Cain and a Godfather's Pizza
Part 2
In Part 1, we saw that Godfather’s Pizza had been one of the most successful Pizza companies in America for over ten years. For a couple of years before Pillsbury appointed Cain manager in April, 1986, it had not made much profit. In 1984, Diversifieds Foods Inc, Godfather’s new owners, trying to match the success of number one Pizza franchise Pizza Hut, introduced a “pan pizza.” The results were a failure and it was quickly replaced. A franchise owner Concepts Development with about 125 of Godfather’s nearly 900 units sued the company in February of 1985. Three months later, on May 19th, just three days before Pillsbury announced an agreement to buy the company, the N.Y. Times reported that analysts were mixed about the immediate future of the company.
Analysts are divided over the outlook for Godfather’s, and, by extension, for Diversifoods. “They’re taking positive steps at Godfather’s, paring costs at the unit and corporate level,” says Margaret M.V. Preston, who follows the restaurant industry for Alex. Brown & Sons in Baltimore. “Once they start making money again, the earnings leverage might be great, but I’m not banking on them until late in the fiscal year.”
But Richard E. Pyle of Piper, Jaffray & Hopwood of Minneapolis, is not so sure. “It will be a very sick franchise for some time to come,” he says of Godfather’s[1].
Thus, in the middle of 1985, days before one of the largest Food companies in America, Pillsbury, bought the company, ten months before Cain took over, analysts were mixed about if Godfather’s would return to profitability in 1985. At this point, Godfather’s had been profitable every year since its inception in 1973 through 1984. There was simply no talk of bankruptcy.
Pillsbury President and CEO, John M. Stafford gave this optimistic assessment on September 11, 1985, in the Wall Street Journal less than six months before Pillsbury placed Cain in charge:
“With management help from our restaurant group and technical support from our frozen pizza business, we expect to restore Godfather’s profitability in the near term,” he said.
The CEO Stafford expected to restore Godfather’s profitability in the near term. Three months later, three months before Cain took over, Stafford was still upbeat. In a newspaper article, published December 23, 1985 in the Chicago Tribune, we read:
In Diversifoods, Pillsbury got a well-named company, comprising nearly 400 Burger Kings, Godfather`s Pizza chain, Chart House dinnerhouses and Luther`s Bar-B-Q.
Pillsbury has jettisoned Chart House and has similar plans for Luther`s, but likes pizza and decided after 45 days of looking at the chain to keep Godfather`s.
“The more we saw of Godfather`s, the more we saw there might be real opportunities to bring our fast-food expertise and our pizza expertise and to put some strong management behind the system, which was asking us to help. The pizza category is a growth category, and Godfather`s is perceived to be the best-tasting product,“ Stafford said.
According to Stafford, Godfather`s franchisees welcomed the new boss with open arms.
“The management and the owners of the company store base said: `Boy you guys look like natural parents for us.’ You put pizza technology and your people from your R&D operations in our place and already we are starting to see huge opportunities develop between Pillsbury and Godfather’s,” he said[2].
The statement by Herman Cain that Godfather’s Pizza had been on the edge of bankruptcy when he took over was mostly a lie. PolitiFact checked and instead of exposing the lie, declared that the company was widely considered troubled when Cain took over. It is difficult not to see this as a cover-up of Cain’s falsehood. Instead of giving the facts of the situation, Politifact simply gives Cain’s version of the situation when he took over:
Cain was an executive with The Pillsbury Co. when the company bought Godfather’s in 1985. The purchase was almost incidental, according to press reports from the time. Godfather’s was part of Diversifoods Inc., a conglomerate that included more than 300 Burger King franchises. Pillsbury wanted the Burger Kings, and the chain of more than 800 Godfather’s pizza restaurants came with it.
“The value of Diversifoods was its ownership of the Burger Kings, and the deal made sense without Godfather’s,” John McMillin, an industry analyst, told the Chicago Tribune shortly after the deal. “Pillsbury got Godfather’s for nothing, and some said they got what they paid for.”
The chain’s problems included franchisee lawsuits, an overly long menu and a dejected workforce. Even its TV ads seemed hapless, showing a car full of executives driving around, unable to find a Godfather’s. (“Find one. It’s worth it,” the ad lamely concluded.) As Cain said later, the chain had “had one foot in the grave and the other on a banana peel.”
