Management team and the restaurant brand presidents, moderated by then Good Morning, America co-host Joan Lunden and beamed around the country. But if the launch was going to embody the culture, as enunciated in the Founding Truths and the How We Work Together Principles, with its principles of putting restaurants and their managers first, it was necessary to turn the usual launch format on its head. Yum id this in three ways by making topical anaesthetic anesthetic anesthetic activities the center of the action instead of the headquarters event by elasticity activities on restaurant managers, and by signing up those managers as founders. The local events were focused primarily o n en add uping local restaurant general managers in the new company. Activities centered on team-building exercises for the managers designed by Yum s organizational and leadership development team. These were round-eyed, but often powerful group activities. For example, the local event that one of the authors facilitated for some 200 participants in Miami, Florida, epresented the ? rst time that scene of action Pizza Hut, KFC and Taco Bell managers had ever met together in one place. There were managers who ran restaurants of different brands, often adjacent to each other, who had never met The simple act of sharing personal biographies and livestock histories created new connections. aft(prenominal) two hours of team-building activities, the capacity that we were now one company, not three, and that we were part of a team together came across loud and clear. The national event fortify the local event rather than the other way around.The invitation to and attendance primarily by restaurant managers told them they were important. This was reinforced by the national event which upset the primary role of the RGM and introduced the Founding Truths, and it was graphically embodied in the new Yum entrepot certi? cate, which featured one real manager from Pizza Hut, Taco Bell and KFC on its front. The most powerful part of each local event was saved for the end. Each locality had been supplied with a large placard featuring the new companies Founding Truths. The poster was put outside the event merging room, along with a set of magic markers.The managers were invited, on their way out, to sign their names on the poster and to become a founder, but only(prenominal) if they agreed with the principles of the new company. They were told that no top managers would be there to watch, and that there would be no penalty for not signing. It was strictly voluntary. They were, in effect, invited to sign the companys Declaration of Independence, and in doing so, mak e a humankind commitment to the culture and the company. everyplace 80 percent of the attending RGMs left their signatures. Founders Day as it is now called, has become a yearly event celebrating the culture of YumTitles Given the emblematic importance of titles, Yum was cleverness enough to actively use title changes to signal culture changes. corporeal Headquarters was re-named 323 the Restaurant Support Center, signifying that the restaurants were the central focus of the company. Presidents of the KFC, Taco Bell and Pizza Hut were, at least initially, re-named fountainhead concept officers, signifying that there was now only one company with three concepts, not three companies. The entire above-restaurant management team also had their titles changed from managers to coaches. Area managers were now area coaches, operations directors were market coaches and division vice presidents became head coaches. It was one thing to state that instruct was a company valueit was qui te another to construct an entire management system based on coachingto embed that value in the way the company worked. That was to be peradventure the biggest culture change of all. Coaching The idea that coaching could be something that all subsumes in a company could have to improve their performance, proper(ip) down to the front lines, and that every manager had the capacity to coach may still appear radical, or at least improbable.Pizza Hut itself wasnt even sure it could be done when it started the process. There were two incentives to create a coaching culture in operations first, business growth had stalled and the company needed a jump-start and second, the PepsiCo management system was incongruent with the quick-service restaurant business. PepsiCos focus on individual, instead of team success, its short-term mentality and the intensely financial results driven culture had its strengths and its shortcomings. It was not a culture that could lead to sustained team perform ance in a restaurant.For example, under PepsiCo, management had been by exception. As Pizza Hut chief operating officer (COO) Aylwin Lewis put it before a national multitude on coaching and mentoring, If youre a good performer, you get left alone if youre a poor performer, you get an action plan. In other words, getting the kind of management attention embodied in effective coaching and training to build 324 ORGANIZATIONAL DYNAMICS managerial competencies was seen as a sign of failure. The short-term focus of PepsiCos management system had meant that fixing things quickly was a strength.But short-term fixes became impaired for building longterm capabilities through coaching. Finally, the focus on individual instead of team performance made it difficult to coach. Coaching ultimately has to be about the team and the person to be coached. It cant be about the personal success story of the coach. Coaching supported the restaurantfocused culture in a number of ways. First, it required physical proximity. Its best done face-to-face. Coaching cant be done very effectively from another state. That meant above-restaurant management would have to start spending time in the restaurants.Second, it required interpersonal and operational, as well as ? nancial competence. To coach a restaurant manager, you had to know the business at least as well as they did and know how to share that knowledge, or youd be use their time. Shifting the basis of control