The taste of success: YUM!

by 27 May 2008

With 32,000 employees in Australia and New Zealand alone, YUM! Restaurants is the worlds largest restaurant company. Sarah OCarroll speaks to YUM!s Amanda Fleming and Albert Baladi about the HR strategies that set them apart from the rest

Customer Mania

YUM! approaches business “the YUM! way, not the dumb way”.

“The dumb way” means operating without a compelling vision, in a fragmented manner with corresponding mixed results: “The Yum! Way”means creating an aligned organisation that is focused on customers and is an energising place for employees to work.

With 35,000 restaurants in more than 110 countries YUM! is the world’s largest restaurant company and includes KFC and Pizza Hut outlets. In 2007 they opened about three new restaurants each day of the year – making them one of the fastest-growing retailers in the world. In Australia and New Zealand alone they employ 32,000 people.

The ongoing question of how to attract and retain generation Y couldn’t be more pertinent for YUM! because 80 per cent of their staff are between the ages of 15 and18 and most in their first job.

To get these employees to subscribe to the “Customer Mania” philosophy takes innovative and ongoing people strategies. Customer Mania is the strategy YUM! developed to create a unique people-oriented, employee-recognition, performance-driven, customer-first culture.

“Customer Mania is a philosophy rather than a program,” said Amanda Fleming, chief people officer. “When you’re talking about team members for many of whom it’s their first job, it’s about positioning their jobs or their roles in our restaurants as the first customer experience. So we always say our customer experience will never exceed that of our team members,” she said.

This has been done through a variety of training systems to enable the employees who are the face of the brand to deliver the best customer experience. However the Customer Mania approach does not only apply to restaurant employees: when hiring executives, they look for customer maniacs too.

“We have to be customer maniacs to our restaurants. So our systems, our tools, have to ensure that our restaurant teams can deliver the customer mania that we expect them to,” says Fleming.

Around the world, more than 1,000,000 employees are striving each and every day to put a “Yum! on customers' faces”, says Albert Baladi, managing director of YUM!, and one of the most effective people schemes in place is their CHAMPS program.

CHAMPS is focused on developing staff with a “yes” attitude. It is centered on the executional basics that deliver great customer service –CHAMPS stands for cleanliness, hospitality, accuracy, maintenance, product quality and speed. The focus is to execute CHAMPS with passion, urgency and excellence, so that sales growth is driven in every restaurant.

“What CHAMPS does is it looks at all the touch points. When you enter a restaurant you want it to be clean, you want to have a hospitable experience where somebody smiles, greets you politely, etc,” he says.

“So each one of those letters stands for what we believe are the important touch points in the restaurant. We have a lot of programs focused on delivering training but also ensuring that the experience of the customer is the best it can be across all these points,” says Baladi.

Constant measuring has been key to ensuring the CHAMPS program is not just a buzzword and is actually being rolled out successfully.

“Going back to the importance of the measures of success, our CHAMPS scoring program is done by mystery shoppers. If you look at the scores, they have been improving year on year which is obviously a reflection of the training and the ability of the training to be sustainable” says Baladi.

A signature recognition culture

Baladi and Fleming say that to build a workforce of CHAMPS dedicated to achieving the company vision, the most important system for YUM! has been their recognition culture, strategies and programs. Fleming believes their unique and vigorous recognition program has put them ahead of the competition.

“If I was to say that there’s one part of our culture that sets us aside from other organisations, it is our recognition culture. Right through our organisation, whether it is from our frontline team members right through to Albert’s role, the CEO, we take every opportunity to recognise staff,” she says.

“So whether it be hourly, daily, yearly with big award nights – even to the extent that every single one of our executive team has their own personal recognition award. So that when [our management team] are out in restaurants they’re looking for opportunities to recognise our restaurants’ management teams and area coaches in delivering our Customer Mania or our CHAMP philosophy in our restaurants.”

Baladi says that what sets YUM! apart is how prevalent the recognition culture is and how it permeates across the organisation all the way to restaurants.

“When we see someone doing something great, we recognise him or her on the spot. It’s like the battle field promotion so much used in the military. It’s a core pillar of the company’s culture and one that truly sets YUM! apart from other companies,” Baladi says.

“In truth, everyone likes to be ‘loved’ and recognised, no matter the cultural background, the age or the level,” he says.