Press reports at the time Pillsbury bought Diversified Foods do say that Pillsbury had no interest in Godfather’s Pizzas. However, when you are bargaining to buy a company, it is a good strategy not to show interests in the assets that you really want. Its like going to a yard sale and seeing some antiques that you know are worth thousands of dollars in an old bag with a lot of junk. You say that you’re really interested in the junk, but since the antiques are already there, you might as well take them too for an extra buck or two. Obviously, Pillsbury would have just negotiated for the Burger Kings, if that was all they wanted. Horn and Hardart actually outbid Pillsbury for Diversified Foods, offering over $400 million to Pillsbury’s $392 for the 375 Burger Kings and supposedly worthless 875 Godfather’s Pizzas. Horn and Hardart sued Pillsbury claiming that executives at Pillsbury had bribed officials at Diversified Foods to win the company.
Economically, the deal made no sense unless Pillsbury was expecting profits of $20 million a year or more from Godfather’s in the near future. Note this about Pillsbury at this time. It is from FundingUniverse company profile and History:
Pillsbury’s business boomed during the 1970s, as Spoor solidified Pillsbury’s strategy and made several smart purchases. Green Giant and other frozen-food companies gave Pillsbury a much larger share of the food industry and more consistent earnings. Profits in 1976 were divided almost evenly between three groups: consumer foods, agricultural products, and restaurants. By 1984, the agriproducts group had shrunk to only 4 percent and restaurants provided 53 percent.
By 1984, Pillsbury was making more than half its profits, 53%, from its restaurant businesses. The profile continues:
Pillsbury owed much of the credit for its extraordinary growth to its restaurants. By expanding Burger King’s operations and hiring Donald Smith from McDonald’s, it became the second largest fast-food chain operator. The purchase of Diversifoods–at $390 million Pillsbury’s biggest acquisition–included nearly 400 additional Burger King outlets as well as Godfather’s Pizza, Chart House, and Luther’s BarBQ. Pillsbury decided to compete with McDonald’s not in size but in per unit sales. As Burger King continued to grow, franchising became more common and only 20 percent of the restaurants remained company owned.
John M. Stafford inherited a healthy company when he was appointed president in 1984. Each year between 1972 and 1986, the company set records for both sales and earnings. Pillsbury had a reputation for quiet, conservative growth, despite nearly doubling its earnings between 1980 and 1985, from $100 million to $190 million.
With total earnings being about $190 million and that being 53% from restaurants, we can estimate that they were making about $100 million a year in profits from their restaurants. How much could Pillsbury expect to make more in profits if they purchased 375 more Burger Kings to add to the nearly 4,000 they already owned. Cain tells us the answer in an article from December 5, 1983′s Computerworld.
Right now, the position of general manager of the Philadelphia region encompasses all Burger King activity within a seven-state area. That represents $325 million of Burger King sales a year, which I am responsible for overseeing. It represents 400 Burger King restaurants, some 1,600 direct employees. My profit contribution represents about 14% of Burger King’s total profit for the year.
Burger King was not Pillsbury’s only restaurant chain, so we may assume that Pillsbury was making about $80 million from its Burger Kings of its $100 million restaurant profits. Making 14% of $80 million, we can assume that Cain’s 400 Burger Kings were making about $11.4 million in profit. We can say that Pillsbury could have expected at best about $10-15 million in profits a year from the additional 375 Burger Kings bought from Diversified. Making $15 million a year and paying $390 million for 375 Burger Kings means that Pillsbury could have expected to make back their $390 million investment in 26 years. It would have been a totally absurd deal for Pillsbury without the Godfather’s Pizza restaurants. If Pillsbury had expected to make roughly $25 million from Godfathers (as forecasts from Diversified indicated), then they could be making $15 million (from 375 Burger Kings) and 25 million (from Godfathers) or $40 million per year. This, along with the 100 or so other restaurants that Diversified was selling meant a recovery of their full purchase price of $390 million in about 8 years. Only with expected profits of $20+ million or so per year from Godfather’s does the deal really make any sense.
We should also note that Pillsbury management had been looking at buying a large Pizza chain for a year and a half before it bought Godfather’s. According to an April 23, 1984 article in Nations’ Restaurant News (“Power Shift at BK heralds major diversification drive – Burger King” by Joe Edwards):
Campbell disclosed that Burger King plans to acquire or develop another fast-food, nonbeef chain. Haagen-Dazs ice cream stores, which Burger King’s parent Pillsbury acquired last year, already report to Campbell.
