Andy Pearson Finds Love

High above Tennessee, the leaders of Tricon Global Restaurants Inc., the largest restaurant chain in the world, are having a casual but strategic conference in one of their corporate jets. Andy Pearson may be sitting in front -- but you'd never know he is one of the two men who run this company. Like all of the others, he wears a golf shirt that bears the logos of their three restaurants: KFC, Pizza Hut, and Taco Bell. He comments lightheartedly on the ideas that the others are advancing about partnering with another food chain -- multibranding in their restaurants for variety. Maybe they'll put a Baskin-Robbins inside Taco Bell. At 30,000 feet, all ideas are good: Pearson isn't about to bring anyone down to earth from up here.

And that in itself is a huge change in Pearson's leadership style. This is the new Andy Pearson, a man who, now in his mid-70s, has transformed himself into a new kind of boss. The old Andy Pearson ran PepsiCo Inc. for nearly 15 years, driving revenues from $1 billion to $8 billion. Back then, he was known for his skills at bringing people down to earth, from any altitude. His chief weapons at the time were fear, surprise, and a fanatical devotion to the numbers. In 1980, Fortune named him one of the 10 toughest bosses in the United States. Pearson was singled out for the relentless demands that he put on his people. As one employee put it, Pearson's talents were often "brutally abrasive."

He was an effective CEO: His style worked. Pearson raised the bar for even the most outstanding performers. Nothing was ever quite good enough for him -- even in situations where results were better than projected. One PepsiCo manager, for example, agreed to increase the volume of his unit's business by 12% that year. Instead, he racked up a 15% gain -- and came to his performance review expecting at least a smile from his boss. Instead, Pearson pointed out that the market had grown even faster than this manager's operation and suggested that his performance had better improve.

Twenty years later, Pearson is still proud of having been included in the Fortune article. And he's still unapologetically tough. Over the years, he earned a reputation for his relentless, Socratic, two-word interrogation in meetings: "So what?" Every year, without hesitation, he fired the least productive 10% to 20% of his workforce -- and he still thinks it's a good idea to let go of a certain layer of the company's lowest performers. But now he's learned to demand high standards in a different way. "There's a human yearning for a certain amount of toughness," Pearson says. "But it can't be unmitigated toughness."

These days, Pearson is focused on a different, more positive emotional agenda: "You say to yourself, If I could only unleash the power of everybody in the organization, instead of just a few people, what could we accomplish? We'd be a much better company."

You can see this new attitude in the way that he speaks and listens, even up here, at this altitude, in a cushioned swivel chair. Pearson presides over this brainstorming session, tossing pithy cautionary asides into the air. He points his words with barbs of humor to make them stick. Tricon's chairman and CEO, David Novak, is the official leader of this group, this meeting, and this company. Yet Pearson's wisdom holds everyone in thrall. At the age of 76, he's been doing this sort of thing twice as long as anyone else on the jet. Everyone listens, over the drone of the turbines, when Pearson speaks. Even Novak listens, often leading the company by following Pearson's line of thought. Pearson just offers up what he knows and lets it sink in.

Someone suggests opening an all-night restaurant. Pearson doesn't think it would work, but he doesn't say so, at least not directly. He finds some nugget of intelligence in the idea and offers what he sees as "the challenge." "For Kinko's, being open all night is a big thing," he says. "But you would have to preempt the category. You can't share it." The suggestion is, if people want to tackle the challenge, he won't stop them. But they've been warned.

Pearson guides -- but he doesn't control. He used to make a living running companies. Now he governs. The shift is more radical than it may sound.