Crisis Management Experiences

Crisis management is a critical organizational function. It is a process or framework that can be used to prepare, prevent and/or reduce the damage a crisis can inflict (Bundy et al., 2017). Besides, crisis management can help an organization cope with and recover from a crisis (Fearn-Banks, 2016). As a process, crisis management can be composed of the following three phases: “pre-crisis, critical response, and post-crisis”. Many models have been built to increase an organization's capacity and skill to anticipate and prevent all the three categories of crises. This paper's principal goal is to explore an organizational crisis event and discuss the response to the event, the current response to the crisis, and life lessons. I will also provide my personal comments regarding the crisis situation and its management. The personal crisis that will be explored is the Papa John's scandal in 2017. In 2017, John Schnatter, CEO of Papa John's, uttered racial remarks, which affected the reputation and performance of the company. 

Organizational Crisis 

An organizational crisis is a situation or event perceived by corporate leaders as highly salient, unexpected, and potentially disruptive. Due to their disruptive nature, such events can jeopardize an organization's goals. In addition, organizational crises can have profound implications for an organization's relationships with its stakeholders. Thus, an organization ought to adopt crisis management strategies to prepare, prevent and/or reduce the damage a crisis can inflict. 

In an organization, crises can stem from multiple sources, which are broadly categorized into two groups: internal and external sources (Isirimah Nnamdi & Onuoha, 2020). Internal crises are further categorized into personal crises and systematic crises (Mehr & Jahanian, 2016). Personal crises arise from individual or employee misconduct, unethical, and/or illegal activities. As the name suggests, system crises stem from operational activities, such as product recalls or quality issues. Lastly, contextual crises are often triggered by natural disasters and pandemics. A prime example is the ongoing Covid-19 pandemic, which has disrupted how businesses operate. In this section, I will describe a personal crisis situation. In particular, I will describe a real-world personal crisis situation –Papa John's scandal in 2017. The 2017 Papa John's crisis is one of the most compelling crisis situations in the world. In 2017, Schnatter, CEO of Papa John's, used a slur during a conference call. Schnatter also made a number of other racially insensitive remarks. This negatively affected the sales and reputation of the company. Papa John's 2017 scandal will be explored in detail in subsequent sections, but first, this paper will provide critical insight into John Schnatter, the man behind the scandal. 

Critical Insight into the Background of the Individual 

John Schnatter is an American entrepreneur and founder. He is widely known as the founder of Papa John's, an American pizza restaurant franchise. He started his early career by founding Papa John's Pizza. In particular, he started this company in 1984 after successfully converting a broom closet into a company. To kickstart his business, Schnatter sold his 1971 Z28 Camaro. Actually, he sold the car to boost his father's business and used the proceeds to buy equipment and kickstart the business of selling pizzas. His product proved sufficiently popular that years. As a result, Papa John's started to grow. 

Papa John's went public in 1993. Since then, Schnatter launched several other businesses, including Calistoga Artisan Sandwiches. Today, John Schnatter's net worth is over $1 billion. The company has also grown and extended its global reach across a number of states in the United States as well as across several foreign countries. In 1994, Papa John's had 500 stores. Three years later, the company expanded and opened 1,500 stores. Today, Papa John's is a global company. It is among the largest pizza companies in America. The company has over 5,199 establishments. Most of these establishments are franchised restaurants operating domestically and in a wide range of countries and territories. Being an avid sports fan, John Schnatter appeared in Papa John's commercials with the National Football League (NFL) great Peyton Manning. Besides, Papa John's sponsors the Super Bowl. 

Today, John Schnnater is commercially known as Papa John. Thanks to his ability to turn his fledging pizza into a global enterprise. However, Schnatter is no longer associated with Papa John's. He stepped down as CEO of the company on January 1, 2018. He was cast aside after the Papa John's scandal in 2017. The following section will provide a detailed description of the crisis that emerged in the company. 

Description of the Crisis Situation 

The controversy surrounding Papa John's 2017 scandal has been around for a few years now. In 2017, Schnatter was accused of uttering a slur and making racially insensitive remarks. He made controversial comments about the NFL's handling of the anthem protests. In particular, Schnatter said that his company had been affected by the "take a knee" protest, a peaceful antiracist protest aimed to draw attention to police brutality. After wading into the debate over national anthem protests, Schnatter partly blamed the NLF for negatively affecting the sales of his company. He downplayed the significance of his racial remarks, but multiple individuals found his remarks to be offensive. 

On July 11, 2018, Schnatter admitted to using the slur. He accepted the accusations: "News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true," said Schnatter. He went ahead to apologize and stated that racism should not have a place in society. The self-made billionaire reiterated that numerous other people, Colonel Sanders, have uttered similar racial remarks but never received backlash. However, in the case of Schnatter, the backlash came so quickly. After admitting to the allegations, Schnatter was cast aside by the company's board and later resigned as the CEO of the company. 

