Why would Dominos Pizza admit to being a screw-up… on national television?
Starting in 2009 Dominos – who had been losing market share to Little Caesars and other quick-serve pizza chains – started airing TV commercials of CEO Patrick Doyle fessing up to his company using cheap ingredients, wimpy boxes, and other low-quality alternatives.
Dominos had been railed on as having the worst pizza among all competitors. Now Doyle was everywhere you looked talking about it. Dominos had been failing and Doyle wasn’t hiding. He was front and center saying “I’m sorry we’ve been sucking,” then he talked straight about how they were going to fix it.
As humans, we’re wired to try hard not to look bad to our peers. Millennia ago, if you got kicked out of the safety of the tribe, you ended up as bear poop. Social status was a matter of survival because society didn’t have room or patience for those who put the tribe at risk or couldn’t pull their weight.
Being a screw-up got you booted.
So why would a company with nearly 9,000 locations pay millions of dollars to go prime-time and advertise their screw-ups?
In our day of distrust and skepticism those who are honest and up front about their shortcomings are refreshing. Multiple studies have shown that, when a public company faces a scandal or a major setback, the impact on that company’s stock has little to do with the situation itself and almost everything to do with how the company responds. Six months after the news breaks, if a company responds by ducking for cover, going quiet, or trying to place blame (“the economy is bad” or “it’s the government’s fault” or “competition ruined everything” etc.) that company’s stock price takes a walloping.
If a company responds, however, by looking right into the eyes of it’s investors, customers, and employees and taking responsibility – like Doyle did by pointing straight at Dominos issues and saying “we’ve stunk, I’m sorry, and here’s how we’re going to fix it” – the stock price is often UP six months later.
From 2009 to 2016 Dominos nearly doubled it’s share of the pizza-delivery market, taking back firm control of the driver’s-seat in the fast-serve pizza business. In 2016 Dominos had the fastest growth rate among all large pizza chains.
Taking responsibility for our mistakes is not only good for self-esteem, it’s good for business. No person – or business – is perfect, and everyone knows it. Those who have the courage to admit when they’ve messed up and talk candidly about how they’ll fix it… win.
Jason Petersen owns Hansen Lighting Inc. a lighting company with multiple showrooms in Utah.
Jason acquired Hansen Lighting out of near-bankruptcy in 2004 and turned the company around by implementing outside-the-box systems and ideas. The company is now one of the fastest growing companies in America (#3087 on the Inc. 5000 Fastest Growing Companies list) and has been recognized as one of the most profitable privately-owned retailers in North America.
Jason is also the co-founder of XOLogic and Lit Living Inc.