'Changing Culture at Pizza Hut\r'

' changing socialization at pizza pie hutch and Yum! Brands, Inc. The concept of integrated burnish has captured the inclination of executives for years. For executives struggling to manage g overningal potpourri, netherstanding their transcription’s subtlety has become paramount in the first place undertaking such a change. They realize that material strategicalal and structural re confederation smoke non occur if it is non clog by the organization’s norms and nurture. Organization husbandrys atomic exit 18 becomed by leaders and, thitherfore, iodine of the most of the essence(predicate) fails of a leader is the creation, vigilance, and aroundtimes the destruction of a stopping point.\r\nAn organization’s glossiness re? ects the determine, beliefs and attitudes of its members. These value and beliefs foster norms that in? uence employees’ behaviors. organisational destinations evolve imperceptibly over years. Unlike missio n and vision accounts, they atomic number 18 never written d knowledge, provided ar the some adept and only(a) of an organization. Cultures are collections of unspoken rules and traditions and operate 24 hours a day. They determine the bore of organisational life. Cultures determine a lot of what happens within an organization. era managers are aware of their organization’s assimilation(s), they are very much unsure to the highest degree ow to in? uence it. If finales are authorityful in? uenconditioned emotional responses of behaviors, they essential be throwd. one(a) steering to analyze divided up assumptions is by exploring top centering’s answers to the hobby questions: 1. How do people in this organization pass on their lease? 2. Who succeeds in this organization? Who doesn’t? 3. How and when do people interact with one an some early(a)? Who dampicipates? 4. What diversenesss of work styles are valued in this organization? 5. Wha t is evaluate of leaders in this organization? 6. What sights of performance are discussed most in evaluations?\r\nThe purpose of this hold is to function with you how sr. leaders at pizza chantey in particular and at Yum! Brands, Inc. ( pizza pie chantey, Taco gong and KFC) in full c all(prenominal) for answered these questions and were adequate-bodied to create a newly polish after the eaterys were spun off from PepsiCo Inc. Culture change does non occur in a vacuum. It is an constitutive(a) part of the family’s fabric. To change a fraternity’s civilization, pay backs systems, leader behaviors, and organizational designs must be created Ack give awayright guidegments: This research was sponsored by a research grant from the OxyChem Corporation.\r\nThe elemental focus of this article is pizza pie field hut and how pizza pie army hut some(prenominal) generated and experienced the culture change at Yum! It is found, in the beginning, on th e thoughts, re? ections and opinions of senior managers who experienced and helped communicate the changes discussed in this article. The authors would like to ack forthwithledge the constructive comments made by Steve Arneson, Leon Avery, Chris Koski, Mike Rawlings and Don, and Leslie Ritter. 319 to support the change, as the experience of pizza pie hut demonstrates. THE SPIN-OFF AND PIZZA HUT\r\nStarted in 1958 by the Carney br another(prenominal)s, Dan and Frank, Pizza hut played a major role in pass oning pizza from an Italian specialty into a mass- marketplace, mainstream food. Pizza Hut had veri send back a reputation for and lading to fruit quality that was ‘‘reinforced into the bones’’ of eating house managers, and with it, coarse ostentation in the patsy. By the mid 1990s, Pizza Hut had become a top executiveful print, with some 8,000 U. S. -based eating places, 140,000 employees and over $5 billion dollars in system-wide gross sale s. oneness internal Pizza Hut market tec estimated that over 90 pct of American pizza eaters had tried a Pizza Hut pizza.\r\n champion of the key drivers of the success of Pizza Hut was PepsiCo. along with KFC and Taco toll, Pizza Hut was and had long been part of the PepsiCo eating house Division. PepsiCo had brought its national merchandise muscle to the Pizza Hut brand, raising sales and increasing brand visibility. But it had in like manner brought something that had a major bear upon on Pizza Hut: the PepsiCo trouble system. withal before Jack Welch made cosmopolitan galvanising Co. ’s psychenel concern system the begrudge of American industry, PepsiCo had a reputation for producing great commonplace managers.\r\nIts personnel externalisening system, shepherded by a class of organizational psychology Ph. D. consigliore in unmarriedly of PepsiCo’s operating particles, produced a stellar cast of skipper managers. This system, spirit leveled on an existent Pizza Hut founding culture, was far from a natural ? t for the libertine-ser frailty eatery industry. PepsiCo was what Kerr and Slocum would c distri entirelyively(prenominal) a market culture with a performancebased reward system. PepsiCo’s very profuse moving, individually focused, consumerpackaged goods, entrepreneurial culture would prove not a great ? t for the relatively mature, decelerate-moving, squad-oriented, quickser viciousness eatery air. 20 organisational dynamics The integration of these two companies, PepsiCo and Pizza Hut, resembled a failed vinaigrette: a large(p) amount of oil slowly churning in one rention, overlaid by a thin layer of vinegar, a whirlwind of speed moving in the opponent direction. The vinegar represents the high-potential PepsiCo general managers rapidly moving among the m individually divisions and corporate of? ces of PepsiCo. Smart, ambitious, competitive and results-driven, they were attracted by PepsiCoâ⠂¬â„¢s ability to move them up fast and fade them a b stateth of management experience in polar PepsiCo businesses.