profile

Nudge Newsletter

The rubber chicken that saved Pizza Hut | Nudge Newsletter 🧠

Published 11 months ago • 1 min read

Toy motivation.

In 1994, David Novak was promoted to Pizza Hut CEO.

He wasn’t excited. "It was a graveyard for executives," he said.

"Morale was down, business was down. It needed energy injected into the business.”

The solution? A rubber chicken.

Novak handed out a mini rubber chicken toy (and a relatively small cash bonus) to hundreds of high-performing employees.

The tiny gift had a dramatic impact.

"This took off like you wouldn't believe it helped turned around the mindset of the organization and we started working together with the franchisees and turned around the quality in three years. And the franchisees were now giving us ideas," he told CNN.

Rubber chickens were handed out on planned visits to honour exceptional employees, but they were often awarded spontaneously to staff who went above and beyond.

Yet, it wasn’t just cash and a chick, he also wrote a personal note explaining why they deserved the reward.

“You have to be very specific with what the person has tangibly done and how it is contributing to the success of the organization. It has to be purposeful."

David Novak and his team tie this seemingly small gesture to a dramatic turnaround in the company’s fortunes.

Market cap increased from $4.6 billion to $31 billion. Employee turnover dropped and staff satisfaction rose.

Walk into Novak’s office in 2016 and you would see every inch of every wall covered in pictures of those who received the rubber chicken.

He handed out 1,400 toys in his 22 year tenure and turned the company around.

The behavioural science literature can help breakdown why this small intervention was so significant.

Variable rewards: We’re more motivated by variable benefits than consistent ones (B.F. Skinner, 1938). Spontaneous toys and cash motivate more than a yearly bonus.

Reciprocity: We need to return a favour (Cialdini 1984). Staff feel indebted to a CEO who’s hung their photo on his office wall.

Input bias: We value communication more if we see the effort behind it (Chinander and Schweitzer, 2003). It’s not just a gift and some cash, it’s a handwritten note from the busy boss. The effort makes staff appreciate the gesture more.

A rubber chicken, a $100 bill and a scribbled note won’t transform your business.

But it won’t hurt.

We shouldn’t undervalue these seemingly insignificant gestures as the scientific literature suggests they dramatically outweigh the effort they take.

Cheers!

Phill

Nudge Newsletter

Phill Agnew

I spend 18 hours each week turning marketing psychology into readable newsletters.

Read more from Nudge Newsletter

The Framing Effect Read online Your perception is shaped by framing. Reference how lean a steak is, and you'll boost perceptions of quality.¹ Politicians know this. Pollster Frank Luntz² reports that 68% of people oppose inheritance tax if it's labelled "estate tax," but the figure jumps to 78% when it's called a "death tax." And yet most marketers forget this. We talk about our products and services in unimaginative ways. At bookshops, marketers promote the top "picks this summer". This...

5 days ago • 1 min read

Do new managers give teams a "bounce"? Read online In sports, it's common to hear about the "new manager bounce". It's an immediate improvement in performance following a change of manager. Like most sporting clichés, it's made its way into the working world. An old boss of mine justified a managerial replacement. by citing the need to quickly hit that quarter's KPIs. But is the new manager bounce real? One detailed study¹ on Polish football managers found that players initially ran faster...

12 days ago • 1 min read

The Framing Effect Read online "Does your kid have a ten-dollar head?" That's what Bell Helmets asked parents in this newspaper ad. It seems like a strange question until we understand the power of framing. Let's look at a study on beer to explain. In a study led by Donald LichtensteinÂą from Colorado University, bar menus with descending price order increased average beer sales by 4%. Framing the menu with high-priced options first made the mid-range prices seem like a better deal. Sales for...

19 days ago • 1 min read