In the early morning of March 23, 2022 a leaked email with the subject “Why gas increase is good for hiring” surfaced on Reddit. (Click the hot link to see the actual post.)
The email in question was sent by the Executive Director of Operations of Apple Central LLC, a major franchisee of Applebees restaurants. He was describing the “opportunity” presented by higher gas prices, increasing prices and increased cost pressure on smaller restaurants. Quoting a couple of key lines:
“The advantage [of higher gas prices] has for us is that it will increase application flow and has the potential to lower our average wage”
“Any increase in gas price cuts into [our employees] disposable income […] that means more hours employees will need to work to maintain their current level of living.”
Now, to his credit, after saying “besides hiring employees in at lower wages to decrease our labor cost” he closes with the advice to “Do the things to make sure you are the employer of choice” But this means “Get schedules completed early so they can plan their other jobs around yours.” though he does close with “have the culture and environment that will attract people.”
According to reports in the local newspaper, the manager in the Lawrenceville, Kansas Applebee’s was so angered by the content and tone of this message that he made copies of the email, distributed it to the employees, and he and two other managers quit on the spot in protest forcing the store to close for at least a day. One of those copies ended up being scanned and uploaded.
Within an hour of the posting on Reddit, the thread was picked up on Twitter by Rob Gill. There were tens of thousands of forwards, retweets, views.
That same day the Lawrence Journal-World, the local paper, picked up the story:
Lawrence Journal-World: An email urging lower wages for new employees due to higher gas prices sparks walkout at Lawrence Applebee’s
CBS News picked up the story on March 25.
On March 26 it was covered by the New York Post.
and by March 28 and 29 was the local and then mainstream press, even internationally:
Springfield News-Leader: Applebee’s franchise executive from Springfield fired after leaked email about workforce
Business Insider: An Applebee’s franchise group fired an executive who said higher gas prices and inflation mean stores can pay less because people are desperate for any money to make ends meet
Forbes: “Applebee’s Tone-Deaf Franchise Executive Giddily Says He Can Pay Lower Wages Because of Inflation and Higher Gas Prices
Inc. : An Applebee’s Exec Just Sent an Email That the Company Was Quick to Disavow
Newsweek: Applebee’s Franchise Executive Fired After Email Justifying Lower Pay
International Business Times (in India!): Who is Wayne Pankratz? Applebee’s Exec Proposes to Take ‘Advantage’ of Gas Hike to Lower Wages in Leaked Memo
There are more. Many more. Just search for “Wayne Pankratz” email and you will turn up lots of hits.
OK – so what can we learn here?
I didn’t write about this just to pile on to the story. The mainstream business press has done more than I can ever do. Rather, I want to explore some of the deeper implications, not just for Applebee’s and Apple Central LLC, but for our own organizations.
First the obvious. This was a potential public relations disaster. There was a lot of damage to be sure. At the same time, the story was quickly buried by the ongoing news about the Ukrainians’ fight for their very existence as a nation, and juicier national political stories coming out of Washington D.C. Had this been a slow news period, this story is the type that can get legs under it and reverberate for weeks. That didn’t happen in this case.
Once the story hit the mainstream press, we had P.R. responses like:
Kevin Carroll, COO of Applebee’s: “This is the opinion of an individual, not Applebee’s. This issue is being addressed internally by the franchisee who employs this individual and who owns and operates the restaurants in this market. Our team members are the lifeblood of our restaurants, and our franchisees are always looking to reward and incentivize team members, new and current, to remain within the Applebee’s family.”
And from Apple Central LLC, the company where the email originated: “The main message here is that this in absolutely no way, shape, or form speaks to our policies or our culture, or anything like that with our brand.”
And ultimately Mr. Pankratz lost his job. End of story, a rogue employee, a bad apple (pardon the pun) if you will. Maybe.
Still, I have some questions – and that is all they are, just questions. I know nothing about the culture of Apple Central LLC, the company that owns the franchises where the email originated.
But the email was written on March 9. This story broke two weeks later, and the response was a few days after that – once reporters started calling the company.
What happened in those two weeks?
There is a hint in the email itself. Or more specifically the forwarding chain. Someone in the store in Springfield (Springfield-8289) responds to the original email: “Great message Sir!” and right away we see that maybe this message isn’t so rogue.
It is then forwarded again by a redacted user with the message: “Words of wisdom from wayne!!!”
It was sent to [redacted] Distribution List – that implies a lot of people saw it. It was sent in the evening of March 9. What happened on March 10th? Those are the actions that would tell us if this was a break from the way business is normally done.
The Questions for Everyone
The more subtle story seems to be about the difference between espoused vs. actual values.
Simply, it is the internally triggered response, not the response to outside inquiries, that reflects the actual values of this company.
Was there any effort at all to repair the employee relationships that were damaged? Is there evidence that anyone objected, retracted, or attempted internal damage control with the employees who saw the message before it blew up in online in the press?
Would this story have even happened if someone from Apple Central LLC immediately got in touch with everyone on the distribution list and even visited the Lawrenceville restaurant in person to make amends?
In the face of this kind of blowback, wouldn’t that be something a company would highlight in press releases? None of the press releases or statements said anything about efforts to repair the damaged relationships with employees. None of them said anything about actions being taken immediately. Simply put, there isn’t any evidence of alarms about breaking with the policies, culture or brand until reporters start asking about it two weeks later.
Nor is there any evidence that the individuals who enthusiastically forwarded the message along were acting outside of the cultural bounds of the company.
Quite the opposite.
What Problem Were They Trying to Solve?
Based on all indications it seems this was managed as a public relations problem. It was not managed as a culture problem.
All of the messaging says “Our culture is fine.” Just this guy, who happens to have the title Executive Director of Operations, but we are told he doesn’t make hiring policy.
A Question for You
Let’s even take email out of it. If someone made this case in your company’s leadership meeting, what would the response be from around the table?
Would anyone push back? Would anyone say “Wait, we don’t talk about our people that way.” “We don’t look to trap them in the job here.” “No! That isn’t who we are!”
Maybe there would be an awkward silence until someone changed the subject, but nothing else said.
Or would head nod in tacit agreement, good point, next topic?
Or would there be “Great point!” with nods and smiles?
Or… would there be a discussion about actual ways to take advantage of this so-called opportunity?
Your leadership values are not what is printed on the posters in your hallways. Nor are they what your public relations people tell the reporters when there is an adverse story.
Your leadership values are reflected in what you do, what you say, how you respond day-in and day-out.
If you want to know your values, just listen to what people, especially those in authority, say when they “can talk freely.” Listen to things people say that get no pushback or objection. Those are the values that are driving policy and decisions.
Listen to yourselves. Listen to your values. Own them. If the public face is different from everyday discussions ask yourselves why, especially if the word “integrity” shows up anywhere in your values statement.