\r\nA rising star talent spend two years in ? age marketing at Pepsi Cola North America, a year and a half in harvest-time marketing at Frito-Lay, an additional 18 months as a intersection brand manager there, two years at Pepsi Cola International, followed by a senior director position in marketing at Taco toll, etc. The bottom layer, the oil, delineate the bulk of Pizza Hut’s trading operations, staffed by hard functional, dedicated, long-tenured eating house-focused operators who loved the Pizza Hut brand and the restaurant business.\r\nThey were slight credibly to be at the top of their class in college and less seeming in fact to hand graduated from college. many an(prenominal) had fixed 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 hire few as except reached the top of operations, where they divided up leadership 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-tiered system of PepsiCo ‘‘short termers’’ and Pizza Hut restaurant-dedicated ‘‘lifers’’ had a number of built-in tensions and misalignments, including:  Home office idealization: employment was generate in the restaurants, but ‘‘the former and the glory,’’ as puff up as the fi age computer programs, all originated in corporate headquarters, whether Pizza Hut’s in Dallas, Texas, Yum! ’s in Louisville, Kentucky or PepsiCo’s in Purchase, mod York. round top management’s line of sight was focused away from the restaurants. short-run wittiness: The ‘†˜up or surface’’ of the PepsiCo overlord management system, a reward system linking short-run results to individual rewards, created pressure to make one’s mark and make it quickly. Anything that took too long to signifier or was built for long-term match was a hard sell.  Lack of continuity: The need for quick success and the relatively rapid turnover in headquarters management made for a ‘‘program of the month’’ mentality.  Finance first head stage: ‘‘Making plan’’ seemed sacrosanct in PepsiCo’s results-driven organization.\r\nThis was often comprehend by the ‘‘restaurateurs,’’ and even by some franchisees, to be at the cost of shipment to long-term restaurant essentials like product and asset quality.  Passive defense in the field: The perception of short-term focus combined with a ‘‘program of the month’’ mentality engendered, at its wo rst, a system of passive resistor in field operationsâ€compliance with let on cargo. heavens operators, especially franchisees, often felt secure in the fuckledge that if they just delayed program murder long generous, Pizza Hut management would turn over and the new group would charge out with the ‘‘next great idea. ’ A performance-based, consumer packaged goods bon ton like PepsiCo was not a natural ? t with the restaurant business. But whether it was bad business ? t, strategic or culture misalignment, or but overleap of tolerance for the restaurants business’ relatively low margins and slow fixth (despite its spacious cash ? ow), PepsiCo gave up on Pizza Hut and its restaurants, spinning off its replete(p) restaurant division in 1997, under the make water Tricon Global Restaurants, Inc. , now Yum! Brands. ALIGNING BUSINESS/ horticulture Yum! anagement understood that they had to create a radically antithetic culture than the one at Pep siCo if the new smart set was to succeed. PepsiCo is primarily a consumer packaged goods company. Direct interaction with consumers takes place by advertising, or is mediated by supermarkets and other retail and wholesale establishments. merchandising 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 front-line mployees interacted with millions of customers a week in some 30,000 restaurants around the world. Quality control was not in the hands of affect manufacturing gurus as at Pepsi Cola or Frito-Lay, but in those of part-time, often teenage employees make discrete decisions near quality with every(prenominal) product served. This posed an enormously antithetical challenge for top management at Yum! PepsiCo was a holding company. If general managers made their ? nancial numbers and grew their people, therefore hea dquarters people left(p) each general manager alone to run his or her business.\r\nSynergies crosswise various lines of business were simply not a high priority on PepsiCo’s strategic agenda. In the restaurant division, this resulted in triple bulletproof, supreme consumer brands. In effect, the trine restaurant brands were really triple separate companies, with independent cultures, information technology (IT) systems, operations, ? eld management practices, human resource systems, etc. Yum! , saddle 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 triplet independent restaurant businesses.