“It’s a combination of formal and informal that permeates the culture and it comes all the way from the CEO of the company David Novak, who, through his own drive, made this a signature culture at the inception of YUM! ten years ago – a culture which lives on today more than ever.”

Delivery boy to director

YUM! has some of the best people metrics in terms of team turnover in Australia. Compared with some of their key competitors, they have turnover of about 20 per cent less than industry average. With an astounding figure of 99 per cent internal promotion, there are rigorous systems in place to ensure identification of talent deep within the organisation.

There are then appropriate strategies in place to allow team members to move up into management positions in the restaurants and then to what is called “above restaurant management” and executive positions.

“One of the unique things about YUM! is that we have people who have started as Pizza Hut delivery drivers and are now directors of our business,” says Fleming. “That’s a pretty common story across YUM! globally.”

“There’s no doubt in our mind that if your people metrics are either hitting target or above target it contributes to sales results and, clearly, profitability.”

However one of the key challenges YUM! face is managing, motivating and attracting generation Y and retaining them to realise a future in the organisation.

Making the fast food industry an attractive place to work is a big challenge. “The key challenge is the perception of the fast food industry and changing that to a place that you can develop and have a very successful career,” says Fleming.

“One way in which we dealt with this was we invested a lot in what we’re calling our e-people strategy. One part of that is to modernise the face of KFC and Pizza Hut in recruitment,” says Fleming.

“So what we’ve done is modernised all our recruitment point-of-sale materials in our restaurants, we’ve developed websites, we’ve put all our recruitment processes online which is speaking to generation Y. This has been phenomenally successful.”

Referrals have been another important strategy of their recruitment process. About 45 per cent of applications have come through existing employee referrals.

“This is great because our team members are suggesting to their friends to come and join KFC or Pizza Hut because it’s a great culture and great place to work. If it turns out they can work in the same restaurant that would be fantastic. So they extend their social network to their work environment,” says Fleming.

Keeping it green

YUM! recognises that corporate social responsibility is something that’s very important as a magnet for talent and that culture is now highly embedded in the overall strategy.

“We have a very active environment programs –we’re starting to recycle,” Baladi explains. “We’ve taken the Newcastle area to where we’re now recycling 90 per cent of our waste [and] that goes into compost.

“We’re in the process of consolidating the learnings and will be rolling it out to the rest of the country. It’s a big deal because we do generate a lot of waste that can be turned positively for the environment and for the bottom line,” he says.

Health and wellness is also an area which YUM! has focused on as part of their people strategy. Plans are in place to diversify the menu of KFC and to bringing more balanced options. Also, says Baladi, they have removed some of the blatant negatives from their products.

“So we’ve already moved out of trans fats and we’re now actively working on reducing the levels of saturated fats and salt. By innovating and contemporising our food, we are making our restaurants a better place for people to work,” he says.

YUM! have optimised on new technology to make the work environment for their teams a more comfortable place to work. There has been huge investment in their assets and restaurants to get them a bit more “funky” and comfortable for consumers and employees.

A lot of processes that were manual in the past are now being automated. Baladi strongly believes that the restaurant general manager is their number-one employee and that making their work life better and easier is a key strategy.

“We have rolled out several IT solutions and operation solutions to the back-of-house help employees and managers do their job more effectively.

“Everything we come up with in terms of innovation – [we’re] not talking menu innovation for the customer, but fundamentally for the business – is always geared to making sure that we simplify and improve and rationalise the life of our restaurants’teams,” he says.

“These technology solutions not only make it easier on our team, but they ensure the high quality of product at the same time. It’s a total win-win.”

This also removed a lot of the manual administration work that teams used to do in the restaurants, says Fleming. “If we reduce that administration cycle it allows our restaurant managers and team members to focus on the customer.”

Fleming says YUM! doesn’t just look at themselves as an employer: “We’re very proud of the life skills that we teach a whole generation of young Australians that come through organisations such as ours.

“We’re teaching a whole generation of people the importance of customer service by way of example: about the importance of coming to work on time and not letting your teammates down by not showing up to work, about handling cash, teamwork, cleaning,” she says.

“By having every team member focused on delivering outstanding Customer Mania brings such a positive work environment that leads to a level of engagement and pride in our business.”

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