Response to the Event 

Following Schnatter's racial remarks, Schnatter and the board director of Papa John started to fallout. Some of the company's partners started to cut ties with Papa John's. For example, following the crisis, Major League Baseball was forced to suspend its "Papa Slam" pizza promotion with the company. In addition, Papa John's stock prices started to decline. The University of Kentucky ended its partnership with the company, and the university stopped advertising Papa John's products. Moreover, they renamed their Stadium after taking Papa John's name off its football arena. 

The same year, Schnnater sued his company after the board planned to remove him from its board. He hired Patricia Glaser, a prominent lawyer, to represent him. According to the board members, Schnatter had instilled a "toxic" workplace within the company. Furthermore, the board accused John Schnatter of engaging in sexual misconduct, an accusation which Schnatter's lawyer denied. Following the fallouts, the board managed to keep Schnnater from controlling the company's operations. However, Schnatter remained to be part of the company's board. Despite uttering racist remarks, Schnatter claimed that he is not a racist. As such, he sued his company for not taking appropriate measures to investigate the accusations. 

The fallout at Papa John's after the company's sales dropped and hit an all-time low. Since he was the company's face, Schnatter claimed that the company sales dropped because the company performed better with him involved. He also claimed that he was seriously concerned about the company's performance. Following the decline in sales, Schnatter filed another lawsuit against his company. He asked the courts to help him stop the company directors from further breaching their duties. 

Because of the negative impacts of the crisis, the company restructured its organizational structure by promoting Mike Nettles, an executive of the company, to the Chief Operating Officer (COO). The company initiated an emergency provision, which blocked John Schnatter and his associates, such as his family, from having a major stake in Papa John's. 

As of November 2018, Papa John's sales dropped by nearly 10%. Following the decline in sales, a number of firms reportedly showed interest in buying the company. However, proposals to buy the company did not meet the expectations of the board members. The company opted to sell some stakes instead. Papa John's successfully sold stakes worth $200 to a company named Starboard Value LP. 

On March 5, 2019, Schnatter and the board members of Papa John's held a meeting and came to an agreement. Schnatter agreed to resign as well as dismiss the lawsuit he had previously filed. However, he retained his ability to make some decisions. Furthermore, Schnatter was given the ability to handpick who to replace him. Schnatter resigned as the CEO of Papa John's and handpicked Steve Ritchie to replace him. Ritchie is now the president and CEO of Papa John's. 

Current Response to Crisis 

While the best way to prevent a crisis is to be proactive, we cannot always foresee a problem before they happen. Thus, organizations should employ effective strategies to mitigate crises. Assuming that Papa John's scandal occurs again (God forbid), the company would respond similarly. Papa John's will admit wrongdoing, apologize, and take corrective actions to respond to the crisis. Moreover, the company will utilize its core beliefs to rebound and move beyond the negative publicity. 

Currently, the first thing an organization ought to do after a crisis, such as the one similar to Papa John's, is to apologize directly. Rather than making excuses, an individual should acknowledge and take the blame in order to move forward (Mainwaring, 2018). For instance, in the case of Papa John's, Schnatter should have written an empathetic letter to apologize for his actions. The letter should show how John Schnatter's remarks are unacceptable as well as how the remarks do not represent Papa John's position. Although Schnnater did not write the letter, it was written by Steve Ritchie, the CEO that succeeded Schnatter. In today's globalized world, companies should apologize honestly so as to demonstrate that they are running an upstanding operation. 

After apologizing, an individual or company should take immediate action and make conscious efforts to restructure the company. This way, the company would be able to reassure stakeholders that such crises will not happen in the future (Mainwaring, 2018). With regard to Papa John's scandal, the company took the appropriate actions to address the crisis. In particular, the CEO resigned and was replaced by another individual. Furthermore, the company hired diversified experts to audit Papa John's corporate culture. By outlining a plan of action, the company managed to back up its apology as well as progress to solve the crisis situation. 

Life Lessons 

Based on the mishaps that have occurred in recent years – from Facebook's Cambridge Analytica scandal and Pepsi's Kendal Jenner Ad to Dove's public relations crisis – no company is immune to crises. A company can be proactive about preventing personal, systematic, and contextual crises. A company can also establish codes of conduct to prevent a crisis from occurring within the organization. However, it is important to note that it is difficult to oversee all crisis situations. But, there are clear strategies or steps organizations can adopt or implement in the workplace to address crisis situations whenever they happen. "Admitting wrongdoing, apologizing, and taking corrective actions" are some of the steps that companies can take to respond to personal crises Oparanma, 2014). This section's principal goal is to discuss the lessons learned from the Papa John's scandal in 2017. 