to knowledge from command of resources and rewards would force general managers to become restaurant coaches. Third, it required partnership. The coach cant be successful and have the player fail. Market coaches, area coaches and restaurant managers were networking, mirroring the teamwork required in the restaurants.COACHING MAY BE THE RIGHT WAY TO GOBUT HOW DO YOU GET THERE? The first 90 years Before anything else had been done, job titles were changed. wholly operations vice presidents, directors and area managers be came coaches. That was the changeful moment that signaled to employees that a new mode of operating was inevitable. There was iron heel camp for the entire operations team. The fastest way to ensure that all managers could master and understand the skills of the average employee was to bring them together, make them re-learn the basics of the business of making pizza and then test them o their competence was certified. While this was going on, the organizational development team was developing job maps and outlining roles, responsibilities, outcomes, and behaviors for the role of coach. With title, certi? cation and job map, the coaching culture was launched. And barely stayed a? oat. The epiphany on what wasnt working occurred to Aylwin Lewis during a roundtable with area coaches in Columbus, Ohio. One of the area coaches looked at him and said, Youve changed our titles and youve given us training and said, Now, I want you to be in restaurants 80 percent of the time. Okay, now what do you want us to do there? What do we do with all that time? Without any existing precedents for building a new management system based on coaching, it wasnt immediately apparent that a model of coaching was needed. Coaching was a skill that had to be taught. battalion needed a model for how to coach. In PepsiCo, coaching wasnt rewarded and therefore not practiced. A coaching culture model needed to be developed at Yum It had to be practical, simple and action-orientedit had to ? t the fast paced, high-turnover environment of the restaurant business.A watchable threestep process, with an easy to learn acronym, EAR, was developed taught all market coaches, while the market coaches bypassed all area coaches and personally taught all restaurant managers. This simple method had huge implications for fostering a new culture at Yum. First, it meant that all the coaches had to learn the coaching model well enough to teach it. Second, they had to demonstrate their commitment to it in order to teach it well, and were held accountable for achieving results. It would not have had the same impact if the training department employees had led the classes.Third, it put the one level down coaches (the direct supervisors of the students) on notice for accountability to their immediate subordinates. Fourth, operators were able to bring real-life examples into the role-plays, change magnitude the relevance, impact, usefulness and credibility of the coaching material. In addition to training, coaching logs were created in each restaurant to document each coaching session, its lessons and commitments. Audiotapes of coaching sessions were circulated to restaurant managers to provide real-life demonstrations. Creating a coaching culture had begun. cognitionTop managers learned from Southwest Airlines Co. the power of erudition to motivate employees, and to elicit positive discretionary behavior among employees. Southwest Airlines separates reward from intuition, celebra ting behaviors that reinforce the culture, creating an elaborate, yet spontaneous process of positive behavioral feedback. scholarship is done by everyone, not just senior managers. This means that all levels of supervisors can recognize behavior, empowering those supervisors, but also ensuring that the recognition is timely, specific and meaningful to the person who receives it.There were three keys to building a successful recognition program at Pizza Hut 1. Starting at the top 2. Ensuring it was continuous and ongoing, and got built into communications and 3. Reinforcing it publicly. 325 Exploring Observe/ask/listen Analyzing Facts? disjointed or pattern? Root cause? Responding Teach new skills and knowledge Provide feedback Offer support and gain commitment Operational leaders (not training personnel) would be responsible for teaching all coaching classes for those two levels down from them. For example, COO Aylwin Lewis bypassed head coaches and personallyStarting at the top David Novak, now chairman of Yum , formerly president of Pizza Hut (and of KFC) single-handedly brought recognition to Pizza Hut. He said that he had learned the power of recognition during his job as chief operating of? cer at one of the PepsiCo divisions. His deep-seated belief in the power of recognition and his commitment to it made all the difference. Novaks ? rst foray into recognition as president of a division occurred at KFC, where he created the ? oppy chicken award. The award itself embodied the distinction between recognition and reward.It was one of those rubbery ? oppy chickens used for pranks or jokes that would be as likely to raise up on Halloween as at any other time. In other words, it wasnt invaluable in and of itselfit wasnt a watch, or a ring, fancy clock, tie tack, brooch, earrings, etc. Three things made it valuable as recognition. First, it was numbered. So it wasnt just a ? oppy chicken. It was the 45 ? oppy chicken. Second, it was signed and had a perso nal message written on it. And third, a picture of the recipient and Novak was taken, framed and sent to the recipient. A $100 gift certi? ate was also given, but Novak was clear to point out that this was simply an add-on We know you cant eat the chicken. At Pizza Hut, Novak started the outsized Cheese awarda rubber cheese hat (similar to those worn by fans of the Green bay Packers football team. ) This was also numbered, and personally inscribed. The recipient had to wear it while being photographed with the president. When Novak became vice chairman of Yum at the spin-off, his successor as president of Pizza