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• Customer Mania A Cultural Revolution at YUM!
• 2005 Sharing Conference    October
  13-14, 2005Atlanta, GeorgiaEmory Conference
  Center
• By Stephen Krempl

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In the Beginning . . .Tricon - Whats Different?
2 Unleash the Power of People 7 Gain
Alignment Every Step of the Way 10 Market
the Change

• Restaurant Focus . . . our only interest
• Restaurant Management . . . people who know and
  love restaurants
• Restaurant Careers . . . continuity versus
  musical chairs
• Restaurant Ownership . . . incentives that reward
  performance
• Restaurant Power of One . . . multi-branding,
  market planning, shared services that leverage
  scale
• Restaurant Cost Structure . . . fewer, better,
  committed people . . . corporate adds value, not
  just cost
• Restaurant Results orientation . . .
  sustainability versus boom splat
• Restaurant Based Culture . . . WalMart field
  focus . . . Mary Kay recognition

8/15/1997
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Our Roadmap
4 Have a Plan
1997
1998
June
September
December
March
June
Strategy

• Our Passion
• Founding Truths

• How We Work Together
• Key Business Strategies

Structure

• Tricon Structure and Staffing
• Company Structure Design and Staffing
• Core Process Identification

Culture

• How We Work Together Principles
• Engage People at All Levels in Understanding
• Cascading Development and Reinforcement

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Our Passion
6 Create a Vision and Personalize it

• Put a YUM on peoples faces around the world . .
  . that special eating experience that makes you
  smile and creates life-long customers
• Food you crave
• Come-back value
• Customer-focused teams
• Our jobs will be the best in the world for people
  who are committed to quality food and satisfying
  customers better than anyone

8/15/1997
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Our Founding Truths
1 Wipe Out Big Companyitis and Not Invented
Here

• People Capability First . . . satisfied customers
  and profitability follow
• Respond to the Voice of the Customer . . . not
  just listen
• The RGM is Our 1 Leader . . . not senior
  management
• Run Each Restaurant Like Its Our Only One . . .
  avoid the trap of the averages
• Recognition Shows You CARE . . . people leave
  when you dont
• Great Operations and Marketing Innovation Drive
  Sales . . . no finger pointing
• Operation Discipline Thru Process and Standards .
  . . consistency - not program of the month
• Franchisees are Vital Assets . . . operate as one
  system, not two
• Quality in Everything We Do . . . especially the
  food

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How We Work Together
9 Make How We Work Together a Big Idea!

Customer Focus
We listen and respond to the voice of the customer
n
Belief in People
n
We believe in people, trust in positive
intentions, encourage ideas from everyone and
actively develop a workforce that is diverse in
style and background

Recognition
n

We find reasons to celebrate the achievements of
others and have fun doing it
Coaching and Support
n

We coach and support each other
We do what we say, we are accountable, we act
like owners
Accountability
n

We take pride in our work and have a passion for
excellence
Excellence
n

Positive Energy
n

We execute with positive energy and intensity . .
. We hate bureaucracy and all the nonsense that
comes with it
We practice team together, team apart
Teamwork
n

Leaders Cast the Shadow and Cascade the Principles
8/15/1997
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Key Business Strategies
6 Create a Vision and Personalize it

• Tricon will significantly outperform the industry
  and be the dominant global restaurant company
• Lead in customer focused innovation and
  operations excellence
• Build international capability to provide
  dramatic and sustainable long-term growth
• Drive availability thru single brand and
  multi-brand unit penetration
• Operate as one system/Capitalize on scale
• Recognize RGM is key to strategy execution and
  restaurant profitability . . . Dynamic culture!
• Generate 2 billion in cash by 2000 and focus to
  deliver consistent earnings growth for all four
  companies

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1997 - 1999

• Achieved a solid foundation . . . but wanted
  more
• Top 10 Companies to Work For
• Top 10 Most Admired Companies
• The Best Restaurant Company in the World!
• What have other companies done to climb to the
  top, to deliver sustainable positive results?

