Wayne Pankratz, a top executive at an Applebee’s franchise chain, sent a great email to his colleagues this month, crowing that rising gas prices were a “benefit” for the chain. He reasoned that cash-strapped people would have no choice but to take hospitality jobs even if the chain cut its wages, which he encouraged his colleagues to do.
The email ended up on Reddit, where it quickly became a major embarrassment to Applebee’s and to AFC Brands, which operates 121 Applebee’s and Taco Bell franchises, and where Pankratz is executive director of operations, at least for now. A smart leader can learn a lot from this incident.
It’s easy to see why people were upset with Pankratz’s message. “Most of our workforce and potential employee base live paycheck to paycheck,” he wrote. Incentive payments and pandemic unemployment benefits have both ended, leaving them with lower incomes while prices are rising rapidly. “This benefits us,” he wrote. “It will force people back into the workforce.”
And, he suggested, Applebee’s would further benefit from the pressure on other businesses, especially mom and pop stores. Faced with higher prices, these companies would face the unpleasant choice of either raising prices, reducing the number of employees or cutting wages, Pankratz wrote. “Some companies won’t be able to sustain it. This will drive more potential employees into the workforce.”
Once the email went public, the response was immediate and angry, especially among the chain’s employees. An Applebee’s in Lawrence, Kansas was even forced to close temporarily after three of the six executives quit their jobs after reading the email. As for Pankratz, his LinkedIn page has disappeared and his employer is doing everything possible to deny what he wrote. “Maybe he wrote it in the middle of the night. I don’t know,” AFC Brands spokesman Scott Fischer told the Kansas City Star. “The main message here is that this in no way speaks shape or form to our policy or culture, or anything like that to our brand.” Pankratz appears to be staying in his orbit for the time being. Fischer told the Lawrence Journal-World that the company was investigating why he wrote the email. Given what he wrote and the response from the public, it’s hard to imagine that he will stay in that job for long, or that he can ever become 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 good idea, and yet less spectacular versions of Pankratz’ e-mail keep appearing. It’s not clear if the “distribution list” for the email was all AFC Brands or a subset of its executives, but it doesn’t really matter. Once an email goes to a large or even medium-sized group, you should assume that it can appear anywhere, including on social media. Choose your words accordingly.
2. Tone matters.
I think the reason Pankratz’s email has been updated over 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 almost sounds happy about people who can’t pay their bills. He doesn’t dwell on the horrific human suffering of the war in Ukraine, the underlying cause of rising gas prices that he seems so happy about. Recognizing that these economic factors could ease a tight job market and create employment opportunities for Applebee’s was not the issue. Sounding happy about other people’s misery was.
3. Employees are not the enemy.
There is an us-versus-them image of employees permeating Pankratz’s email. And he’s not alone. Bill Adams of Leadership Circle noted in a recent interview with Inc.com that too many managers view employees as a necessary means to an end, rather than the fabric of the organization they lead.
Pankratz notes that in the current economic climate, Applebee employees will likely need second jobs to make ends meet. Rather than seeing this as a good reason not to cut wages, he instead tells restaurant managers to plan early “so they can plan their other jobs around yours.”
And then, in priceless irony, he writes this: “The important thing is that you have the culture and environment that will attract people.” It’s like he doesn’t know what the word culture means, or if it’s coming from the top – or if his email will do the exact opposite.
The opinions expressed here by Inc.com columnists are their own, not Inc.com’s.
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