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How Not to Fix a Toxic Culture–Papa John’s Crusty Leadership Gets Panned as 2nd CEO Gets Canned

By September 3, 2019 No Comments

They say one definition of insanity is doing the same thing again and again and expecting different results.

Insanity, meet the thought process by Papa John’s Pizza’s Board of Directors that just replaced its 2nd CEO in 19 months.

You’ll remember the 1st one–the original Papa John himself, John Schattner who was the founder and face of Papa John’s on TV for years.  While stories varied, he left the company under a dark cloud after he made reportedly racist remarks.  Additionally, there were damning stories about a toxic culture at the chain.  In one of them, Forbes interviewed 37 former employees and found widespread bad behavior that ran rampant within the company–spying, groping, and harassing ran rampant under Schattner.

After the racist remarks that went public forced Schattner out and even caused the stripping of the Papa John’s name from the University of Louisville’s football stadium, the Board of Directors made a change at the top.  They fired Schattner and replaced him.

Surely, you would assume the board brought in somebody to take care of the problems, right?

No, they named Steve Ritchie, a close friend of Schattner’s who, according to a Forbes article, was heavily involved in the poisonous culture.  Whether intentionally tone-deaf or not, Ritchie’s ascent to the CEO role sent a loud and clear signal to every employee that the board signed off on the cultural status quo.

What should Papa John’s leadership have done instead to fix the culture?

  1. Cleaned house of the cultural problems, no matter how high in the company they were.  At the very least, not elevated them.
  2. Get employees involved in helping reshape the culture.  Find out what the problems were in a transparent way and deal with them.
  3. Killed some sacred cows that symbolized the toxicity problems and create some new things that show the leadership’s commitment to a good culture.  In my book, The Arsonist in the Office, I talk about Cumulus Media CEO Mary Berner’s actions after taking over a company with a toxic culture.  She found a disconnect between top leadership in the organization and rank and file employees.  One glaring example was that lower-level employees were not getting raises, but executives were flying on the company’s corporate jet.  Berner sold the jet–to help fund employee raises. Boom!
  4. Set standards for the behavior of individuals and the organization as a whole.  It’s not rocket science.  We are all judged by our character–including organizations.
  5. Educated people at all levels of the organization and provide ‘booster shots’ to continually foster the positive values and standards.
  6. Enforced the standards if necessary.  Whether the offender is entry-level or they’re a high producer, hold everyone to the same expectations.
  7. Considered whether they are worthy of being on a board of directors if they weren’t serious about addressing an obvious, glaring weakness in the organization that had hurt the company reputationally, financially and legally.  Given their naming of Ritchie to the role of CEO following Schattner raises serious questions about the board’s ability to address tough issues.

Let’s hope that Papa John’s incoming CEO, Rob Lynch, is given the opportunity to clean up the culture and that his board will commit to being a key ingredient in making it happen.

Boards of directors can have a significant impact on an organization’s culture and, as I referenced in a recent LinkedIn article, can also create new liabilities for the organization if they’re asleep at the wheel.  Recent lawsuits involving #Lululemon and other companies are focusing on the actions and inactions of Boards regarding cultural issues.  It’s imperative for the sake of employees, executives boards, shareholders, and the families who rely on these organizations, that leadership takes cultural problems seriously.

Thanks for reading and I would enjoy hearing your thoughts.  If you want to read more about what you can do to build and protect your organization’s culture–what I call ‘fireproofing’– I hope you will check out my book, The Arsonist in the Office.

Pete Havel is the author of The Arsonist in the Office: Fireproofing Your Life Against Toxic Coworkers, Bosses, Employees, and Cultureswhich is available on Amazon and through his website at www.arsonistintheoffice.com. He serves as a consultant, speaker, and trainer for organizations in need of cultural transformation and fireproofing techniques. He can be reached at pete@petehavel.com or 855-NO-ARSON.

 

 

 

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