Q&A: Valhalla's Co-Owner Discusses a 'Golf Experience You Can Only Find in Kentucky'

On the eve of Valhalla’s fourth PGA Championship, David Novak discussed the now-locally owned course, his new book and disruptors in business and pro golf.
Valhalla Golf Club co-owner David Novak.
Valhalla Golf Club co-owner David Novak. / Courtesy Tim Schurrer/David Novak Leadership

Next week, Valhalla Golf Club will host the PGA Championship, the biggest week of the year in Louisville, Ky., that doesn’t involve horses. 

David Novak is part of a local ownership group that purchased the club from the PGA of America in 2022, made renovations and is ready to welcome a major event for the seventh time in Valhalla’s history (a Ryder Cup, two Senior PGA Championships and now a fourth PGA). 

He co-founded and was the CEO of Yum! Brands, one of the world’s largest restaurant companies, and now oversees David Novak Leadership, which develops leaders of all ages. His newest book, How Leaders Learn (Harvard Business Review Press), will publish June 4. 

He talked to Sports Illustrated about the upcoming major, the Valhalla experience and disruptors in his business career—and the current disruption atop pro golf.

Sports Illustrated: In your book, you wrote “I’m responsible for marketing, branding and re-design of a one-of-a-kind Kentucky golf experience.” How’s that going?

David Novak: It’s been the joy of my life. I was really lucky to team up with three great partners (Jimmy Kirchdorfer, Junior Bridgeman and Ches Musselman), and the reason I got involved was that the PGA of America decided it wasn’t in the golf course-running business. The PGA of America had an out-of-town buyer go in and pitch them, to sell the course to them. Jimmy Kirchdorfer couldn’t stand the thought of an out-of-towner buying Louisville, and neither could we. What we were concerned about, as well-intentioned as they might be, is that they would come in and take this major-champion venue and commercialize it, put houses all around it. Valhalla has 500 acres, you could put a lot of houses around it. You could turn it into a for-profit. We didn’t want anybody like that to come in. 

We feel like Valhalla is an icon just like Churchill Downs. In Louisville there are two things that are iconic—the real big icon is obviously Churchill Downs, and Valhalla is famous in its own right in the golf world. We decided to buy it so we could put the local community’s interest at heart. I was particularly excited because I’ve always felt there was a tremendous opportunity to brand the golf experience of Valhalla as Kentucky. There was nothing unique about the experience before we took it.

We applied everything we had done in business to Valhalla. For me, it’s like everything I’d ever done in branding, as a marketing person at Pizza Hut, Pepsi, Taco Bell, KFC. Marketing was my speciality. I know what branding is all about. I felt like we could take the Valhalla brand and really elevate it, and we had a perfect opportunity to do it. Focus on a golf experience you can only find in Kentucky. 

SI: How important is the major-championship pedigree? For the first time in decades, after next week there isn’t another major to look forward to at Valhalla. How important is it to get a big tournament back on the calendar?

DN: We fully expect to get another PGA Championship. It wasn’t contractually obligated (in the purchase), but it was best-efforts. And we have definitely put our best efforts. I can’t announce it now, but we will have more significant golf events at Valhalla. 

SI: In your book, which examines “habits of the world’s most successful people,” you draw on more golfers—Jack Nicklaus, Arnold Palmer, Jon Rahm—than athletes from any other sport. Is there a common thread between them?

I’m going to give you three. These guys understand who they are, and what they own is uniquely their own. The best leaders always know how to be yourself, and so they understand their swings. Whether I’m playing with Jon Rahm, who has a short swing because he had a club foot, or I play with (top amateur) Nathan Smith, who has a real long backswing and tees the ball up real high, they all have their idiosyncrasies which you couldn’t convince them to change one iota. They own their swing. 

Second thing is, once you decide, you have to be committed. Being decisive and then being committed to your shot is key. The shots they miss is when they have some sort of doubt creep in.

The third things are process and discipline. I think the most successful people anywhere, and golfers, have process and discipline around what really matters. They put process around the things they know will get great results and hey believe the process will lead to results. I don’t think there’s a way you can be a consistent golfer if you don’t have the processes to get that done.

SI: I’d be remiss to not ask you about the current state of the game. Given your experience with Yum! Brands and other companies, can you remember in your years a disruptor to your business and how you reacted to it?

DN: When I was at Pepsi, from 1990 to 1994, the carbonated soft drink business was really declining. What was happening was the waters and alternative beverages were really growing. What we did, we felt it was critical that we transform our company to move from just being a carbonated soft drink to a total beverage company. We were totally being disrupted, and we said we had to get into that business or we would just keep declining. That led to us doing joint ventures with Lipton, creating Aquafina, that led to the acquisition later of Gatorade. Just a constant push towards offering more options than carbonated soft drinks.

I was also at Pizza Hut when Pizza Hut was just known for being a dine-in restaurant in your hometown. Domino’s came in and disrupted the industry by offering delivery. We said we had to block every competitive move, and we spent a lot of money and lost a lot of money initially, but we ultimately built a tremendous delivery business as well where had delivery-only units like Domino’s did. But they totally disrupted the category.