Two Burger King officials indicated Campbell is most interested at this point in the fastfood pizza segment but has not made any decision…
Campbell said he is interested in starting a new “convenience restaurant” chain, one tht does not specialize in hamburgers. A Burger King Spokesman defined “convenience restaurants” as dining concepts that include, but are not limited to, fast food.
Burger King will either develop a new concept or acquire “a small, successful chain and develop that,” spokesman John Weir said. “It might be fish, it might be chicken, or it might be pizza.”
Campbell “feels the pizza area is somewhat intriguing,” Weir added.
Buying a Pizza chain made sense for Pillsbury, now making half its profits from its restaurants. Pizza was possibly the most rapidly expanding food product in the mid-80′s. Just four months after purchasing “Godfather’s Pizzas,” in December, 1985, Pillsbury, the number one seller of frozen pizzas in the world, bought out the number two seller Jeno’s Pizza. Pillsbury paid an estimated $120 million dollars for Jeno’s which was doing sales of $125 million a year in 1984. It is a little difficult to believe that Pillsbury would purchase a frozen Pizza company doing $125 million a year in sales, but Pillsbury, the second largest fast food restaurant owner in the United States, was uninterested in purchasing the fourth largest Pizza Restaurant chain in the country, which was doing $325 million a year in sales. According to Pillsbury officials, they, somehow, almost by mistake, ended up buying Godfather’s Pizza. Buying Godfather’s and Diversified’s other restaurants was the largest single purchase Pillsbury had ever made. The line that Godfather’s was incidental to the deal smacks of corporate managers wanting to cover themselves if anything went wrong with their decisions. Sure $20-25 million a year in profits in the near future might have been forecast by Diversified’s owners, but what if profits were near zero as they had been in the past year. The safest course was to say that they were really interested in just the Burger Kings. That way they could say that they still made a good deal if they were forced to sell Godfather’s at its approximately $150 million value that they had paid for it.
In any case, instead of giving us a real financial analysis of the situation, the PolitiFact article simply gives us a smart aleck quip from the Prudential analyst McMillion about Godfather’s Pizzas being valueless. It comes from a Chicago Tribune article written more than two years after Pillsbury bought Godfather’s, [3]. This Chicago Tribune article is simply one of a stream of Cain publicity pieces that praises and glorifies Cain for his great work at Godfather’s without any hard facts, evidence or critical analysis. McMillion was simply echoing the company management line about not paying anything for Godfather’s and Cain’s line that Godfather’s was on the edge of bankruptcy.
The PolitiFact article adopts Cain’s propaganda in talking about what he did with the advertising, saying “He declared the company’s advertising account up for review, pitting ad agencies against each other in a bidding war.”
The “hapless” ad that PolitiFact referred to with people looking for a Godfather’s was produced by Dailey & Associates, the people who created the Wendy’s “Where the Beef” ad, one of the most famous and successful restaurant ads of all time. Upon, taking over Godfather’s, Cain essentially fired them and replaced them with an ad company[4],J. Walter Thompson, that he had worked with at Burger King. The Daily agency was “stunned” according to Ad Week (April 28, 1986, Matthew Lewis). This was an $8 million dollar ad campaign which was essentially a no-bid contract. Cain selected four companies and gave them a week and a half to come up with an advertising campaign. He ended up selecting his old company as the winner. This would be considered an ethical violation at many companies and would be a criminal offense for a manager of a government agency. There was no bidding involved, Cain simply picked the ad he liked, which just happened to be from the only company that he had worked with before. Its like picking four women for a beauty contest including your girlfriend and then selecting your girlfriend as the winner.
We won’t go more deeply into the ad situation since PolitiFact did not charge itself with investigating ethical misconduct by Cain or reviewing the quality of advertisements, but only on Cain’s claims to turn the company around from alleged bankruptcy. If the ads Cain had been more successful than the ads he replaced, there would have been some reason perhaps to credit Cain, but there is no evidence that they were. Cain went through four different Ad agencies in his first two years at Godfather’s. None of them produced successful ads.
All that PolitiFacts needed to do was to look at the optimistic company outlook that Cain himself gave when he took over Godfather’s to see that it was not a company on the verge of bankruptcy. Rather, according to Cain, it was a company that had simply slipped from being the third largest to the fourth largest pizza company over two years and now was in an excellent position to start growing again.
