Author Talks: Why the best leaders embrace active learning

In this edition of Author Talks, McKinsey Global Publishing’s Eleni Kostopoulos chats with David Novak, former CEO of Yum! Brands, about his book How Leaders Learn: Master the Habits of the World’s Most Successful People (Harvard Business Review Press, June 2024). Through personal reflections and interviews conducted with the world’s top executives, Novak seamlessly weaves together an action plan for successful leadership that includes embracing active learning, employing critical thinking, and overcoming obstacles with humility and determination. An edited version of the conversation follows, and you can also watch the full video at the end of this page.

Why did you write this book?

When I moved on from Yum! Brands, I started a podcast called How Leaders Lead, and I started interviewing the best leaders in the world. Everybody from people like Jamie Dimon, to Indra Nooyi, to Tom Brady.

I determined that the one trait they had all mastered was the ability to learn from a lot of different experiences. My passion is to make the world a better place by developing better leaders. I really felt that I could do that by sharing what I’d learned.

You could be an avid learner, and you could be book smart, but the most successful people in the world take the insights they get from learning and pair them with action.

What I determined was that I really wanted to write about the power of active learning—taking action on the basis of what you’ve learned. That’s why I wrote the book, and it has been very gratifying to get the great response to the book.

Tell us about the three essential building blocks of learning.

We really wanted to have a very simple structure for this book. We organized the book based on “learning from,” “learning to,” and “learning by.” Learning from refers to learning from the people, environments, and experiences that are available to us right now.

For example, learning from pertains to your upbringing, the new environments you move into, and the people who know what you don’t. You need to learn from things [and people], such as “truth tellers,” crises, winning, and failure. You also need to “learn to.” Learning to refers to maintaining open minds and great human relationships because you learn the most from people.

You also learn to build your critical-thinking habits so that you can increase the flow of ideas that come into your life. In the book, I talk about the importance of listening, of learning to ask better questions, of pattern thinking. It is important to reflect, to take the time to celebrate other people’s ideas more than your own. So that’s the “learn to” section.

“Learning by” means learning by doing the things that need doing, or the things that will make the biggest difference. I refer to learning by pursuing joy, by preparing, by doing the hard things—the right things—and by simplifying.

Speaking of active learning, what did you learn while writing the book?

I learned not putting off what can be done today. I’ve learned that it’s very important to take action now. See the world and the reality the way it really is, not the way you want it to be.

My wife, one of the truth tellers about whom I write in the book, and to whom I dedicate the book, was a type I diabetic. She had diabetes since she was seven years old, and her health was failing. So I tried to move everything that I could up on the schedule. We had our 50th wedding anniversary at year 48. I had her write a book on diabetes that she always wanted to write, and I helped her do that. As it turned out, in February of this year, she passed away. But I’m glad that we took action by really understanding the reality that we were facing.

How did your upbringing affect the way you lead?

I lived in 23 states by the time in I was in seventh grade. My dad was a government surveyor, so he would survey the longitude and latitude marks in a small town with 15 other surveyors. After his work was complete, we’d move to the next town. We lived in small towns up and down the United States. So my mom would check me into schools, and she’d say, “David, you better make friends, because we’re leaving.” I learned very early on that I was always just one friend away from happiness. I always appreciated that person who would come up to me and welcome me, and make me feel comfortable.

I tried to do that throughout my career when new people joined our company. Going into new situations like that, I learned to make assessments of people and the situation very, very quickly. That upbringing taught me how to get a good sense of those with whom I wanted to spend time—who had talent, who didn’t have talent. When you move every three months and you have to make new friends each time, wherever you go, you better have some pretty good people skills.

I saw my dad in action. He was a great coach. He would coach all my sports teams, and then I learned how to coach. I’ve always felt really strongly about how in business, you need to be a coach, not a boss. You need to really help people fulfill their potential. But people always think, “Oh, you lived in a trailer. How could you, how did you survive that?” Well, I think I succeeded because of my upbringing, not in spite of it.

What have you learned from your failures?