\r\nIt had to look for operating synergies, shared resources, etc. It had to be much more of an operating company. A cutting from tether independent companies to one company with three independent restaurant brands was essential for ? nancial survival. Top manage ment needed to meld 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). Succeeding at Pizza Hut could no longer be about making it to Purchase, New 321 York to work for PepsiCo.\r\nIt had to be about making the customer experience in Pizza Hut restaurants great. David Novak, newly named offense head at Yum! had already started creating a restaurant-focused culture during his stint as professorship of KFC. Novak was lovesome 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 surrounded by his survival and spin-off date, the new restaurant-focused culture was button to postulate to be skip overed.\r\nLaunch date: October 7, 1997. CREATIN G THE CULTURE OF YUM! BRANDS Changing and integrating the culture of three companies with very strong founders, founding 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 impersonate include: 1. Starting with a set of shared values to de? ne a culture crossways the three brands; 2.\r\n origination the new company in a way that that body forth its new culture; 3. employ agnomens to signal intentions and signify new ethnical meanings; 4. Creating a instruct management system to maximize restaurant performance; 5. Developing a acknowledgement culture to reinforce cultural behaviors; 6. Realigning reward systems to validate and ‘‘ bye the talk’’ on the values; and 7. Measuring the lastingness and commitment o f senior managers to the values. Starting with Shared value The political philosopher, Hannah Arendt, trying to distinguish what was unique and 322 ORGANIZATIONAL kinetics uccessful about the American Revolution (vs. those of France, and Russia, for example), focused on the concept of founding†two as a source of authority and as a statement of the power and commitment that comes from being a founder. The founding that was America’s Revolution was encoded in two straightforward written documents: The Declaration of Independence and the Constitution. The creator served to articulate those values that were distinct to America and the latter(prenominal) to codify them into workable systems and processes of government. Whether the leaders of Yum! ad read Arendt is unknown, but they intuitively understood the elements that had made the American experiment uniqueâ€and they incorporated them into the values statement and the sling of the new company. Rather than start w ith just some other statement of corporate values, they declared their differences with the ‘‘ beat country,’’ that is, PepsiCo, with a set of ‘‘Founding Truths. ’’ The nine distinct statements in this one shared document were Yum! ’s ‘‘Declaration of Independence. ’’ They announced what Yum! would stand for, while at the same time differentiating the new company from its progenitor†he PepsiCo Restaurant Division. For example, one statement reads, ‘‘The RGM (Restaurant commonplace Manager) is our #1 Leader . . . not senior management. ’’ other reads, ‘‘Great Operations and Marketing Innovation revolt Sales . . . no ? nger-pointing. ’’ These two statements suggest both the direction Yum! wanted to take and the behaviors it wanted to avoid. taken together, the nine statements clearly 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.\r\nThe statement of shared values, Yum! ’s ‘‘How We convey unneurotic’’ principles, doesn’t differentiate Yum! from its competitors. Values statements rarely can serve this role, and Yum! ’s restaurant-focused, but otherwise streamer values for certain can’t: customer focus, belief in people, cognition, motor train job and support, accountability, excellence, controlling energy, aggroupworkâ€who could be against these? Instead, as we’ll demonstrate, they served more to structure processes and systems and stand as a code for measurable behavior. In other words, they served the role of the U. S. Constitution.\r\nAnd, like the Constitution, while the inside information of the document weren’t easy to remember, their impact was ubiquitous. The Founding The la unch of a large, new universe, U. S. -based company, whether from spin-off, merger or acquisition, regularly follows a rather standard process. You ring the chess opening bell of the New York Stock Exchange, throw a man-sized launch progeny at corporate headquarters, presumably beamed live to division headquarters and by videotape to international locations, blare the news across the corporation’s internal media and push your beaver foot forward in the press.\r\nIn this regard, the launch of Yum! followed the same format: Wall Street, a big event in Louisville, Kentucky, featuring the new Yum! vigilance group and the restaurant brand presidents, moderated by then ‘‘ serious 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 in concert Principles,’’ with its pr inciples 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 anesthetic activities the midst of the action instead of the headquarters event; by centering activities on restaurant managers, and by signing up those managers as ‘‘founders. ’’ The local events were focused primarily on enlisting local restaurant general managers in the new company. Activities centered on team-building exercises for the managers knowing by Yum! ’s organizational and leadership emergence team. These were simple, 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 area Pizza Hut, KFC and Taco cost managers had ever met together in one place. thither 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 computer storage histories created new connections. After two hours of team-building activities, the message 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 reinforced the local event rather than the other way around.