Papa John's 2017 crisis shows a number of personal crisis and reputation management lessons. One of the main problems with this scandal is that CEO's face is tied to the brand of the company (Comcowich, 2018). The crisis shows that tying a brand image to an individual creates risk. When such an individual is involved in a scandal, the company is forced to rebrand. According to some crisis experts, Papa John's should conduct extensive public relations as well as extensive marketing campaigns to achieve this (Braud, n.d). One of the lessons learned thus far is that companies should plan ahead. If the Chief Executive Officer or any other individual is tied to the brand, the company should develop a crisis contingency plan (Fearn-Banks, 2016). The plan should include the possibility of a personal scandal. 

A crisis communications plan ought to include how to handle news releases (Mbui, 2016). This includes news that pertains to the resignation of the CEO. After preparing the news releases, the company should have a legal team for preapproval. The board members' clarity of thought is far much better than the heat induced by the crisis (Comcowich, 2018). In Papa John's case, the company's terse announcement regarding the resignation of their CEO lacked planning. In particular, the news release lacked context, empathy, and apology, which are widely considered the essentials of crisis communications (Braud, n.d). 

Another lesson learned from the Papa John's scandal is the importance of media monitoring. Media monitoring tools are often used to monitor how brands and organizational leaders fair in the digital world (Booth, 2015; Comcowich, 2018). By employing these tools, a company can detect potential crises before they become public. Thus, companies should use media monitoring tools as they provide early warning of potential crises. 

Schnatter did not utter the racial marks publicly. Actually, he made the comments during a conference call with the organization's marketing agency. Ironically, the conference call between John Schnatter and the marketing agency was meant to prevent such crises from occurring within Papa John's (Comcowich, 2018). Thus, the lesson learned from this scandal is that it is not good to speak off the record to journalists. This is because they may end up publishing the information. Based on this scandal, top executives ought to be judicious all the time, regardless of whether journalists are or are not within earshot. 

The bottom line is that the 2017 scandal demonstrates the danger of tying the public face of a company to a single person. Although organizations can mitigate such risks, such as via careful planning, an organization should not tie a brand's public relations and marketing to one individual (Braud, n.d). If they, the companies should have crisis management strategies in place to ensure the crises are addressed appropriately and effectively (Fearn-Banks, 2016). Through careful planning, companies can mitigate such risks. 

Personal Comments and Conclusion 

Papa John's is currently taking steps to rebuild the company's brand following the scandal that negatively affected the publicity of the company. However, the company still faces serious hurdles. In my opinion, continuing public feuds with John Schnatter will not help the company make the problems induced by the crisis disappear. Given that Schnatter is the public face of the company ousting him may cause the company to die. Also, companies should not tie the image of their brand to a single person. ss 

References 

Booth, S. A. (2015).  Crisis management strategy: Competition and change in modern enterprises . Routledge. 

Braud, G. (n.d). Papa John's Pizza: 3 crisis communication, public relations, & marketing lessons to learn. Retrieved February 26, 2021, https://www.commpro.biz/papa-johns-crisis-communications-case-study-public-relations-marketing-failures/ 

Bundy, J., Pfarrer, M. D., Short, C. E., & Coombs, W. T. (2017). Crises and crisis management: Integration, interpretation, and research development.  Journal of management ,  43 (6), 1661-1692. 

Comcowich, W. (2018). 5 lessons from the Papa John's PR crisis. [Online]. Retrieved February 26, 2021, from https://glean.info/5-lessons-from-the-papa-johns-pr-crisis/ 

Fearn-Banks, K. (2016).  Crisis communications: A casebook approach . Routledge. 

Isirimah Nnamdi, N., & Onuoha, B. C. (2020). CRISIS MANAGEMENT AND ORGANIZATIONAL RESILIENCE IN TELECOMMUNICATIONS FIRMS IN RIVERS STATE.  Journal DOI ,  6 (11). 

Mainwaring, S. (2018). How to overcome a PR crisis: Lessons from Papa John's. [Online]. Retrieved February 26, 2021, from https://simonmainwaring.com/brands/overcome-pr-crisis-lessons-papa-johns/ 

Mbui, V. M. (2016). The role of communication in crisis management in institutions of higher learning in Kenya: A case study of the University of Nairobi.  A Research Project Submitted to the School of Journalism and Mass Communication in partial fulfilment of the requirement for the award of Master of Arts in Communication Studies, University of Nairobi. Retrieved, May ,  2 , 2017. 

Mehr, M. K., & Jahanian, R. (2016). Crisis Management and Its Process in Organization.  Mediterranean Journal of Social Sciences ,  7 (5 S1), 143. 

Oparanma, A. O. (2014). Crisis management to ensure effective and continuous performance.