Latest posts by Peter Kozodoy
Why don’t people do the “honest” thing?
Mostly, it’s because they’re afraid. Afraid, somehow, that the truth will hurt. And it does… except that, in retrospect, honesty is always the best policy. We know that because we have another phrase that we repeat to ourselves throughout our lives, which is, “the truth always comes out.”
If that’s true, it’s always easier to just be honest from the beginning; however, there’s an even greater reason why honesty is so effective, especially in business. Honesty in business works because it represents a public commitment of accountability. When an organization admits fault, vows to change, and then publicly exposes its process for improvement, no one can doubt either the effort or the results.
In short, we (the consumer public) can see for ourselves that an organization has earned our trust and our patronage… and that’s why honesty creates so much in the way of industry-leading profits.
Below is an excerpt from my new book, “Honest to Greatness,” showing how Domino’s Pizza used honesty to transform itself into a pizza powerhouse that absolutely demolished the stock market with a historic investor return, all using simple, brutal, honesty.
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The following is excerpted from “Honest to Greatness” by Peter Kozodoy (BenBella Books, 2020). Reprinted with permission from the publisher.
Just as the financial crisis hit, Dave Brandon, the departing CEO of Domino’s Pizza, announced to the company that their product needed an entire overhaul. And to add insult to injury, he approved a massive marketing campaign that would put his replacement, J. Patrick Doyle, directly in the crosshairs of potential catastrophe. When the board of directors signed off on the otherwise mundane transition of its CEO, I have to believe they never anticipated the departing CEOs “unusual” recommendation for securing the future of the company.
The strategy Brandon approved was simple: go on national television and tell America that Domino’s pizza—you know, the flagship product for which it is named—is terrible.
You might think this would be a firing offense. Yet Brandon wasn’t fired ahead of schedule. And Doyle, the incoming CEO, didn’t back away and decide to play it safe. Instead, he embraced the challenge and, just a year after his appointment, went on national television as scheduled to take a sledgehammer to his company’s brand image.
“This,” Doyle announced in his television commercial, pointing at a pizza that looked like it had been riding in the back row of a Six Flags roller coaster, “is not acceptable. Bryce in Minnesota, you shouldn’t have to get this from Domino’s. We’re better than this.” And so began what would become one of the greatest marketing stories of the last decade.
Although Doyle played the front man as CEO, the Domino’s Pizza Turnaround—as it’s affectionately called—was masterminded by then Chief Marketing Officer Russell Weiner, who at the time of this writing, has unsurprisingly been promoted to president of Domino’s USA.
“Very quickly we found out we had a product problem… we were a pizza company, and customers were complaining that the pizza should taste better. We also had a brand problem—and to see how big of a brand problem we had, we swapped products in competitors’ boxes.”
When Weiner’s team did taste tests of Domino’s pizza presented in competitors’ boxes, they found that people actually liked Domino’s pizza better in a non-Domino’s box than in a Domino’s box, proving to Weiner that the Domino’s brand was having a negative effect on the customers’ opinions and experiences.
Given the substantial evidence that Domino’s had both a product problem and a brand problem, the question before the company was, how would Domino’s begin to change the tide?
After a year, Domino’s had made its pizza taste significantly better in response to all the feedback, as further tests showed. But Weiner was still unsure how he could convey with any measure of trust the message that Domino’s pizza had, in fact, improved.
The question—for you now and for Russell Weiner in 2009—was how to break through that clutter.
Armed with new insights and data, Weiner and his team solved the simple problem of how to overdeliver again, and that’s when they realized Domino’s Pizza can overdeliver by being honest and transparent when nobody else is.
So, they launched a new campaign that showcased how the company overdelivers in surprising ways.
Lest we bury the lead too far, Domino’s Pizza has been the fastest-growing restaurant in America for the 10 years following its declaration of honesty. And, as a reminder just in case you’ve forgotten, the pizza brand created a 3,200 percent return by telling America that its product was terrible.
Domino’s and the inverse triangle
As odd as Domino’s strategy might seem, it’s as effective as it is logical, and it’s the very same strategy that our agency has used for years.
The framework behind this strategy is what we call the Inverse Triangle, which is a simple way to understand the flow of information in a transparent world. The Inverse Triangle framework gives us an information flow based on the shifting balance of power and the new way that transparency has allowed for faster, clearer information to move from one place to another:
As Weiner and his team learned, the best way to source ideas in this day and age isn’t with an executive brainstorm but with a bottom-up approach to gathering information and insights: first from customers and prospective customers, then from frontline employees, then from middle managers, and, ultimately and lastly, from the top executives.
This approach has helped my agency gather the right ideas from the (arguably only) people who matter: the people who take out their wallets and pay money in exchange for a product or service. By conducting focus groups, interviews, and surveys of customers and frontline employees, my team and I have been able to pass valuable insights back to our executive clients. And, perhaps unsurprisingly, we almost invariably see that the executives’ own insights and assumptions at some point diverge from what the customers want and how the customers feel. In many cases, we use what we find to create marketing campaigns that resonate perfectly with the end consumer.
Weiner understood this phenomenon:
“You need to let yourself know that your opinion means nothing,” Weiner asserted, “just like your CEO’s opinion means nothing. The only thing that matters is the opinions of your customers.”
When marketing intersects with innovation
If you can use honesty in your organization at all, you won’t help but use it everywhere—and by the way, that’s how you’ll earn the most explosive, industry-dominating results.
To that end, Domino’s has simply continued on creating “Oh yes we did” moments. While its competitors are focusing on promotions of the month, Domino’s is building custom delivery vehicles. Weiner and his team recognized that if delivery (i.e., overdelivery) is so important to Domino’s, then every piece of their delivery process should be given exceptional care and attention. To date, Domino’s only has about a hundred vehicles, so your odds of seeing one are, admittedly, slim.
Of course, you and I both know that Domino’s didn’t achieve a 3,268 percent ROI with only a handful of cars or a brutally honest ad. The company transformed. Starting from the simple feedback it got from customers, Domino’s has now become a digital innovation company, identifying every single opportunity that exists for being better at overdelivery. For example, you might have used the Domino’s Pizza Tracker, which lets you know where your pizza is on its way from the local store to your front door. This is good for you, but it’s very good for Domino’s: the Pizza Tracker has helped Domino’s track, in real time, how well its teams are performing, where bottlenecks might exist, and where opportunities are lurking for even more efficient operations.
Yet it all started with a simple commitment to honesty. It started with the company doubling down on its promise to make its product better. And it put its money where its mouth is—visiting the homes of its customers to do before-and-after taste tests, and recording them on camera, and transparently publishing those videos. Domino’s exposed its focus groups, shared real-life customer stories, and thrust Doyle out into the spotlight as the scapegoat—or hero that he would eventually become. Domino’s did all of that because it needed its customers to believe Domino’s and believe in Domino’s.
If your takeaway so far has been that you only need to apologize to your customers and promise to do better next time, you’d only be one-tenth of the way there. Plenty of CEOs have apologized over the last century; few have committed to redeveloping the very identity of the business, and even fewer have committed to doing so with the highest levels of honesty, transparency, and accountability.
Unfortunately, taking bold and honest action requires risk, and it could hurt. But, in hindsight, how could you fail by honestly telling your customers that your product sucks and that you’re going to do better, then actually following through and improving?
Isn’t that common sense?
Domino’s Pizza’s leaders, franchisees, employees, and shareholders agree: honesty is a strategy worth fighting for.
“Honest to Greatness” is available now wherever books are sold and can be purchased via StartupNation.com.