This is what Cain reported about the conditions he found at Godfather’s one week after being named the new CEO on April 9, 1986[5]:
“Godfather’s is not dead,” Cain said. “We’re alive and well, and we’re going to come back in a very strong way.” Once No. 3 in the pizza restaurant business, Godfather’s has slipped to No. 4, behind Pizza Hut (4,000 restaurants), Domino’s (2,500) and Little Caesar’s (1,000).
After a week as president of Godfather’s Pizza, Cain said he already knows that the company does not need a “major overhaul of the talent here.” He said the current headquarters management is excellent and deeply committed to the success of the chain, a part of Pillsbury Co. since last summer.
Compare this bright and optimist tone to Cain’s later pronouncements in September 1987, a year and a half later, that Godfather’s Pizzas had “one foot in the grave and the other on a banana peel” when he arrived[6]. A week after arriving, Cain gave full credit to his predecessor, Henry V. Pettis for giving him a company in good shape with a promising future[7]:
Despite the setbacks, Cain said, the past year has been a time when Godfather’s has taken steps, such as settling the franchise lawsuit, that will pave the way for improvement in the future.
He said his goals are to increase sales 10 percent a year for the next three years and to make a profit in fiscal 1987.
Once profits return, the number of restaurants will grow again as current and future franchise holders see that the chain can make money again.
Cain gives much of the credit for the past year’s progress to Henry V. “Pete” Pettis, who headed Godfather’s from January 1984 [sic] until this month.
He said Pettis moved the headquarters back to Omaha and held the firm together until Pillsbury acquired its parent company, Diversifoods Inc. He led a campaign that convinced Pillsbury to keep Godfather’s rather than to sell it.
Pettis made strides toward mending relationships with franchise owners, Cain said. He said Pettis’ decision to step down and to go into business for himself was a mutual conclusion reached by Pettis and by Jeff Campbell, chief executive for Pillsbury’s Burger King, Godfather’s and Quic Wok fast – food divisions.
Pillsbury Ownership Godfather’s headquarters staff signed a poster – size card for Pettis, now displayed at the company receptionist’s desk, that reads, in part: “We are excited about our future with Pillsbury, and want you to know that we are behind you 100 percent in making Godfather’s Pizza what we all know it can be the No. 1 Pizza Chain in the Country.” Pettis is acting as executive vice president and will be an adviser to Cain, remaining at least on call for several months, Cain said.
Note Cain’s goal to increase sales by 10% over the next three years and make a profit in 1987. Sales fell over the nest three years from $275 million in 1986 to $260 million in 1987 to 242.5 million in 1988. We may presume that the company was not profitable in 1987 and that is the main reason Pillsbury put the company up for sale in 1988. They had given Cain his shot and he had failed to turn the company around or to bring about the profits they had expected. They obviously did not think that Cain was going to turn the company around anytime in the near future.
In Part 3, which I plan to have up next week, we will see how Cain repeatedly made highly suspect claims about how the company was doing. Along with these unverifiable and misleading claims, he kept promising bigger and better things for Godfather’s Pizzas. His promises never materialized. For part 3, click here.
[1] May 19, 1985, Leib, Jeffrey, The Rise and Fall of Godfather’s Pizza, N.Y. Times
[2] December 23, 1985, Gorman, John, Chicago Tribune, Pillsbury—Fat, Sassy and Very Profitable
[3] September 28, 1987, Gorman, John, Godfather’s Gets Well on Some Fatherly Advice, Chicago Tribune.
[4] May 7, 1986, Jordon, Steve, and Batson, Bill, Godfather’s Selects Chicago Advertising Firm, Omaha World-Herald (NE)
[5] April 9, 1986, Jordon, Steve, Janda, Richard, “New ‘Godfather’ Plans Boost in Pizza Market,” Omaha World-Herald (NE).
[6] Above, note #2.
[7] Above, note #4.
Philosopher Jay
Excellent. But I hope you won’t postpone for very long a discussion of Mabone v. Pillsbury Co. (which you mentioned this summer). To me, that’s the most interesting part of this phony’s career, because knowledge about it has the potential to cost Cain some (much?) of his Republican base.
