As founding chairman and former CEO of Tricon (Novak took over the post in January), Pearson feels that he has arrived at a personal inflection point that has universal significance -- although he can't pin down any particular moment when the change occurred. He has learned some of his new leadership skills by watching Novak inspire the company with warmth, energy, and charisma. Yet the roots of his change go deeper.
Pearson has had several different careers. He spent 14 years as president and chief operating officer at PepsiCo, learning the business of soft drinks, snack foods, and restaurants. Before joining PepsiCo, he was a senior director at McKinsey & Co., the global consulting firm, where he rose from associate to senior director and was in charge of the firm's marketing practice.
After PepsiCo, he taught at Harvard Business School, where he wrote many articles for the Harvard Business Review, such as "Muscle-Build the Organization" and "Tough-Minded Ways to Get Innovative" -- aggressively Pearson-esque articles that summarized the elements of his macho leadership style. He joined the leveraged-buyout firm Clayton Dubilier & Rice in 1993, then joined Tricon at Novak's insistence. "I told him it would be really meaningful if he would join me at Tricon," Novak recalls. "He could call himself anything, do anything."
At Tricon, Novak has established a culture that elevates the common worker in a way that brings out the emotional drive and commitment that is at the heart of good work. As a result, Pearson has seen employees weep with gratitude in reaction to nothing more than a few simple words of praise. Where before he might have dismissed that kind of display as sentimentality, he now recognizes emotion for what it is: the secret to a company's competitive edge.
It's a new way of thinking, as much as a new way of feeling. When Pearson came to Tricon, he absorbed what he saw in Novak's style -- and realized it was more than a style. It was a method. Almost overnight, Pearson saw how the human heart drives a company's success -- one person at a time -- and how this kind of success can't be imposed from the top but must be kindled through attention, awareness, recognition, and reward.
The logic was clear: If the need for recognition and approval is a fundamental human drive, then the willingness to give it is not a sign of weakness. It's a lesson that has changed Pearson's own definition of leadership. "Great leaders find a balance between getting results and how they get them," he says. "A lot of people make the mistake of thinking that getting results is all there is to the job. They go after results without building a team or without building an organization that has the capacity to change. Your real job is to get results and to do it in a way that makes your organization a great place to work -- a place where people enjoy coming to work, instead of just taking orders and hitting this month's numbers."
Not that there's anything wrong with hitting -- or exceeding -- your numbers. Under the leadership of Pearson and Novak, Tricon has increased its store-level margins from 11% to 15%, boosted operating profit by 32%, and cut its debt in half, to $2.5 billion. Tricon's leaders credit those numbers directly to their new culture of employee recognition. All of this has made Tricon a $22 billion retail operation with more than 30,000 restaurants and 725,000 employees worldwide. (It opens a new restaurant somewhere around the world every 10 hours.) Spun off of PepsiCo in 1997, Tricon's brands have worked their way into the fiber of people's lives. In China, there is a life-size statue of Colonel Sanders outside almost every KFC, and families there actually have to reserve their Thanksgiving bucket of chicken. (KFC imported the American holiday as a marketing ploy.)
When Novak invited Pearson to join the team, Pearson agreed, with one stipulation: "You are going to run this company. You will answer to me, but everyone else will answer to you."
"We'll do this together," Novak replied. "We can learn from each other."
When Pearson showed up at Tricon's corporate offices in Louisville, Kentucky (also the headquarters of KFC), the staff had a little surprise waiting for him. When he drove up, he saw hundreds of employees cheering. There was even a band playing to celebrate his arrival.
"All the time I was at Pepsi, nothing remotely like this had ever happened," Pearson says. "It was overwhelming. I knew something was going on that was fundamentally very powerful. If we could learn how to harness that spirit with something systematic, then we would have something unique."
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