\r\nThe invitation to and attendance primarily by restaurant managers told them they were important. This was reinforced by the national event which distressed the primary role of the RGM and introduced the ‘‘Founding Truths,’’ and it was graphically embodied in the new Yum! transmission line certi? cate, which featured one real manager from Pizza Hut, Taco doorbell and KFC on its front. The most powerful part of each local event was saved for the end. Each neighborhood had been supplied with a large pecker featuring the new companies ‘‘Founding Truths. ’’ The poster was put outside the event conflict room, along with a set of magic markers.\r\nThe managers were invited, on their way out, to sign their names on the poster and to become a ‘‘founder,’’ but only if they concur 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 company’s ‘‘Declaration of Independence,’’ and in doing so, make a public commitment to the culture and the company. Over 80 percent of the attending RGMs left their signatures. ‘‘ interrupt’s day’’ as it is now called, has become a annually event celebrating the culture of Yum!\r\nTitles Given the symbolic immenseness of titles, Yum! was smart enough to actively use title changes to signal culture changes. ‘‘Corporate Headquarters’’ was re-n amed 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 ‘‘tribal promontory concept officers,’’ signifying that there was now only one company with three concepts, not three companies. The inbuilt 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 coaching job was a company valueâ€it was quite another to construct an entire management system based on coachingâ€to embed that value in the way the company worked. That was to be perhaps the biggest cultu re change of all. coaching The idea that coaching could be something that all associates in a company could rescue to improve their performance, right mastered to the front lines, and that every manager had the capacity to coach may quiet down appear radical, or at least improbable.\r\nPizza Hut itself wasn’t even sure it could be make 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. PepsiCo’s 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 free burning team performance in a restaurant.\r\nFor example, under PepsiCo, management had been by exception. As Pizza Hut chief operating officer (COO) A ylwin Lewis put it before a national conference on coaching and mentoring, ‘‘If you’re a good performer, you get left alone; if you’re a poor performer, you get an action plan. ’’ In other words, acquire the kind of management perplexity embodied in rough-and-ready coaching and train to build 324 ORGANIZATIONAL DYNAMICS managerial competencies was seen as a sign of failure. The short-term focus of PepsiCo’s management system had meant that resort things quickly was a strength.\r\nBut short-term fixes became impaired for building longterm capabilities done coaching. Finally, the focus on individual instead of team performance made it unwieldy to coach. Coaching ultimately has to be about the team and the person to be coached. It can’t be about the personal success story of the coach. Coaching supported the restaurantfocused culture in a number of ways. First, it inevitable physical proximity. It’s best done face-to -face. Coaching can’t be done very effectively from another state. That meant above-restaurant management would harbour to start spending time in the restaurants.\r\nSecond, 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 you’d be atrophy 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 fusion. The coach can’t be roaring and bewilder the player fail. Market coaches, area coaches and restaurant managers were networking, mirroring the teamwork required in the restaurants.\r\nCOACHING MAY BE THE RIGHT WAY TO GOâ€BUT HOW DO YOU GET THERE? The first 90 eld: Before anything else had been done, job titles were changed. every last(predicate) operations vice presidents, directors and area managers became ‘‘coaches. ’’ That was the ‘‘changeable moment’’ that signaled to employees that a new mode of operating was inevitable. There was ‘‘boot pack’’ for the entire operations team. The fastest way to figure that all managers could master and understand the skills of the average employee was to work out 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 wasn’t working occurred to Aylwin Lewis during a roundtable with area coach es in Columbus, Ohio. 1 of the area coaches looked at him and said, ‘‘You’ve changed our titles and you’ve given us genteelness 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 wasn’t immediately apparent that a model of coaching was needed. Coaching was a skill that had to be taught. People needed a model for how to coach. In PepsiCo, coaching wasn’t rewarded and therefore not practiced. A coaching culture model needed to be developed at Yum! It had to be practical, simple and action-orientedâ€it had to ? t the fast paced, high-turnover environment of the restaurant business.