Reputational Crises Profiled - Part 2

Copyright (c) 2010 Peg Jackson

Domino's Pizza

- The nature of the crisis.

Two employees of a Domino's Pizza franchise filmed an unsanitary preparation of a pizza violating other health-code standards while a fellow employee provided narration and posted it online.

The two were charged with delivering prohibited foods and with Domino's Pizza Corporate faced a public relations crisis as more than a million people viewed the video on YouTube. References to it were in five of the 12 results on the first page of Google search for Dominos, and discussions about Domino's had spread throughout Twitter.

A spokesperson indicated that the company was preparing a civil lawsuit. Even people who have been with us as loyal customers for 10, 15, 20 years, people are second-guessing their relationship with Domino's, and that's not fair.

- The quality of the response.

Domino's Corporate Headquarters stepped in and set up a Twitter Account to combat the adverse publicity. Domino's first responded on consumer affairs blog The Consumerist, whose activist readers helped track down the store and employees who made the video. Then it responded on the Twitter site where talk was mounting. The Corporate response was able to gain traction because it went to the source of the information on the video, namely the web. Clearly given the number of people who watched the YouTube video, that is where the source of any reputational damage would be. Domino's Corporate understood that in order to restore its credibility it needed to communicate with this customer contingency via Twitter.

- What were the results?

Domino's was able to preserve its customer confidence and good image because of its swift response including pressing charges against the franchise employees. A more subtle but important result of the crisis was the realization that "Nothing is local anymore," Domino's spokesman Tim McIntyre says. "That's the challenge of the Web world. Any two idiots with a video camera and a dumb idea can damage the reputation of a 50-year-old brand." Domino's is also considering banning the use of videos in its stores.

- What were some of the underlying issues that triggered the crisis?

The structure of a corporation with franchise outlets exposes the parent organization to situations like Domino's video. Franchise owners hire and supervise their employees. Whatever the employees do reflect back on the parent company. The franchise agreement can specify what type of training is required, but depending on the nature of the franchise agreement, Corporate may have limited authority on hiring and firing employees.

Corporate culture in a franchise operation becomes very localized. The corporation may have an organizational culture that promotes a high quality of professional behavior, but the parent organization is not in a position to supervise a local franchise. Thus the corporate culture is whatever the franchise deems it to be. In this situation, there appeared to be very little training and/or supervision in this particular franchise.

- What can your organization learn from this reputational crisis?

News about a company or an incident travels at lightning speed on the web. Companies should monitor social sites to ensure that events or conversations similar to the Domino's incident are not posted or reported. It would be prudent to assign an employee to monitor these sites. Domino's corporate headquarters responded quickly and in a manner that communicated directly with the constituency using these social sites.

Educate workers. It is important that all employees have some media and social-media training, says Ross Mayfield, co-founder of Socialtext, which advises companies on new media. Set clear guidelines. Companies must have clear policies about what is allowed during working hours and what is not, Doll says. It will not prevent everyone from breaking the rules, but at least they will know what the rules are.