John Schnatter, the controversial founder of Papa John's Pizza is out, after a Forbes story revealed that he used a racist slur during a May conference call with the company's then marketing agency, Laundry Service. Schnatter had already stepped down as CEO back in January after he drew criticism for saying saying that the NFL's failure to deal with players taking a knee during the national anthem to protest racism was the reason for his company's stock price decline. (Papa John's had been the NFL's official pizza sponsor.) He remained in his role as chairman of the board, though.

That changed Wednesday, after Forbes released a report detailing the remarks Schnatter had made on the conference call. Ironically, the purpose of the call was to prepare Schnatter for dealing with difficult questions after the NFL controversy and avoid further public relations disasters. But no: Asked how he would deal with online racist groups (some of whom now see him as a hero), Schnatter sought to downplay the problem. "Colonel Sanders called blacks n-----s," he said, and yet never suffered a backlash. Later, in an apparent attempt to demonstrate his empathy for African-Americans, he talked about how in Indiana where he grew up, black people were dragged by trucks until they died. Laundry Service employees on the call were offended by both remarks, and the company terminated its relationship with Papa John's soon afterward.

In an email to Forbes, Schnatter confirmed that reports of what he'd said were true. "Regardless of the context, I apologize. Simply stated, racism has no place in our society," he wrote. But the apology wasn't good enough. Papa John's stock sank to its lowest point in a year and Schnatter, most likely at his fellow board members' urging or insistence--resigned, leaving behind the company he'd created. Schnatter also resigned from the University of Louisville Board of Trustees after a local chapter of the NAACP called for his removal. 

Looking to the past.

Both organizations may be better off without him, for reasons that go well beyond racism. Schnatter founded Papa John's by selling his car to buy pizza equipment so he could sell pizza to the customers in his father's bar. People liked the pizza and its popularity grew. What he built is an amazing achievement of which is rightfully proud. 

But lately, his leadership style might best be described as whiny. Blaming the NFL for the company's share price decline was the act of a poor leader. It fails to acknowledge that sponsorships will only take you so far, and that the popularity of an organization you're sponsoring may change over time. Complaining that Colonel Sanders got no backlash for racism is over-the-top whiny. For one thing, the KFC founder died in 1980, 38 years ago. Times, and attitudes about race and racism, have changed considerably since then.

In both cases, Schnatter made the fundamental mistake of complaining about what someone else had done or how they were treated, rather than focusing all his attention on what he and Papa John's could do to improve the situation. He devoted his time and energy to the past. Today's companies need leaders who are focusing on the future.

Published on: Jul 12, 2018