Hut, Mike Rawlings, continued the tradition. During his ? ve-year tenure, Rawlings handed out over five hundred Big Cheese awards.The frequent tears, positive emotions and heartfelt gratefulness of the recipients were reinforcing for culture and for the giver. One author personally experienced the impact of getting the award in front of 600 employees at an All-Team meetin g. The power of the award is in the public recognition. The authors $100 gift certi? cate remains un washed-out. 326 ORGANIZATIONAL DYNAMICS To create a recognition culture, rather than simply a recognition award, things couldnt stop and start with Novak. He encouraged his immediate reports to create their own recognition awards, and they soon did.What followed was a slow process of osmosis, reinforced by the positive impact of recognition. For example, the chief operating of? cer created a recognition award and gave it out at all operations meetings. The positive feedback and public recognition that accompanied it built pride and goodwill amongst recipients and reinforced their positive behavior. The obvious and widespread positive feedback gave a reason for head coaches to create their own recognition awards for their meetings, and so on down the line right into the restaurants. Like osmosis, the spread of recognition was uneven and sometimes slow.But at heart three years, recogn ition awards were regularly appearing in restaurants, as managers used recognition to motivate front-line employees. And because the spread was spontaneousnever dictated by corporateand completely voluntary, there was a sense of ownership for the behavior. Recognition built deep roots. Those roots had the time to grow because once the recognition tradition started, the continuous, ongoing commitment of senior leaders kept it alive, front and center. Every public meeting included recognition awards on the agenda.Over time, the continuity of recognition starting generating a sense of anticipation and braid for awards. Within three years, recognition had become so routine and omnipresent that it lost any tinge of self-awareness and simply became the way we do things around here. Rewards The balanced scorecard was the primary mechanism for allocating rewards and handing out bonuses for restaurant managers. both changes to the reward system helped align it with the Founding Truths an d How We Work Together Principles on which the new culture was based.First, people measurements were added to ? nancial measurements and customer measurements, reinforcing the putting people ? rst credo. It might have taken three years before all restaurant managers had been trained as coaches, but the scorecard was ? exible enough to allow for touchstone the results of good coachingsuch as reduced turnover inwardly a year. Second, in a move unprecedented in the industry, restaurant managers were given stock options as an outright block grant, and stock options were added to the list of performance incentives.Legally limited initially in the number of stock options it could award, Yum chose to award its restaurant managers these options before their bosses, the area coaches, were able to get theirs. This powerfully reinforced the founding truth that the RGM was 1, and should act like an owner of the business. The symbolic value and the boost to management credibility was at least a s important as the value of the options themselves. ?nancial of? cer of Yum was let go, and his lack of cultural ? was cited as a reason, this sent a powerful signal that the cultural values of the company were important. RESULTS The nature of Pizza Huts business makes it very difficult to make causal links between the change in culture and changes in its business. For one thing, the main determinant of Pizza Hut sales is new product launches, somewhat orthogonal to culture as a sales determinant. For another, as a result of the spin-off, Yum had been loaded down with a huge debt and was in the process of selling off its company-owned restaurants. This undoubtedly mpacted morale, potentially slowing the impact of culture change, and it may have reorient the same-store sales averages of the remaining restaurants, obfuscating the impact of culture. These points notwithstanding, during the ? rst cardinal years of its culture change, Pizza Hut experienced genius highs in same-stor e sales and a interpret low in restaurant manager turnover. In the ? ve years, from mid-1997 to mid-2002when Pizza Hut was led by president Mike Rawlings, a time at the heart of the change in culturesame-store sales growth rise 19 percent, overall operating pro? doubled and margins improved to record highs. While these results may not have been caused directly by the change in culture, they were certainly consonant with it. Founders Survey results show strong belief in company leadership, commitment to and belief in the brand, and strong execution of the values at all levels. At the least, the changes in culture provided a strong foundation for and enablement of high performance. The management practices at PepsiCo and Yum had a signi? cant impact on the cultures created in each organization.In a hologram, any fragment encapsulates the essence of the whole. Interpretations of a single management practice need to be ordered with the interpretation of other 327 touchstone What gets measured, gets done, is one of the oldest maxims of business. But when youre trying to change a culture and using values to do it, what do you measure about the culture? Yum answered this question in two ways. First, it created the Founders Survey, an annual company-wide canvas that measured the company on its adherence to the How We Work Together Principles. All employees, except restaurant managers, were invited to participate, with participation rates in the mid-80 percentages. Results could be small down by function and by levels, providing a picture on how different parts of the company perceived the companys commitment to the culture. Managers were then required to come up with action plans for those areas where results were less than satisfactory. Second, Yum