\r\nA manipulable threestep process, with an easy to learn acronym, EAR, was developed: taught all market coaches, while the market coaches bypassed all a rea coaches and in person 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.\r\nThird, 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, increasing 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 d emonstrations. Creating a coaching culture had begun. realization\r\nTop managers learned from Southwest Airlines Co. the power of recognition to motivate employees, and to elicit positive discretional behavior among employees. Southwest Airlines separates reward from recognition, celebrating behaviors that reinforce the culture, creating an elaborate, yet spontaneous process of positive behavioral feedback. actualisation 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.\r\nThere were three keys to building a thriving 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? marooned or pattern? Root cause? Responding educate 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 in person\r\nStarting at the top: David Novak, now chairman of Yum! , formerly president of Pizza Hut (and of KFC) single-handed 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. Novak’s ? rst spoil into recognition as president of a division occurred at KFC, where he created the ‘‘? oppy chicken’’ set apart. The award itself embodied the distinction between recognition and reward.\r\nIt was one of those elastic ? oppy chickens used for pranks or jokes that would be as like ly to attest up on Halloween as at any other time. In other words, it wasn’t valuable in and of itselfâ€it wasn’t a watch, or a ring, fancy clock, tie tack, brooch, earrings, etc. trinity things made it valuable as recognition. First, it was numbered. So it wasn’t just a ? oppy chicken. It was the #45 ? oppy chicken. Second, it was signed and had a personal 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: ‘‘We know you can’t eat the chicken. ’’ At Pizza Hut, Novak started the ‘‘Big Cheese’’ awardâ€a 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 vi ce 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 500 ‘‘Big Cheese’’ awards.\r\nThe prevalent 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’’ meeting. The power of the award is in the public recognition. The author’s $100 gift certi? cate remains unspent. 326 ORGANIZATIONAL DYNAMICS To create a recognition culture, rather than simply a recognition award, things couldn’t stop and start with Novak. He encouraged his immediate reports to create their own recognition awards, and they soon did.\r\nWhat followed was a slow process of osmosis, reinforced by the positive impact of recognition. For example, the chief operating o f? 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 general 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.\r\nBut within three years, recognition awards were regularly appearing in restaurants, as managers used recognition to motivate front-line employees. And because the spread was spontaneousâ€never dictated by ‘‘corporate’’â€and in all voluntary, there was a nose out 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, fro nt and center. any public meeting included recognition awards on the agenda.\r\nOver time, the continuity of recognition starting generating a sense of anticipation and ‘‘pull’’ for awards. Within three years, recognition had become so routine and ubiquitous 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. Two changes to the reward system helped align it with the ‘‘Founding Truths’’ and ‘‘How We Work Together Principles’’ on which the new culture was based.\r\nFirst, 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 c oaches, but the scorecard was ? exible enough to allow for measuring the results of good coachingâ€such as reduced turnoverâ€within a year. Second, in a move unprecedented in the industry, restaurant managers were given stock options as an now block grant, and stock options were added to the list of performance incentives.\r\n lawfully 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 faithfulness 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 as 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 Hut’s business makes it very difficult to make causal links between the change in culture and changes in its business. For one thing, the main antigenic 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 care-laden with a huge debt and was in the process of marketing off its company-owned restaurants. This undoubtedly mpacted morale, potentially slowing the impact of culture change, and it may have skewed the same- introduce sales averages of the remaining restaurants, obfuscating the impact of culture. These points notwithstanding, during the ? rst quartette years of its culture change, Pizza Hut experienced record highs in same-store sales and a record low in restaurant manager turnover. In the ? ve years, from mid-1997 to mid-2002â€when Pizza Hut was led by president Mike Rawlings, a time at the heart of the change in cultureâ€same-store sa les growth rose 19 percent, overall operating pro? doubled and margins modify to record highs. While these results may not have been caused directly by the change in culture, they were certainly consonant with it. ‘‘Founder’s 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.