On July 11, John Schnatter, the founder of Papa John's Pizza, resigned as chairman of the company after admitting that he'd used the n-word on a conference call in May. Just like that, the leader of a 5,000-store, $1.7 billion company is history.

The conservative Schnatter has a history of making controversial comments on subjects ranging from Obamacare to NFL players taking a knee. But whatever you think of his politics, the speed of his demise is a cautionary tale for leaders in any context.

We tend to fetishize power and position in our culture, and it's easy to assume that the higher you climb in an organization, the more insulated you become from criticism and mundane expectations like politeness. It's not uncommon to meet CEOs and senior executives who seem to have forgotten all about the people they're in their position to serve and who believe others are there to serve them, instead.

Blame Schnatter's downfall on the PC police if you like, but it shows that as leaders ascend through the ranks, ethics and morality become more important, not less. They are more vulnerable to missteps and misstatements, not less. I've worked with leaders of small startups and huge corporations, and the same realities apply to them all. Here are 4 of those realities to take away from the Papa John's debacle and apply to your own business:

More power equals more limitations.

If you're starting a company, you already know that power is more of a burden than a privilege. But if you're rising through the ranks of an existing hierarchy, you might think a key to the C-suite is a hall pass to do whatever you want. Not so. Higher position means more scrutiny and limits on power. For example, senior corporate executives who own stock can't just dump it all whenever they like. To quote Spider-Man, with great power comes great responsibility.

The mic is always hot.

Schattner forgot that as CEO, you're always in the spotlight. Someone is always listening, and your words and actions have implications. Papa John's stock took a dive after his comments became public, and that gave him a boot out the door. Govern your words and actions accordingly, especially in public.  

There is no statute of limitations on regret.

The Internet is the opposite of George Orwell's records-incinerating memory hole from 1984: it remembers everything. As soon as Schattner's racist slur came to light, reporters immediately referenced other comments from 2017 about the NFL and implied a pattern. In other words, your past actions and statements are fair game, so be extra careful.

You become a moral, ethical model whether you want to be or not.

Critics might say, "Why does it matter if Papa John is a racist if his company is profitable?" Well, humans buy pizzas, and humans (most of them) are moved by moral codes. Schattner violated a basic moral prohibition against racism, one of the strongest in our society. The blowback from that has been--and should be--damaging. Remember, when you're the leader, you're a parent, a mentor, and the moral, ethical compass of your organization.

If you want your people to act morally and ethically, you must do the same.

Published on: Jul 12, 2018