Transforming Your Culture: Lessons from Papa John’s

Kathy Gurchiek By Kathy Gurchiek October 1, 2018

​Papa John's Pizza continues to take measures to counter fallout from founder John Schnatter's racist comments during a conference call earlier this year, ramping up diversity and inclusion (D&I) initiatives and distancing itself from Schnatter.

The company will spend up to $50 million to mitigate the negative publicity and make internal changes. That includes—but is not limited to—a third-party internal audit of company culture and implementation of new policies based on the audit.

Other high-profile companies have also made headlines this year over allegations of racist comments or actions. Amy Powell, head of Viacom's Paramount Television unit, was fired July 19 for allegedly making racist remarks, although she has denied any such comments. Starbucks closed all of its 8,000 stores for a day in May to deliver unconscious bias training after employees in a Philadelphia store called the police on two black men who were waiting for a friend.

Schnatter later apologized for his use of a racial slur during a role-playing scenario, but fallout has been extensive. Major League Baseball indefinitely suspended its promotional ties with Papa John's, customers tweeted their outrage, and Purdue University stripped Schnatter's name from its recently christened John H. Schnatter Center for Economic Research.

Coffee Chats and Setting the Cultural Tone

The lesson playing out in the media is that "managers and leaders of an organization set the cultural tone around how decisions are made," said Heide Abelli, senior vice president of corporate learning content at Skillsoft. The e-learning firm has U.S. headquarters in Nashua, N.H. Abelli also teaches business strategy as an adjunct professor at Boston College's Carroll School of Management.

It's important, she said, that organizations educate their entire workforce on the kinds of biases everyone has. That includes confirmation bias—looking only at information that confirms one's existing belief. An example: not offering an international assignment to a woman with children based on the assumption she would not accept because of caregiving responsibilities.

[SHRM members-only toolkit: Building a Diversity Initiative from the Ground Up]

One way to set the cultural tone is to create an environment of "psychological safety," Abelli said. It allows people to feel comfortable speaking up when it appears a workplace decision may be rooted in bias without putting the other party on the defensive.

Nigel Travis, former chief executive at Papa John's, current CEO of Dunkin' Brands in Boston and author of The Challenge Culture: Why the Most Successful Organizations Run on Pushback (PublicAffairs, 2018), writes that giving employees permission to offer a different view can lead to positive change.

The idea "is to get the best solutions you can and build a business that's sustainable," Travis said in a CNBC interview.

Travis connects regularly with Dunkin' employees in meetings called Coffee Chats. One such discussion prompted a change in the company's family-leave policy, adding four weeks to the existing six weeks for parents and allowing for more-flexible schedules, he says in his book.

Demonstrating a D&I Culture

An organization's leader must set the cultural tone, but HR has a vital role in putting forward what the culture should be, Travis said. That includes a responsibility to bring the importance of D&I to the top leader's attention if it's not on his or her radar.

Travis was president and CEO of Papa John's from 2005-08, president and chief operating officer of Blockbuster from 1994-2004 and senior vice president of HR at Burger King from 1989-91.

"Culture is not a 'thing' you pull off the shelf," he told SHRM Online. "It's something a bit like a birth of a child. It's born, it's supported, it's nurtured, it's encouraged. It truly embraces differences," including viewpoints and how people approach problems.

With D&I, "you have to make sure it is seen as making the business better" and not just something nice to do, he noted.

Papa John's CEO Steve Ritchie pledged in an August online letter to the public that the company "will demonstrate that a diverse and inclusive culture exists at Papa John's through our deeds and actions."

That includes, he said, identifying an outside expert to audit the company's processes, policies and systems as they relate to diversity and inclusion, supplier engagement, and company culture. A special committee of the board will oversee the audit.

"Racism and any insensitive language, no matter what the context, simply cannot—and will not—be tolerated at any level of our company," he wrote.

Ritchie and Victoria Russell, the company's chief of diversity, equity and inclusion, went on a multi-city listening tour over the summer so that employees could share their concerns.

In an attempt to regain the public's trust, Papa John's apologized to customers in a Facebook ad that used tweets from customers expressing disappointment and outrage. The company thanked them for their anger, criticism and honesty, noting "it is making us better."

In an online statement, Ritchie outlined other steps the company has taken or will take:

  • Diversifying the company's leadership team.
  • Assembling a special advisory group made up of nationally respected diversity, equity and inclusion experts.
  • Establishing a process for communicating progress against transparent goals to everyone in the Papa John's family.
  • Having all employees undergo diversity training; the leadership team already has done so, he said.

Papa John's did not respond to requests from SHRM Online for comment about its D&I initiatives. However, D&I training "was already in the works" before Schnatter's comments made headlines, Russell said in an interview with another news outlet.

"The blessing in disguise is that this situation has allowed more time, attention and resources to be paid to this initiative," she said in the Sept. 24 article. "Our trainings are definitely coming," but, unlike Starbucks, "it won't involve shutting down all operations for a day."



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