created values-focused, 360-degree performance reviews, which were eventually pushed to the restaurant manager level.Individuals were held accountable for how they lived the values. When the chief management practice s. Top managers at Yum had the capacity to envision and enact a culture that animate intense loyalty, strong commitment, increased productivity, and even greater pro? tability. To fall upon consistency at Yum and differentiate Yum from PepsiCo, Yum s top managers developed practices that were consistent with its culture. Cultural anthropologists for decades have studied the behaviors of members of numerous populations.While each sept might worship different gods, the behaviors of tribe members can be set forth using four concepts, all starting with the letter T Totems are things that are worshipped or prized taboos are practices used to control or punish deviant behaviors or those not sanctioned by the tribe traditions are practices that have been passed down through generations to preserve the status quo, and transitions (or rites of passages) are practices that serve to indoctrinate new members into the culture of the tribe. We summarize the differences in these four Ts betwe en PepsiCo and Yum n Table 1. Corporations have spent considerable amounts of money in response to consultants seductive promises of easy cultural change. Some managers have sought to replicate the strong cultures of successful companies, while others have tried to engineer commitment to a culture, in the hopes of increasing loyalty, productivity, and/or pro? tability. Unfortunately, culture is rooted in the countless details of an organizations life. How decisions are made, how careers are TABLE 1 Yum Brands YUM VERSUS PEPSICO equation OF CULTURAL ARCHETYPESaTOTEMS Focus of attention TABOOS Results without values Quick hits TRADITIONS Recognition TRANSITIONS Pizza certification and other boot camps for making products Becoming a founder Restaurants Team players Operations/marketing partnership Focus on people Effective operations Division interdependence Retail mentality financial results Values without results Individual stars Lack of upward mobility Marketing is king semiperman ent projects without short-term results Not making a plan Coaching Restaurant General Manager is 1 Values driven Specialization PepsiCoPeople career Quarterly financial planning results review Move up or out Cross-functional rotations to build general managers Strong brand mentality Making a plan Division independence Wholesale/statistical distribution mentality a This table is not meant to be a de? nitive anthropological statement. Rather, it represents perceptions of the differences between Yum and PepsiCo corporate cultures. Note as well, that Yum traditions tend to be founding behaviors and values created at its spin-off and continuously reinforced in systems, processes and leadership communications over its existence. 28 ORGANIZATIONAL DYNAMICS managed, how rewards are allocatedeach small incident serves to convey some aspect of the organizations culture. The founders of Yum did not want to create a culture that perpetuated their own values and sense of immortality and stayed a way from quick ? xes. What is the soul of Yum? First, forget the numbers. Internal contestation ends up making people less committed, creative, and caring. In the restaurant business, the lack of these three Cs leads to poor customer service, which ultimately affects store pro? tability.Second, people need appreciation. Big cheeses and other tokens of appreciation for intellectual high performers are an integral part of maintaining a strong culture. 329 SELECTED BIBLIOGRAPHY For selected workings on corporate culture and its impact on organizational performance, see Harrison Trice and Janice Beyer, The Cultures of Work Organizations (Prentice-Hall, 1993) Joanne Martin, Cultures in Organizations (Oxford University Press, 1992) Edgar Schein, Organizational Culture and Leadership, 2nd ed. (Jossey-Bass, 1992) Jackie Freiberg and Kevin Freiberg, buggySouthwest Airlines Crazy Recipe for Business and Personal Success (New York Bard, 1966) crowd together Higgins and Craig McAllaster, W ant Innovation? Then Use Cultural Artifacts that Support It, Organizational Dynamics, 2002, 31, 7484 Jeff Kerr and John Slocum, Managing Corporate Cultures through Reward Systems, academy of Management Executive, 1987, 1, 99108 and Jennifer Chatman and Karen Jehn, Assessing the Relationship Between Industry Characteristics and Organizational Culture How Different Can They Be? Academy of Management Journal, 1994, 37, 522553. Barry Mike is vice-president, internal communications, for the investment management ? rm T. Rowe Price. He previously spent seven years as director, internal communications at Pizza Hut. During his tenure there, he helped communicate his way through three presidents, one spin-off, one major restructuring, a downsizing, and a major culture shift. He has also worked almost during his career with the chairmen of Digital Equipment Corporation and Bell Atlantic.Mikes educational background includes two masters degrees as well as completion of his course work for a Ph. D. in Sociology from the University of Pennsylvania. In may 2001, he received his M. B. A. with honors from the Executive M. B. A. program at the Cox discipline of Business at gray Methodist University (SMU). John W. Slocum Jr. holds the O. capital of Minnesota Corley professorship in management at the Cox School of Business, Southern Methodist University.He serves as the co-director for SMUs Corporate Directors Institute and is chairperson for the management and organizations department at the Cox School. He is the author of more than 24 books, over 130 articles, and has worked as a consultant in the human resources area for many Fortune 500 companies, including Lockheed Martin, IBM, and Aramark, among others. Currently, he is co-editor of the Journal of World Business, Journal of Leadership and Organizational Studies and associate editor of Organizational Dynamics. 330 ORGANIZATIONAL DYNAMICS