Hi Appreciative reader,
Mabone V. Pillsbury Co. was a successful lawsuit started in 1984 over Pillsbury’s racial discrimination in not promoting black executives. It may have played an important part in Pillsbury’s decision to put Cain in charge of the Godfather’s franchise.
Putting him in charge of the Philadelphia Area Burger Kings with only a nine month quick training course made some kind of sense. Philadelphia is 40% black, but black customers probably accounted for the vast majority of sales. It is fairly clear that he got that job because he was black.
Putting him in charge of Godfather’s Pizza three years later made less sense. If he had done well at Burger King, as he later claimed he did, they should have promoted him to run more of those franchises. Putting him in charge of a new business that he knew essentially nothing about does not really seem like a good idea. Its only advantage for Pillsbury is that it is a higher profile job, so if you are facing a racial discrimination lawsuit, it would be useful.
Unless somebody comes out and says it was a factor in putting Cain in charge of Godfather’s, it is a hard thing to prove. On the other hand, I think that he did a poor job of running Godfather’s and this is provable based on the public record. So I will concentrate on that.
Fair enough, Jay. But raising this question in the best Socratic tradition might just get someone to come out and say it. Or deny it!
– Best to you.
Yeah, it is a great irony that being black helped him to advance in the culture of Pillsbury when that same culture really injured so many hundreds of thousands of blacks. Think of the hundreds of thousands of Pizza and Burger King employees (both black and white) over the last 40 years who worked hard and ended up still getting minimum wage and no health benefits after five or ten years on the job. They provide us with our “happy” meals, are forced to smile and must live in devastating poverty.
Still, Cain never claimed to have improved working conditions for his employees. He believes exploiting workers by giving them minimum wages and no health care is a good thing. He’s not lying there.
It is when he says that he turned Godfather’s around and made profits from a failing company that he is being disingenuous. The fiasco of his management helped to sink Pillsbury, the second largest owner of fast food restaurants in the U.S., as well. Godfather’s poor profit record under Cain put the company in a terrible position. In 1989, Pillsbury was taken over by the British firm Grand Metropolitan. Thus a company that had been owned by Americans for 130 years ended up making money for the British and the European Union.
That is perhaps a more important story than the fact that he was a beneficiary of the civil rights movement and affirmative action programs which he now hypocritically opposes.
Jay,
Large corporate clients don’t choose advertising agencies based on bids. In most cases, the client has a certain budget for advertising and agencies compete to use that budget in the most creative ways possible.
It is also common for a client to change agencies when new leadership takes over and for an executive to favor an agency with whom they have had positive experience along with them. (I have a hard time seeing any correlation between this and the system the government uses the buy products or services.)
Advertising is so integral to an industry like this that, if you’re coming in to move a company in a new direction, one of the first things you do is reconfigure and solidify your brand message. I’d be surprised to hear anyone, familiar with the industry, say there’s anything unusual or unethical about choose an agency with which you’ve had experience.
Hi Chuck,
Perhaps, you’re right. I am just thinking about the ethical implications of the situation. How good of an impression does it make in a company if the first thing you do when appointed to run a company is give an 8 million dollar contract to some of your old friends. It seems as if you’re not interested in what is best for the company, but only what is best for yourself and your friends.
The simple ethical solution is that you have somebody else choose the companies and you select the winner or you select the companies and somebody else selects the winner. In this case, Cain gives the appearance of taking a kick-back and setting up a phony competition to hide it. Obviously a week and half to come up with an advertising campaign makes it seem that he just wanted to give the contract to his old friends and set the competition to make it seem that he wasn’t stealing money from the company.
The company that was working on the ads for Godfather’s had been amazingly successful with Wendy’s. Daily and Associates was one of the leading advertising firms in the country. They had just won a prestigious award for their radio advertising with Godfather’s. If Cain was unhappy with their current ad campaign, he should have given them a chance to come up with another one. Apparently, the company was not informed that anybody at Godfather’s was displeased with the campaign until Cain told them that they had a week and half to come up with a new campaign and they would be competing with three other companies.
Here is an article from Advertising Age talking about the bizarre way that J Walter Thompson was chosen:
Haha… 12 days or 24 days, the creative team scrambles.
I just want to be clear there was not anything unethical or even unusual happening. As for having someone else make the decision, you bring in new leadership TO make those changes. And the marketing thrust is not a detail in a case like this, it is one of the or THE most important thing. If the company was in trouble changes needed to be made immediately.