How Do We Build a Dynasty?
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Best Practice Visits/Learnings
1 Wipe Out Big Companyitis and Not Invented
Here

• Stay focused on the right things . . . relentless
  drumbeat
• Measure the behaviors you want
• Hate bureaucracy!
• Respect for each other
• Customer focus
• Strive for excellence

• GE
• WalMart

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Yum! Dynasty
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Best Practice Visits/Learnings
1 Wipe Out Big Companyitis and Not Invented
Here

Home Depot Southwest Airlines

• Customer loyalty . . . whatever it takes
• Ownership culture . . . everyone is an owner
• Recognition, recognition, recognition
• Process around what really matters
• Its ALL about our people!

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Yum! Dynasty
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Best Practice Visits/Learnings
1 Wipe Out Big Companyitis and Not Invented
Here

• Exaggerate the differences
• Process improvement accountabilities
• Raise the performance bar every year
• No excuses mentality - Strong resolve to win

• Target
• Coke

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Yum! Dynasty
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Best Practice Visits/Learnings
1 Wipe Out Big Companyitis and Not Invented
Here

• UPS
• Berkshire Hathaway
• McKinsey Study

• Science around what matters most - delivering
  packages
• The Drivers are 1
• Love the business youre in . . . Or get out of
  it!
• No time for bureaucracy
• We are on the right track
• Distort efforts towards executing

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Yum! Dynasty
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Experts Whove Studied/Done It
1 Wipe Out Big Companyitis and Not Invented
Here

• John Wooden - Basketball Hall of Fame
  Coach Role of the Coach
• - Led UCLA for 10 years - Record 677-161
  (80.5) Focus on detail
• - NCAA championships 10, Next Best 5
• - Consecutive championships 7, Next Best 2
• - Undefeated full seasons 4, Next Best 1
• Jim Collins - Author of Built to Last and Good
  to Great Clock Building
• - Multi-year research projects What makes
  the truly Setting yourself apart
• exceptional companies different from other
• organizations?
• Bob Rotella - Renowned Sports Psychologist Minds
  et of a winner
• - Best selling author Golf is a Game of
  Confidence

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Yum! Dynasty
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The Key Messages For Tricon

• Dynasty Drivers Memo

Took these on-the-road in the Building the
Yum! Dynasty Program
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Yum! Dynasty
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Customer Mania
10 Market the Change Shock the
System 11 Measure and Reward the Right
Things

Feedback from the program was clear . . .
Mania
Customer
Yum! Leadership Requirements
How We Work Together Principles
Process and Discipline

• How We Lead

• Revised

• 4x Cascade

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Yum! Dynasty
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The Yum! Dynasty Model (May, 2002)
Our Founding Truths (August, 1997)
Our Passion (August, 1997)

Taking People With You (1998-2000) Building the
Yum! Dynasty (2000-2002)
Key Business Strategies (August, 1997) Building
the Yum! Dynasty (2000-2002)
How We Work Together (August, 1997)
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Characteristics of aHigh Quality Company
3 Youve Got To Believe
Goldman Sachs list 1. High-quality product or
service and sustainable competitive
advantage 2. Superior management, acts in
shareholders interest 3. Compound EPS growth of
10 to 12 over last 10 years 4. Consistency/Pre
dictability/Quality of reported
earnings 5. Continued 10 earnings growth next
three years 6. Strong balance sheet 7. High
profitability 8. Free cash flow
generator 9. International competitiveness 10. R
easonable purchase price
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We Have Accomplished Much

• HWWT culture around the world
• Customer Mania mindset launched
• One System Leadership
• Made Running Great Restaurants our 1 priority .
  . . Ops. Organization, CHAMPS, BSC
• Differentiated brand positionings and new product
  innovation
• Focused International Growth . . . 1000 new
  restaurants per year
• China emerging as 4th largest profit division
• Multibranding innovation providing customers
  branded restaurant choice
• Expanded our great brand portfolio with AW/LJS
• New Asset Prototypes

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We Still Have A Long Way To Go
5 Tell It Like It Is

• Inconsistent SSS growth around the world
• Operations and customer measures middle tier
• International growth execution
• Multibranding strategy execution