It has been more than a year and a half since Yum! Brands embarked on the largest strategic initiative undertaken by the company in its twenty-year history: spinning off its successful China business into a separate public company and returning $6.2 billion to shareholders.
During that time, Yum! also launched a multiyear transformation plan to become what chief transformation and people officer Tracy Skeans calls a more focused, more franchised, and more efficient company that has improved profitability, reduced volatility, and accelerated growth of its KFC, Pizza Hut, and Taco Bell brands worldwide. With more than 44,000 restaurants in more than 135 countries, the initiative includes the goals of being at least 98 percent franchised by the end of 2018 and reducing general and administration costs to 1.7 percent of system sales. It also includes achieving a run-rate capital expenditure of $100 million by the end of 2019.
As Yum! Brands executes the plan, Skeans is playing a key role in helping to lead the company’s business transformation and people strategies to build powerful brands and fuel sustainable results.
“Undergoing an enterprise-wide transformation is never easy,” Skeans says. “In the beginning, we had to figure out how to work differently across functions and reinvest in certain things while making reductions in some areas. We’ve realigned our global organization around a renewed focus and an evolved vision.”
Skeans is helping to oversee the journey toward a new Yum!, which she says is centered around four key growth drivers that now govern every decision and action the company takes: distinctive, relevant, and easy brands; unmatched franchise operating capability; bold restaurant development; and unrivaled culture and talent.
Skeans explains that the company’s transformation includes accelerating growth and building on the success of its brands through product innovation, digital initiatives, partnering with exceptional franchisees, giving franchisees the tools to succeed, and growing the company’s culture and talent to strengthen the customer experience and overall performance.
“We believe that the more we can focus our organization on the things that will ultimately drive growth for our brands, the more it will pay off for our employees, franchisees, and shareholders,” she says.
As chief transformation and people officer, some of her responsibilities include leading the global strategy around sharing and adopting best practices within Yum! and converting them into repeatable models that will drive same-store-sales growth for its markets around the world. “We’re making a lot of progress developing repeatable models of best practices on everything from restaurant operations to marketing that we’re cascading across our system and sharing with franchisees to help increase innovation and efficiency,” Skeans says.
While these are the company’s growth drivers, they’re also consistent with Yum!’s core values. Yum!’s brands are customer-facing, and the company itself works closely with its franchisees. As such, Skeans emphasizes that a heart for the business is as important as a mind for it. Interwoven with each of the growth drivers is Yum!’s desire to develop talent, foster relationships, and provide a quality customer experience.
“There’s not a single value at our company that I wouldn’t teach my children,” she says. “They’re the types of values that encourage people to deliver results, stay focused, recognize people’s wins, and make the world better.”
Heart matters in a business that’s so centered around people, as does courage and ambition. “At Yum!, we believe that our leaders must be smart with heart and have the courage to make the big decisions that will drive our business forward,” she says. “Successful leaders in our company lead with their hearts first, but they’re also courageous enough to take risks and not fearful of running too fast.”
These traits are wrapped up in Skeans’s own leadership style, which she describes as embodying both “grit and grace.” For her, grit represents perseverance and tenacity, and grace relates to kindness and patience. “That combo for me has always been important,” Skeans says. “You have to work really hard, and you have to be good to people while you do it. A lot of potential can be unlocked this way.”
And potential becomes easier to unlock in a workplace that knows how to balance hard work with an open heart. That’s why Skeans has such a passion for cultivating the right workplace culture at Yum!—one that ensures every employee can take pride in the fact that their piece of the puzzle really matters as they work with the team toward common goals.
“In our opinion, it’s important that you structure an organization very deliberately so that everyone understands how they fit in,” she says. “It’s not just about understanding your job, but it’s also about knowing how your job impacts your ability to push and influence our growth drivers.”
Skeans describes herself as a champion of Yum!’s culture, emphasizing that Yum!’s culture is one she feels needs to be constantly curated as the business evolves.
“Our people and our unique culture remain our biggest competitive advantage,” she says. “I want to fiercely protect it, and I feel a huge responsibility to ensure that I personally cast the right shadow.”
That’s why Skeans has been teaching a training program to employees and franchisees worldwide with Yum! Brands’ CEO Greg Creed called Leading Culture to Fuel Results. The training centers around the idea that, by using culture as a foundation for establishing strategy and structure, the company creates an atmosphere for successful results.
“Financial performance is not enough,” Skeans says. “Leading Culture to Fuel Results is about inspiring employees and franchisees around the world to innovate, to work dynamically, and to be forward-thinking. A company’s culture should be something people can talk about. Our values are something they can describe, that they can live by. That kind of culture enables people to be able to fuel the business.”
By continually reminding employees of their value to the organization, Yum! has helped ease the jitters that tend to accompany any major transformation within a company. “It was really the first significant set of changes that we’ve had in many years,” Skeans says. “But we’re seeing people be very engaged on every step of the journey so far.”
As Yum! transforms into a more growth-focused brand builder and global franchisor, Skeans wants to ensure that the environment she’s been working to cultivate only continues to blossom.
“You can have all the quantitative results, and that’s a win,” Skeans says. “But if you can add a culture that has been growing and is felt by everyone on top of that, then that to me is a bigger win.”
Photo: Beau Bumpas