Recognition is the Key to Team Building

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Imagine taking over a company spun-out from a Fortune 500 company, making changes in how people are treated – recognizing everyone for their contributions to success as a key part of team building. The result: a stock price returning 16.5% growth compounded annually (since 1997) compared to S&P’s 3.9%. The company – Yum Brands. The CEO – David Novak.

Geoff Colvin offers a succinct explanation for the success in an August Fortune magazine article: a leadership development program Novak calls Taking People with You. The key insight is that team building is not, first, about the team. It’s about you. Participants look inside themselves and rate themselves on truthfulness, reliability, openness and self-centeredness. They think about how the treat other team members and how they view others; mistakes. The point is that you’re not fit to build a team until you’ve worked on yourself.  Only then does the program get into forming strategy, communicating it, and gaining alignment, plus other issues.

Novak tells a story about a 40 year Pepsi veteran he once met who was referred to by everyone in the sales group as the “expert on merchandising”.  After answering Novak’s questions, he began crying. Why? “Because I’m going to retire in two weeks, and I never knew anyone felt this way about me!” Novak resolved to never let this happen to anyone in his companies – and he focused on changing the culture of the companies he worked for (starting with KFC a key part of Yum). “I think people would much rather work in a fun environment. So I wanted to create a team that was hardworking and very competitive, but we had fun. And I thought the biggest thing I could do was tap the universal need for recognition.”

Novak started by giving the Rubber Chicken award to recognize people; later he instituted the Walk the Talk award – which is the teeth on legs. Since then, other managers later developed their own fun ways to recognize people’s great contributions. Not only did it change the way people felt about themselves and their teams, but it produced the outstanding results noted above.

What do you do to recognize outstanding contributions to corporate success?  How to do you make success fun?  Share your answers.