Wayne Pankratz, a top executive at an Applebee’s franchise chain, sent a blast email to his colleagues this month crowing that rising gas prices were an “advantage” for the chain. He reasoned that cash-strapped people would have no choice but to take food-service jobs, even if the chain lowered its wages, which he encouraged his colleagues to do.
The email made its way onto Reddit, where it quickly became a major embarrassment for Applebee’s and for AFC Brands, which operates 121 Applebee’s and Taco Bell franchises, and where Pankratz is executive director of operations, at least for now. There’s a lot that a smart leader can learn from this incident.
It’s easy to see why people were angered by Pankratz’s message. “Most of our employee base and potential employee base live paycheck to paycheck,” he wrote. Stimulus payments and pandemic unemployment payments have both ended, leaving them with reduced incomes just as prices are rapidly rising. “This benefits us,” he wrote. “It will force people back into the work force.”
And, he suggested, Applebee’s would further benefit from the strain on other businesses, especially mom and pop stores. Faced with higher prices, these businesses would face an unpleasant choice of either raising prices, cutting employee hours, or lowering wages, Pankratz wrote. “Some businesses will not be able to hold on. This is going to drive more potential employees into the hiring pool.”
Once the email became public, reaction was immediate and angry, especially among the chain’s employees. In fact, an Applebee’s in Lawrence, Kansas was forced to shut down temporarily because three of its six managers quit their jobs after reading the email. As for Pankratz, his LinkedIn page has vanished, and his employer is at pains to disavow what he wrote. “Maybe he wrote it in the middle of the night. I don’t know,” AFC Brands spokesperson Scott Fischer told the Kansas City Star. “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.” Pankratz appears to be staying in his job, at least for now. Fischer told the Lawrence Journal-World that the company was investigating why he wrote the email. Given what he wrote and the public reaction, it’s hard to imagine that he’ll stay in that job for long, or that he can ever be an effective leader within that organization.
What are the most important lessons you can learn from him?
1. Be very careful what you write in a blast email.
That seems like a no-brainer, and yet less spectacular versions of Pankratz’s email happen all the time. It’s not clear whether the “distribution list” for the email was all of AFC Brands or a subset of its executives, but it doesn’t really matter. Once an email goes out to a large or even medium-sized group, you should assume that it could appear anywhere, including on social media. Choose your words accordingly.
2. Tone matters.
I believe the reason Pankratz’s email has been upvoted more than 75,000 times on Reddit has as much to do with the way he expresses himself in his email as what he actually says. He sounds almost gleeful about people not being able to pay their bills. He doesn’t pause to consider the horrific human suffering of the war in Ukraine which is the underlying cause of the rising gas prices he seems so pleased with. Acknowledging that these economic factors might loosen up a tight labor market and create hiring opportunities for Applebee’s wasn’t the problem. Sounding happy about other people’s misery was.
3. Employees are not the enemy.
There’s an us-versus-them view of employees that permeates Pankratz’s email. And he’s not alone. Leadership Circle’s Bill Adams noted in a recent Inc.com interview that too many managers think of employees as a necessary means to an end, rather than as the fabric of the organization they’re leading.
Pankratz notes that in the current economic climate, Applebee’s employees will likely need second jobs to make ends meet. Rather than seeing this as a good reason not to lower wages, he instead tells restaurant managers get scheduling done early “so they can plan their other jobs around yours.”
And then, in a priceless bit of irony, he writes this: “Most importantly, have the culture and environment that will attract people.” It’s as if he doesn’t know what the word culture means, or that it comes from the top–or that his email will do just the opposite.