January 23, 2020 is a day Joey Wat ’00 will never forget. It was the day China announced that Wuhan — the capital of Hubei Province and with a population of more than 10 million people — would be locked down to curb the spread of COVID-19.
Until that point, Wat, the chief executive officer of Yum China, China’s largest restaurant company, had been aware of COVID-19 but was remaining cautiously optimistic. Her company was well-positioned to provide additional safety for her staff members — a long-standing priority for a restaurant company operating over 10,700 restaurants in more than 1,500 cities in China. For example, the uniforms are made in such a way that employees are able to conveniently wash their hands and arms during service. In addition, staff are required to always wear masks, especially when preparing food.
However, with the announcement of the lockdown on January 23, that optimism changed. Despite at the time being unable to predict the full extent of the outbreak, Wat immediately prioritized her more-than 400,000 employees and knew she needed to lead from the front.
The decisions Wat made from that point forward would influence how the global fast-food industry would continue to survive during a pandemic, elicit recognition from Time Magazine as one of the most influential organizations in 2021 — the only restaurant company included in the list — and solidify Wat’s position in the hearts of her staff and customers.
“I told my board that 2020 was not going to be about making money. It was going to be about winning hearts,” Wat said.
She achieved this by continuing her commitment to innovation and to the safety and well-being of her employees and customers.
Being bold
Prior to the pandemic, innovation was already a core part of Yum China’s competitive advantage — from digital ordering to marketing to experimenting with new food offerings — and central to Yum China’s mission statement of becoming “the most innovative pioneer of the restaurant industry in the world.”
“This statement sounds a bit bold,” Wat says. “But it’s actually quite humble at heart, because we believe that innovation is the necessary ingredient to survival. And it’s as simple as that. It’s not something you choose to do or not to do — it’s something you have to do.”
But for Wat, innovation does not just exist in one department. It is ubiquitous throughout the entire company and something for which everyone is responsible — from leadership to store employees. And so, when the company was faced with the challenge of needing to serve food safely during the pandemic, it only seemed natural that the idea of contactless delivery was developed by one of her store employees — an innovation of which Wat is especially proud.
Not only did this new method of delivery create an environment where customers felt safe to order food and employees felt safe to go to work, but it was adopted by restaurants and brands across the world.
“Once we figured out how to execute contactless delivery, we shared [it] with the entire industry,” Wat says. “If we can learn from each other, I think that’s the best way to stay competitive and to stay in business.”
Leading with empathy
Alongside Wat’s focus on working together to innovate, her leadership is also driven by empathy.
In the days following the lockdown on January 23, Wat began daily crisis calls with her management team, with updates and communications spreading across different markets and departments so that all would be informed. It was not long until Wat faced one of the biggest decisions: Should she shut down all of the stores?
To face this unprecedented question, she relied on her company’s values.
“In our company, customers are not the number one priority — employees are. Customers come next and after that, shareholders. We believe that if we take care of our employees, they will serve our customers well and then the shareholders will see a very nice return,” Wat says.
Taking care of her employees would take on several different meanings depending on their needs. Wat understood her employees well, and they fell into three groups: employees who were younger — perhaps living with their parents — and could afford not to work if the stores were closed; employees who wanted to serve their surrounding communities in China during this crisis; and employees who needed the job.
Wat identified with this latter group of employees.
“I was 15 when I started to work in restaurants and would work every day during Chinese New Year because it had double pay,” she says. “I needed the money for my school. Not everyone has the luxury not to work, and many people need to work in order to keep the lockdown going.”
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Because of the diverse needs of its employees, Wat knew the company could not have one solution for all. And while it closed some stores out of necessity, the company also kept some open. Those that were kept open were either focused on providing free food for the medical staff in hospitals or continuing to serve the community. While there were instances when there were not many customers to serve, Yum China still stayed open.
“We purposely kept the lights on because we wanted the people who passed by the store to feel that life is still normal and that it’s okay,” Wat says. “We wanted to support the spirit of the people, the spirit of humanity.”
Wat continued to take care of her employees by investing even more in safety measures, ensuring they had personal protective equipment and implementing new safety measures like sanitizing delivery boxes before they went out for delivery and when they returned. Additionally, in March 2020, she expanded access to the healthcare program for her employees to not only include the entire store management team, but to include all of their parents, as well.
“You can imagine the impact this had. Healthcare is not only a challenge in the U.S., but it’s a challenge in China, as well. During this difficult time, not only did we bring more employees and their parents into the program, but we extended the coverage age from 65 to 75. That has been very beneficial to our employees,” Wat says.
Because of this strategy for keeping stores open and the innovations launched last year, Yum China only saw a 6% sales loss in 2020 and is already starting to see growth this year, with 46% year-over-year growth in revenue and 315 new stores opened in the first quarter of 2021.
And while Yum China is still on a road to recovery, Wat remains patient and committed to her values of leading with empathy and innovation.
“If 2020 has taught us anything,” Wat says, “it’s that whatever paradigm we have, we must always be prepared to see it break apart. We must always be prepared to think about new ways to solve our problems. But if we also earn hearts, we have days — even centuries — to make money. Everyone will benefit in the long-term.”
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