An area where we got disrupted that we didn’t respond quickly enough on was KFC. KFC has a great business internationally, but in the United States it’s not that great a business because we didn’t adjust to competition. We didn’t get into the portable food business—the chicken nuggets, the chicken tenders, the sandwich business. Chick-fil-A and Raising Cane’s have done phenomenally well because they got into the portable chicken business, which we didn’t do until it was too late. We basically gave the category away by not being in all aspects of the chicken business. Mcdonalds when i was there sold more chicken than we did. I found that to be embarrassing, i did everything i could do to change that, but we waited too long. KFC is still doing fantastically outside the U.S., and just doing O.K. inside the U.S. 

I would look at Taco Bell on the positive side, Taco Bell disrupted the whole food service industry years ago by offering incredible value. And instead of just being happy with that, we keep offering incredible value and we innovated with all kinds of new products. 

SI: Two of the main themes in your book are learning and listening, how does that play into handling those situations?

DN: You have to be on top of what your competitors are doing. I think the only way you stay a leader is if two things happen: one, you create more value for your customer than your competition. That doesn’t mean having the lowest price—you have the best experience, the best products, but in the end your customers have to say I’m getting more value from this brand than the other brand.

The second thing you have to do is block every significant competitive move. We needed to block Domino’s with Pizza Hut.

cover of book "How Leaders Learn" by David Novak
"How Leaders Learn" by David Novak / Courtesy Harvard Business Review Press

SI: If pro golf fans are the customer, and TV ratings are any indicator, they seem to be pulling back from the product. Is there enough value for customers right now?

DN: There’s tremendous value if you’re a golf purist. You can watch golf now, you can watch golf on the PGA Tour, you can watch LIV. But I don’t think that the game itself is growing like it needs to grow, and is creating enough interest to grow the way it should. 

One of the things I write in the book is that you have to see the world how it really is, not the way you want it to be. One of the things that is hurting golf is that today we don’t get to see the best players in the world play each other every week. The fact that there are now two tours has been diluting to the golf fan. When you watch the tournament now that you used to watch, you’re not seeing all the great players and the players you really love to watch. That’s why the ratings are down.

The leaders have to confront reality. When the PGA Tour and LIV were fighting, both sides were involved in a very costly lawsuit that both sides wanted to get out of. And the PGA Tour was losing some of the most charismatic players in the game. That’s the reality. I give credit to the PGA Board members for recognizing that something had to be done. 

The other thing I write about is the importance of trusting positive intentions—if you have a logjam, someone’s got to extend trust first. I give the PGA Tour credit for acknowledging the reality that if they’re going to be able to bring the best to the fans over the long term, it would be better if you had both of these tours working together in some way. I realize a solution has not been found, but at least they’re talking. There’s no way you’re going to be able to go forward if you can’t at least listen to each other. 

SI: This whole conflict is only a couple years old, and I’m sure you saw this in your businesses, customers react pretty quickly, don’t they?

DN: The customers in this case, they would definitely like to see all players together. Now you have two entities that are fragmenting the golf world, diluting the game.

From my perspective, I really am a golf purist. I like 72 holes of golf, four days, I like tee times, I like golf the way it is. I love watching PGA Tour golf, I love watching the majors. I think that format is definitely the best. But when you look at what’s happening, you can’t put your head in the sand and you have to learn from competition. LIV had 94,000 fans in Adelaide, so what you’ve got to say is, what’s working, what’s not working. A friend of mine, Jon Rahm, went to LIV. I miss watching him, so I started watching LIV every now and then. I think the TV format is not good, there’s a lot I don’t like about it, I’m not a guy who likes music. But 94,000 fans seemed to have a hell of a good time in Adelaide, so there might something there you can learn from. Maybe the team format is a good idea. 

I’m just saying as an outside observer, it behooves everybody to learn from each other. I’d be paying attention to it and I’d be calling to find out what the golf fans like and what they don’t like.

SI: Ending on a lighter note, the PGA Championship is in its third year of all-inclusive food and non-alcoholic drinks for ticketholders. Are you a fan from a business standpoint?

DN: I think if it creates more value for the customer and it works within the business model, why not? Anytime you can give people more and have them feel better about what they’re getting, the better. Anytime you can get people to pay more and feel good about it (laughs), that’s the best thing in the world. You probably have to pay more for your ticket, and you get the free food that you probably won’t eat as much of that you think you will, but you’ll feel like you’re getting a great deal. 


Published
John Schwarb

JOHN SCHWARB

John Schwarb is the senior golf editor for Sports Illustrated whose career has spanned more than 25 years covering sports. He’s been featured on ESPN.com, PGATour.com, The Golfers Journal and Tampa Bay Times. He’s also the author of The Little 500: The Story of the World's Greatest College Weekend. A member of the Golf Writers Association of America, John is based in Indianapolis.