As I read the article more thoroughly, it became clear that the advice was sound. As we often discuss in my classroom, it is usually prudent for firms in the grips of a crisis to: “Tell it all. Tell it fast. Tell them what you are doing about it. And, get back to work.” In other words, transparency, authenticity, and honesty are three go-to qualities that will serve any organizational challenge.
Having had to effectively manage many crises, not every incident of shame necessarily relates to economic loss or disruption of operations—two key indicators that a firm is in crisis. Often, the incident that triggered the attention does not reveal a crisis is present in and of itself. What the public looks for is how the firm handles the event?
Now, let’s look at Subway and the sad and despicable story of Jared Fogle. From my perspective, the Jared issue is the tip of the iceberg of Subway problems. Fogle is but one of myriad issues that characterize a company that indicates the firm is everything but transparent, authentic, and honest.
There is evidence that suggests Subway is an organization operating below the surface. Based on a series of public events over time, Subway suffered from what appears to be a subterranean culture, where secrecy, deception, and sleight of hand seemed to be the order of the day. I have been around the food business a long time and will rely on experience to tell you that Subway has been sitting on a powder keg, well at least a stink bomb, for a long time.
Certitude on such matters is only obtainable from the inside, yet on closer inspection, Subway's erosion of sales is only only mildly eclipsed by the sordid revelation of Jared Fogle's secret life. A pattern of actions reveals a deeper issue at Subway—a pattern of guileful deception.
Back in 1998, Fogle lost 245 pounds by adhering to a diet of some 700 Subway sandwiches over the course of about a year. After an article in Men’s Health magazine titled “Stupid diets … that work,” Subway’s ad agency made Fogle the attention of a campaign touting Subway’s “healthy” food—a dubious claim, at best. But, a public seeking silver-bullet solutions and simple answers bought the pitch and Subway sales broke out from the pack leading Subway to be the largest food chain with nearly 45,000 units globally.
Jared’s 10 year reign as pitchman for Subway culminated with his 2008 “Tour de Pants” in which he told his story—including the rare feat of keeping the excess weight off for a decade.
Subway replaced Fogle with the $5 Footlong promotion scheme triggered by the Great Recession which demanded a value response. The campaign was highly successful, with one exception: the sandwich was only 11 inches long. Frivolous lawsuits based on deceptive advertising practices followed.
Faulty measuring is certainly not a tragic breach of trust, but it is a telltale sign that Subway management was willing to overlook a fact that had to be apparent to all in favor of making a powerful ad claim.
Then there is the matter of its internal relations. A study of franchise operators by Congress in 1998 revealed Subway had more lawsuits than the seven largest franchised restaurant chains combined. Again, in and of itself, not so unusual as the firm has considerably more franchise holders so, one could say, it will be involved in more litigation. But, more than all of its seven largest competitors combined? It seems a pattern has forming.
In 2014, Subway admitted its bread rolls contained a substance used to make yoga mats, but vowed to eliminate the offending ingredient. The troubling part is that the action occurred only after a food blogger pleaded with the chain fix the problem.
Life around the Milford, CT restaurant chain must be challenging. Management turns a deaf ear to product details like the size of its products, and the quality of its ingredients. Further, its actions toward its partners in business (franchise holders) generates outsized litigation activities. And then, there is the sad story of Jared. Seldom does such a pattern of secret behavior by such a widely recognized icon of the chain go unnoticed by active, engaged management. Just as in the Tiger Woods case, the inner circle is usually highly aware of such aberrant behavior. Choosing to ignore its consequences is a sign of deceit.
Had enough? Me too. I think the picture is clear. The precipitous decline in Subway sales recently (some $400-million last year) is not so much attributable to Jared, but is symptomatic of a culture that is suffering from a lifetime of trickery, deception, and tomfoolery. What's more, the firm was unable to recognize that its bag of tricks had run its course.
Consumers today have evolved in their definition of what constitutes healthful eating. Fresh is not Subway Fresh. A diet of 700 sandwiches is not considered healthy eating by any standard. Healthful bread does not contain azodicarbonamide, an ingredient in yoga mats. The people formulating the products in large food operations are meticulous about standard weights and measures where an ounce variation could mean millions of dollars in costs.
The crisis lesson to learn from Subway was delivered many years ago by Sir Walter Scott: “Oh what a tangled web we weave, when first we practice to deceive!”