I wasn’t there, but, in this case, on this point, I honestly believe you’re barking up the wrong tree. Ask anyone who knows the advertising culture.
Hi Chuck,
The problem wasn’t with his right to change an advertising company, but in the fact that he basically gave the $8 million dollar contract to people he had worked with previously. In giving any kind of company contract, you really don’t want to make it look like you’re giving money to your friends, but that you put into place some kind of reasonable system where the best people are being hired.
Apparently Cain himself had qualms about how it would look and that’s why he set up the possibly phony presentations when he knew who he was going to pick all along.
I’m also wondering if Cain got to keep the racehorse that the J. Walter Thompson people showed him. If it was not a gift/bribe to him, it seems silly to waste his time showing him a real racehorse instead of just showing him a video of one.
In any case, he fired the company the following year and apparently fired the next and the next company the following year. The advertising changes did not help. That’s the important thing here.
I find myself in the dubious position of defending someone I don’t know, however, your assertion that, “he set up phony presentations,” is a judgment on your part — I haven’t read anything that proves or even claims that.
Let me repeat this, becuase it may have gotten lost in the fray: what you’re describing is accepted practice in the advertising business. The advertising agency/client relationship operates very differently from the standard business to business practice of purchasing products or services.
In advertising, you’re forming a partnership with another organization that is going to be working with you very closely. Knowing who the folks you’re dealing with is an advantage, not a conflict.
Firing JWT the following year would further prove my point. It’s the business of advertising: if, between the client and the agency, the desired results are not achieved, the relationship will be terminated and another agency will be sought.
Check it out, ask around…
Thanks Chuck,
Here is another report about the actions of Cain at that time. There are many things I find bizarre about this report. It seems to reflect an apologetic attitude by Cain for his actions. Note how he is worried about the other companies feeling that the competition is unfair because he gave them only 12 days to prepare. This article, plus the previous article I published, indicates 1) Neither the companies nor Cain saw 12 days as a normal amount of time for the situation and 2) Cain knew that there was an ethical problem with contacting his old company to compete. 3) Both the company and Cain are trying to reassure people that Cain was not biased in their actions and decision making process.
People generally don’t make denials that they did something wrong, unless they did something wrong or are afraid that other people think they did something wrong.
This may be the norm in the advertising industry, but if unethical behavior is the norm in an industry and someone engages in it, they are not thereby absolved of unethical behavior.
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Omaha World-Herald (NE), Wednesday, May 7, 1986, Steve Jordon, Bill Batson
Cain with agency’s horse blanket . . . “Repositioning” starts with new ads by J. Walter Thompson USA’s Chicago office.
A Chicago advertising agency brought a racehorse to the home office of Godfather’s Pizza on West Dodge Road as the finale to its winning presentation for the Omaha – based pizza chain’s $8 million – a – year ad account.
The Thoroughbred, and the joke that led up to it, brought chuckles to Godfather’s new president, Herman Cain , but didn’t influence his recent decision to hire J. Walter Thompson USA’s Chicago office.
“Total Repositioning’
“That didn’t have a thing to do with it,” said Cain, who nevertheless kept the horse’s blanket, emblazoned with the Godfather’s and Thompson logos.
The new advertising campaign, to begin July 1, will introduce “a total repositioning of the Godfather’s concept,” Cain said.
One of the first steps Cain took when he became Godfather’s president April 1 was to open the company’s ad campaign to competition by four agencies: Dailey & Associates of Los Angeles, Fallon McElligott Rice of Minneapolis, Trout & Reis of New York and Thompson.
Dailey has handled the account since 1984.
Cain said he purposely gave the agencies only a week and a half to prepare proposals.
“We wanted to find out who was really interested in this business,” he said.
He said he almost did not choose J. Walter Thompson to compete for the account because the agency’s New York office handles the Burger King account.
Cain worked for Burger King in Philadelphia before coming to Omaha. Both Burger King and Godfather’s are divisions of Pillsbury Co., and Cain said he did not want the agencies to think he had a bias in Thompson’s favor.
He said he decided to invite Thompson to compete because the Chicago office operates separately from the New York office, because he knew none of the people involved in the Godfather’s bid and because Thompson’s resources might help Godfather’s.
During his initial talk with the agencies, Cain told a story to show that he realized the short preparation time might seem like a disadvantage, depending on how the agencies looked at it.