When I first joined PepsiCo and was overseeing its marketing and sales, I tried to understand the reality we were facing. I was sitting in my office one day, and I was looking at all the data. I realized that carbonated soft drink [sales] were declining. It seemed that all the products that were clear were growing and doing well: water, Clearly Canadian, and anything that was clear. So I had an “aha” moment, and I said, “Well, what if we did a clear Pepsi?” And I thought, “Man, this is a huge idea.” I called Roger Enrico, the then-chairman of PepsiCo, and I said, “Hey, what do you think of this idea?” He said, “Well, that sounds very intriguing. Why don’t you go learn about it, and see what you think.”

We developed a clear Pepsi. We took it to focus groups, and the consumers really loved the idea. So we quickly developed the product in our labs, and we put it into a test market in Boulder, Colorado. I’ll never forget the day that it was the lead story on CBS Evening News, when Dan Rather was the anchor at the time. He said, “Today, in Boulder, Colorado, Pepsi-Cola introduced a clear Pepsi.” The news showed the Pepsi rolling off the assembly lines. It was like a phenom: everybody wanted to try Crystal Pepsi.

I met with the Pepsi-Cola Bottlers Association, specifically with their marketing group that advised us. They said, “This is a great idea, David. We think it’s fantastic. But there’s one problem. It doesn’t taste enough like Pepsi.” I said, “Well, I don’t want it to taste like Pepsi. I want it to be different.” They said, “Well, you have to give it more Pepsi-Cola flavor notes or it won’t succeed.” Listen, I said to myself, “These guys just don’t get how brilliant I am. I mean this is a huge idea. I’m going pedal to the metal, and I’m going to make this happen.”

Well, we got it on the Super Bowl. We launched it. It was the first product in Pepsi-Cola’s history that was launched as a carbonated soft drink at premium pricing. Everybody tried it, just like we’d predicted. But three months later, we didn’t have repeat [buyers], because it didn’t taste enough like Pepsi.

I’ve learned that you have to listen to what people say. You have to understand what the barriers are, and what the obstacles are, in whatever you’re trying to do. Do your homework. Understand what the issues are, if any. And if there’s an issue, fix it. Otherwise, you can say, “Hey, I’m going to follow my courage and conviction.” But you have to go through that process.

I didn’t get the Pepsi-Cola bottlers involved, and I didn’t listen to them. We ended up with a failure that was actually featured in a skit on Saturday Night Live. It was pretty embarrassing. Not everybody has their failures air on Saturday Night Live, but I actually feel like the learning that I received was worth it.

Why is it important to learn from the wins?

Well, everybody talks about learning from failures. Failure can really help you learn things that you would never learn, because failure really hits you in the face. But winning is, I think, just as important. I’ve always believed in finding the people who really have outstanding success, then learning everything you can from them. The same thing goes for companies. When I first became the CEO of Yum! Brands, we went out and did best-practice visits. We wanted to talk to the winning companies that got consistent results, year after year after year. So at the time we went to companies like Walmart, Home Depot, Southwest Airlines, Target. We also we went to Singapore Airlines.

We talked to all these great companies and asked them what they did. As we did, we codified what they—what we—learned. Over the last 25 years, we built our company on the five things that we learned about winning companies:

1. They create cultures where everyone counts.
2. They are maniacally focused on customers.
3. They differentiate their brands and drive competitive differentiation in everything that they do.
4. They have consistent people and processes.
5. They have a consistent “beat a year ago” mentality.

We called those five principles the “Yum! Dynasty Drivers.” We built our company around what winning companies had done. We wanted consistent results, and we had 13 percent higher earnings per share growth 13 years in a row. A lot of it has to do with the fact that we learned from the winners.

Why are the best leaders CSEs [crisis survival experts]?

When faced with a crisis, the first thing the best leaders do is they acknowledge it. They don’t put their head in the sand. They say, “We’ve got a problem here.” Then they say, “OK, what do we have to do to solve this problem? Get out of the crisis.” Then they develop a very specific action plan, and they execute that action plan to get out of the crisis. Then they put in whatever procedures or processes they must put into place to ensure that crisis doesn’t happen again.