\r\nIn a hologram, any fragment encapsulates the essence of the whole. Interpretations of a single management practice need to be consistent with the interlingual rendition of other 327 Measurement ‘‘What gets measured, gets done,’’ is one of the oldest maxims of business. But when you’re trying to change a culture and exploitation values to do it, what do you measure about the culture? Yum! answered this question in two ways. First, it created the ‘‘Founder’s Survey,’’ an annual company-wide survey 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 broken down by function and by levels, providing a picture on how different parts of the company perceived the company’s 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.\r\nIndividuals were held accountable for how they lived the values. When the chief management practices. Top managers at Yum! had the capacity to envision and enact a culture that inspired intense loyalty, strong commitment, change magnitude productivity, and even greater pro? tability. To achieve consistency at Yum! and differentiate Yum! from PepsiCo, Yum! ’s top managers developed practices that were consistent with its culture. heathenish anthropologists for decades have studied the behaviors of members of many tribes.\r\nWhile each tribe might idolization different ‘‘gods,’’ the behaviors of tribe members can be describe using four concepts, all starting with the letter ‘‘T’’: Totems are things that are worshipped or prized; taboos are practices used to control or retaliate 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 tutor new members into the culture of the tribe. We summarize the differences in these four T’s between PepsiCo and Yum! n tabulate 1. Corporations have spent considerable amounts of money in response to advisers’ seductive promises of easy cultural change. about managers have sought to replicate the strong cultures of happy 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 organization’s life. How decisions are made, how careers are dining table 1 Yum! Brands YUM! VERSUS PEPSICO: COMPARISON OF CULTURAL ARCHETYPESa\r\nTOTEMS Focus of attention: TABOOS Results without values ‘‘Quick hits’’ TRADITIONS Recognition TRANSITIONS Pizza ‘‘ credentials’’ and other ‘‘boot camps’’ for making products Becoming a ‘‘founder’’ Restaurants Team players Operations/marketing pa rtnership Focus on people Effective operations Division interdependence Retail mentality pecuniary results Values without results Individual stars Lack of upward mobility Marketing is king Long-term projects without short-term results Not making a plan Coaching Restaurant General Manager is #1 Values driven long suit PepsiCo\r\nPeople career Quarterly financial plan results review Move up or out Cross-functional rotations to build general managers Strong brand mentality Making a plan Division independence Wholesale/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 constantly reinforced in systems, processes and leadership communications over its existence. 28 ORGANIZATIONAL DYNAMICS managed, how rewards ar e allocatedâ€each small incident serves to convey some aspect of the organization’s culture. The founders of Yum! did not want to create a culture that perpetuated their own values and sense of immortality and stayed away from quick ? xes. What is the soul of Yum!? First, forget the numbers. inside competition ends up making people less committed, creative, and caring. In the restaurant business, the lack of these three C’s leads to poor customer service, which ultimately affects store pro? tability.\r\nSecond, people need appreciation. Big cheeses and other tokens of appreciation for talented high performers are an integral part of maintaining a strong culture. 329 SELECTED BIBLIOGRAPHY For selected works 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, organisationa l Culture and Leadership, 2nd ed. (Jossey-Bass, 1992); Jackie Freiberg and Kevin Freiberg, NUTS!\r\nSouthwest Airlines’ spook Recipe for Business and Personal Success (New York: Bard, 1966); throng Higgins and Craig McAllaster, ‘‘Want Innovation? Then Use Cultural Artifacts that Support It,’’ organisational Dynamics, 2002, 31, 74â€84; Jeff Kerr and outhouse Slocum, ‘‘Managing Corporate Cultures through Reward Systems,’’ honorary society of Management executive, 1987, 1, 99â€108; and Jennifer Chatman and Karen Jehn, ‘‘Assessing the Relationship Between Industry Characteristics and Organizational Culture: How Different Can They Be? ’ Academy of Management ledger, 1994, 37, 522â€553. 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 he lped communicate his way through three presidents, one spin-off, one major restructuring, a downsizing, and a major culture shift. He has also worked closely during his career with the chairmen of Digital Equipment Corporation and Bell Atlantic.\r\nMike’s educational background includes two master’s 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 School of Business at Southern Methodist University (SMU). John W. Slocum junior holds the O. Paul Corley professorship in management at the Cox School of Business, Southern Methodist University.\r\nHe serves as the co-director for SMU’s Corporate Director’s 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 dowery 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\r\n'