The emergence of ugly details of the complete breakdown of the relationship between John Schnatter and his company, Papa John’s Pizza, is creating disquiet among CEOs that things could end so badly for any business leader. The fast-food giant, hatched in a Louisville back room, ended up giving its 56-year-old founder and largest shareholder the complete boot from governance, and now Schnatter is fighting back.
But no CEO understands better than Patrick Doyle how different the outcome could have been, because his departure from Domino’s Pizza last month went down in an exactly opposite way. Doyle retired from the CEO post of the world’s No. 1 pizza company at a similarly young age, 55; on a performance pinnacle for him and Domino’s; and in such a planned, orderly, rational and mutually friendly way that it begs for contrast with Schnatter’s breakup with the No. 3 or 4 pizza maker.
And that’s a big part of the point: While the drama surrounding Schnatter’s ignominious fall has consumed Papa John’s for nearly a year now, the company’s sales performance has slid to the point where Little Caesar’s has been threatening to take over the industry’s third slot behind Domino’s and Pizza Hut. Meanwhile, Doyle’s keen strategy, low-key approach and relentlessly fine execution led Domino’s to a predictable takeover of the top spot last year.
The most salient point for other CEOs in the contrast between Doyle’s departure and Schnatter’s end has to do with how each chief treated his own role in creating and sustaining the company’s success. Doyle handled it beautifully; Schnatter’s approach proved to be much of his undoing.
Schnatter built Papa John’s to a foodservice force on the backs of his personality and charisma as well as defensibly good pizza and service. The sharpest features of the Papa John’s brand became its official sponsorship of the National Football League and television advertisements featuring Schnatter himself, yukking it up in a Papa John’s kitchen with stars such as Peyton Manning.
So it’s hardly a surprise that when Schnatter perceived last fall the league’s national-anthem controversy was hurting TV viewership and, thus, Papa John’s pizza sales, he felt entitled to give his NFL partners a nudge and call them on it. The controversy grew, and many Papa John’s pizza fans began taking umbrage with Schnatter’s injection of his opinions into the issue, especially those who couldn’t countenance his famously conservative political views.
Sure, Schnatter stepped down as CEO to a chairman’s role last fall, making way for his hand-picked successor, Steve Ritchie. Planning a reputational comeback, Schnatter finally was undone a few weeks ago by his performance in a personal sensitivity-training interview in which he used the “n” word in a hypothetical exchange.
His defenders may say that the progressive NGO-Madison Avenue-media complex had it out for Schnatter and wouldn’t relent until he was vanquished. Academics soon will point to the saga as an illustration of the dangers of business leaders getting too far out over their skis when it comes to social and political commentary.
But Schnatter’s biggest transgressions didn’t stem from his ideology or his penchant for expressing it—they were more related to his ego and his apparent conviction that Papa John’s couldn’t possibly go on without the face of Papa John’s. The denouement of this story hasn’t yet been written, but clearly he was wrong about that.
Now consider Doyle. When he took over as CEO in 2010, Domino’s arguably was in a place even worse than Papa John’s has fallen. The Great Recession had bludgeoned sales; franchisees were restive; the product itself was rather unsavory.
Doyle not only grabbed responsibility for straightening out the mess, but decided to inject himself personally into Domino’s marketing—not to make himself the face of the franchise, but to communicate his personal responsibility as CEO for straightening things out and to promise to Domino’s customers that its pizza was going to begin to taste better. He appeared in national TV ads for a while pledging to improve things.
But then, nearly as quickly as he had appeared in the commercials, the self-effacing Doyle was gone from TV. He focused on improving Domino’s pizza, on streamlining the pizza-ordering and delivery process using digital technology, on making franchisees prosperous, on expanding internationally, and finally on ensuring that he would have a successor— turning out to be Richard Allison—worthy of taking the helm of a company that Doyle had transformed dramatically.
Late in his tenure, Doyle insisted in interviews on not making too much of his personal role and on not “taking victory laps” because of the company’s success.
In this fateful contest in the history of an important industry, John Schnatter may have been in the pace car, but Patrick Doyle ended up getting the checkered flag. And in that result may be a lesson for other CEOs as they contemplate their public face and how to lead their companies.