M/P’s Yahea Abdulla speaks out about the Papa John’s founder and his recent remarks.
You’re likely aware of Papa John’s, one of North America’s largest pizza chains with over 3,400 restaurants across the United States and Canada. And, if you don’t live under a rock, you’re probably also aware of controversies surrounding its divisive founder John H. Schnatter, ranging from his comments against the Affordable Care Act to blaming the NFL, which they sponsored at the time, and football players’ kneeling protests for slumps in pizza sales.
Yes, free speech is alive and well, and Mr. Schnatter has every right to take whatever position he wants. But, when you’re leading a massive public organization with a diverse set of customers, employees and franchisees, your words matter and can have serious ramifications for your business’s reputation, corporate culture and investors.
Last week, Schnatter crossed the line with his board when Forbes’ Noah Kirsch broke news that the outspoken executive dropped the “N” word in a discussion on the topic of racism during a conference call with their creative ad agency back in May. Following the coverage and at the board’s urging, he stepped down from his position as their chairman of the board that same day (although, ABC reports that he’s now claiming it was a mistake and may be trying to get it back). This follows the relinquishing of his position as CEO following his comments against the NFL in 2017. (The company also lost its official sponsorship position with sports league, and competitor Pizza Hut was quick to jump into its place).
Although the company’s stock initially took a hit, they did recover over the past week following announcement of the change in board leadership. Unlike Chick-fil-a, which has shown resilience following backlash to controversial statements by company leadership—particularly by COO Dan Cathy against same-sex marriage in 2012 (they did do some back-peddling there)—Papa John’s is a publicly traded company and the latest controversy isn’t about a topic tied to the founder’s well-known religious convictions but is purely political — at best, it’s insensitive and tone-deaf and, at worst, it’s just racist.
The question Schnatter and any high-profile business leader in his position should ask themselves before making controversial statements is, “Can this really help my company?” No matter the issue, it comes down to the fact that people in positions of power have a powerful voice in the first place because of the companies they represent. The best policy is really to take a “do no harm” approach. At the end of the day, Schnatter’s comments have created zero value for the Papa John’s business while likely generating massive headaches for everyone within his organization, alienating potential customers and impacting public perception of the brand. When an executive uses their public pulpit to serve their own ego over their business’s interests, they’ve failed in their role as a leader.
In this case, if Schnatter cares at all about what’s best for the pizza empire he built, he should cut his losses and start thinking about how he’d like to spend retirement. Otherwise, everything stops being about the business and starts being about what’s best for the ego of Papa John. Who wants to invest in that?