Story Extension
The story was about two boys who get boxes of horse manure for Christmas, Cain said. One is very unhappy, but the other is elated, saying: “With all this horse manure, there must be a pony here somewhere.” The Thompson executives “took an extension of that story,” Cain said.
When they finished a presentation that lasted nearly four hours, he said, they handed him a box containing simulated manure and said, “There’s not just a pony here, there’s a Thoroughbred,” according to Advertising Age, an ad industry newsletter.
Then they took Cain and other Godfather’s executives outside the company’s office at 9140 West Dodge to display a real racehorse with the decorated saddle blanket.
Cain said the horseplay was fun but not decisive. “They had a very, very strong creative approach.”
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Notice the denials in the article:
“The Thoroughbred, and the joke that led up to it, brought chuckles to Godfather’s new president, Herman Cain , but didn’t influence his recent decision to hire J. Walter Thompson USA’s Chicago office.”
“Cain said the horseplay was fun but not decisive. “They had a very, very strong creative approach.”
Notice that the first statement by the article’s authors says that it didn’t influence the decision. the second statement by Cain says it was “not decisive”. This indicates that it did influence the decision.
Notice the repeat use of the term “very” in Cain’s statement – “a very,very strong creative approach.” This indicates that Cain is afraid that people will not believe him if he says simply that they had a creative approach. He has to add the second “very” for emphasis. This indicates that Cain finds it important that people believe it was the creative approach and not the racehorse that was decisive.
Three reasons come to my mind as to why Cain is being so defensive here: 1) The selection process was biased and Cain wanted people to believe it was not, 2) Cain was afraid that other people would perceive the selection process as biased, although it was not, and wanted to reassure people, 3) Cain kept the racehorse as a bribe and was afraid people would find out, so he is dismissing it as a joke.
All of this might be paranoia on my part. I would rather focus on the fact that Cain had four different ad agencies in the space of 2 1/2 years after taking over as manager. One has to assume that if the ads had been successful and Godfather’s was really turning around and starting to make profits, this would not be the case.
Cain started out with a company that was recognized as a leader in its field and had just won a prestigious award for its Godfather’s advertising. The fourth company he hired was a new start-up company that had never done an ad campaign on its own before.
One last time. It is not unethical. If you’ll take some time to understand the unusual nature of the advertising/client relationship, you’ll understand what I talking about. I encourage you to find a knowledgeable third party and consult them.
Hi Chuck,
We can, of course, disagree on this issue. I will try to seek out opinions of people in the industry. Thanks.
It is no supprise to me that a woman would come out of the wood works to defend Mr.Cain. Some women either are just naive to the situation or maybe they feel that they owe the CEO some type of gratitude for having a job.It is a shame,especially after observing so many sexually abused cases during my career where the male gets away with sexually abusing women on the job and the women have to leave the job and settle for some small compensation. The final resolution for these types of cases are always the male abuser getting to remain on the job and being promoted at the same time. Nothing else is EVER said of the matter, based on company’s policy, which is directed from the top. Man always come out winning in these situations and the women who are abused ends up lossing ever time because this is a male dominated society. What do women get when they do not want to play sex games on the job? They do not get prompted, they are ignored, their charater is reuined because they demand respect, may even loose their job, or given a small compensation to keep their mouths closed. This is a women’s prespective, an no male can dispute this fact if he really wants to be ethical and fair about what goes on in the workplace.
7.
Angela
It is no supprise to me that a woman would come out of the wood works to defend Mr.Cain. Some women either are just naive to the situation or maybe they feel that they owe the CEO some type of gratitude for having a job.It is a shame,especially after observing so many sexually abused cases during my career where the male gets away with sexually abusing women on the job and the women have to leave the job and settle for some small compensation. The final resolution for these types of cases are always the male abuser getting to remain on the job and being promoted at the same time. Nothing else is EVER said of the matter, based on company’s policy, which is directed from the top. Man always come out winning in these situations and the women who are abused ends up losing ever time because this is a male dominated society. What do women get when they do not want to play sex games on the job? They do not get prompted, they are ignored, their characters are ruined because they demand respect, may even loose their job, or given a small compensation to keep their mouths closed. This is a women’s prespective, an no male can dispute this fact if he really going to be ethical and honest about what goes on in the workplace.