Krispy Kreme found a way to turn a sour taste into sweet success. It took more than sugar. The key ingredient was a pinch of common sense. A great lesson for anyone responding to a crisis. (Or, “krisis,”as they might spell it at the North Carolina-based doughnut maker.)
There are other lessons from this event, too. When there is a problem, don’t just think of yourself. The crowd always roots for David over Goliath. Be quick to admit and fix your mistakes. And, your response should be one that works even when circumstances change.
As you may have heard, this crisis started with an enterprising senior at Metropolitan University in St. Paul, Minn. Looking to pay off his college debt, Jayson Gonzalez decided to capitalize on the craving for Krispy Kreme doughnuts in his community. The nearest store is 250 miles south in Clive, Iowa. (In fact, there is no Krispy Kreme store in all of Minnesota.)
So, Gonzalez started recruiting customers via Facebook at “Krispy Kreme Run Minnesota.” Once a week he would drive 500 miles round trip to pack 100 dozen of the sugary tori into his Ford Focus and then resell them for a tidy profit. He contacted the store ahead of time so they would have his order ready. (Imagine if he rolled up to the drive-through window and said, “I’ll take a large coffee and 100 dozen glazed to go.”)
Gonzalez soon started to get positive press about his venture. “Psssst….wanna buy a Krispy Kreme doughnut? College kid drives them in from Iowa, for a price,” was the headline in an October 26 story published on TwinCities.com, the website of the St. Paul Pioneer Press.
Not long after the story was published, Gonzalez heard from Krispy Kreme “korporate.” He got a call on Halloween that was all trick and no treat. Instead of, “Kongratulations! Keep it up!,” it was, “Cease and desist.”
An unnamed “big manager” said what Gonzalez was doing violated Krispy Kreme policy. Because the sales were out of the company’s control, they were creating a liability.
What was a cute, inspiring story turned ugly fast. TV stations, newspapers, radio stations and digital news operations jumped on it. The theme was, “Big business squashes young entrepreneur.” Social media blew up, too, with calls to boycott Krispy Kreme.
The good news is someone at Krispy Kreme saw the light and it wasn’t the one in the store window emblazoned with the words “Hot Now.” They convinced the company to reverse course.
On November 4, Gonzalez announced on Facebook, “I have received a call directly from Krispy Kreme, and we are working together! A positive solution is taking place as we want to make sure we do this the right way, and I will have more details soon. Stay tuned!!!!”
Later that day, the company confirmed in a tweet, “Today we reached out to Jayson to express our appreciation for his love of Krispy Kreme and admiration for his entrepreneurial spirit. We are going to help him achieve his goals, which include being debt-free when he graduates in 2021, in part by selling Krispy Kreme doughnuts.”
It went on to say it would “work with Jayson as an independent operator to ensure consistent delivery of our high-quality doughnuts to our fans in Minnesota.”
As a “sweetener,” Krispy Kreme said it would give Gonzalez 500 dozen doughnuts free when he resumed deliveries.
As of this writing, Gonzalez had not resumed his deliveries, but he appeared to be on his way. He is running a “GoFundMe” campaign to raise enough dough to buy a bigger vehicle so he can deliver even more Krispy Kremes.
It is good that this story has a happy ending. Someone at Krispy Kreme should be congratulated for getting the company to do the right thing. However, there are several ways the response could have been even better.
The takeaways from this event are:
1. When there is a problem, don’t just think of yourself. A crisis is rarely just about you. In this case, the Krispy Kreme “big manager” may have been right about the company’s resale policy. The manager didn’t want the company exposed to a liability. (Although, that seems to contradict the company’s encouragement of non-profits to hold unsupervised resales at a “high-traffic location of your choice” such as grocery stores, drug stores, shopping malls and religious services.)
The manager’s decision didn’t just hurt Gonzalez. It also hurt the store in Iowa that was selling an extra 1,200 doughnuts every week and the people in Minnesota who wanted to satisfy their hunger. And, once word got out, it hurt the company’s reputation.
When a problem arises, it is a good practice to develop a quick list of the stakeholders and what your actions mean to them. Doing that might have helped the manager make a better decision.
2. The crowd always roots for David over Goliath. We are a nation that loves the little guy, the underdogs. It’s an emotional response. And, who better to epitomize the little guy than Gonzalez, the struggling college student?
That means your response must address the emotional issues as well as the factual ones. You can cite all the policies and procedures and rules that you want. It doesn’t matter. As Ronald Reagan said, “When you’re explaining you’re losing.”
3. Be quick to admit and fix your mistakes. It took four days for Krispy Kreme to reverse itself. In today’s warp-speed info world, that is too long. And, they never said they are sorry or that they made a mistake. They should be and they did.
In its statement on Twitter, Krispy Kreme said, “Our intent regarding the temporary stoppage of him selling doughnuts was to ensure product quality and regulatory compliance to protect both Jayson and Krispy Kreme. Our main concern is that the doughnuts Jayson sells maintain our high product quality standards, given the distance and manner in which he is transporting and distributing them.”
That statement misses the mark on at least two other fronts. First, it lacks true empathy. The statement uses words like “regulatory compliance.” Yuck. Sounds more lawyerly than it should. As for quality, the doughnuts Jayson was delivering just hours after leaving the store were likely to be a heck of a lot fresher than the Krispy Kremes sitting all day (and night) at many grocery and convenience stores. Or the ones available on Amazon.
4. And, your response should be one that works even when circumstances change. In other words, it is better to throw bouquets rather than rocks. It leaves open the door to compromise and resolution. This is a lesson many could learn from Gonzalez.
When Krispy Kreme shut him down, Gonzalez could have said some nasty things about the company. Instead, he remained positive and thanked his customers. “Life happens, and it could be a sign that something else it meant to be,” he posted on Facebook. “Appreciate everyone’s love and support to make this happen, couldn’t have done it without you all.”
Responding to a crisis is part science, part art. It is about being prepared and being able to change on the fly. It is about following the rules, bending or breaking the rules, and making new rules.
It’s a lot of hard work and second-guessing. But, if you succeed, it can be gratifying.
Gonzalez may have put it best in one of his Facebook posts after Krispy Kreme relented.
“It’s one of the first times in my life where it’s not just myself believing in me and my ideas. It’s an incredible feeling, so thank you.”