A good example of this for me would be when I was running Yum! Brands. Taco Bell had an E. coli incident up in the Northeast. We held our investor conference the day of the outbreak. And we immediately acknowledged the reality. We developed a clear action plan on what we could do to improve our food safety processes. Along those lines, we needed to do a better job of ensuring that our lettuce and produce was cleansed more thoroughly before it came into our stores. So we developed a whole new process for doing that. Then we worked with suppliers to make sure that it would never, ever happen again.

When you have a crisis, you have to get your entire team engaged. Take that first step: acknowledge the reality. That day, we told Wall Street how we were going to handle the crisis. Even though our sales were obviously going to plummet temporarily, the stock went up that day because people really felt like we were handling the crisis. More importantly, we laid out the long-term future.

When you’re in a crisis, give people hope that you’re going to come out of it stronger than ever. That’s exactly what we did.

Which leaders impacted your growth most during your tenure as CEO at Yum! Brands?

A number of people really impacted my growth at Yum! Brands. At the top of the list is Andrall Pearson. He was a former McKinsey partner. He was the former president of PepsiCo and a teacher at Harvard Business School.

He opened up so many doors for me, and taught me so much by taking an active interest in me, and helping me achieve whatever potential I might happen to have. Not only that, but Andy was an incredible mentor. Andy was one of the smartest people I’ve ever known. But the biggest thing that Andy did for me was give me confidence in myself. He just said, “Hey David, you don’t realize how good you could be. You’re going to become one of the best CEOs. You’re going to be able to do such great things.”

Andy was an incredible learner. He shared everything he could with me, including the books he read, the articles he saw. He would open doors for people he knew. He showed me how to stay young through learning because he was 80 years old when he passed away. But when he spoke with his grandchildren, he talked about J.Lo and A-Rod and all the celebrities that his grandchildren knew. So Andy was really a great mentor.

John Weinberg was also on our board. John Weinberg was the former head of Goldman Sachs. He was a very humble person who told me something great. He said, “You know, David, what I’ve observed in leaders is they either grow or they swell.” He spoke about the importance of being humble. I never, ever forgot that. He also said that trees don’t grow to the sky. Don’t get too excited with where you’re at right now. It may be great, but things can happen that can slow your growth. Be on the lookout for those things.

I’ve also continued to learn from Kenneth Langone, cofounder of Home Depot. I experienced some very personal health issues at home. Ken once said, “David, I want to get together with you. And we’re going to go out for a ride.” He took me to Dairy Queen, and he bought me an ice cream cone. He said, “My father always took me out to get ice cream when I was going through tough times.” Ken is the most successful guy in the world, and he could buy or give you anything he wanted. Yet he gave me an ice cream cone. That really taught me a lot, especially the importance of doing the little things that you’ll always remember and value. It’s those little things that really add up and make you a special person. Ken Langone [taking me for ice cream] is clearly one of those.

Why is it important to chase the truth ‘like all hell?’

You need to see the world the way it really is, not the way you want it to be. That’s why you should surround yourself with truth tellers. You want people who are going to be strong enough and have the courage to tell you what you could be doing wrong, and what you should be doing that perhaps you’re not doing. Leaders really go astray when they’re just smoking their own exhaust.

You have to seek the truth. You have to make sure that whatever assumptions you have, whatever decisions you’re making, those decisions are grounded in the truth, not some false reality that you’re selling yourself.

What do the most successful leaders have in common?

The most successful leaders have an uncanny combination of confidence and humility. Confidence is something that we all have to have if we’re going to inspire people to follow us. Nobody’s going to follow you if you’re not giving them the sense that they’re not going to win with you. They’re going to follow you if they think you have vision, if they believe in you and the kind of person you are.

So you have to project confidence that makes people want to follow you, and believe in you, because nobody’s going to follow an Eeyore. They’re going to follow someone who has a belief in, and a passion about, what they do, as well as a palpable confidence they exude.

Humility says, “I don’t know it all.” Humility says, “I need you.” Humility says, “Together we can get this done. I can’t do it by myself.”

When you have that balance of confidence and humility, you’ve got the trait that is going to lead you to the most success. Humility is also the trait that makes you an active learner. That makes you constantly seek knowledge wherever you can find it.

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