The Wall Street Journal writes that a 10-month investigation conducted by a special committee of Krispy Kreme directors concludes that the company’s former CEO, Scott A. Livengood, and former COO, John W. Tate, are to blame for a “corporate culture driven by a narrowly focused goal of exceeding projected earnings by a penny [per share] each quarter” – a culture that seems to have driven a formerly high-flying company to the virtual edge of bankruptcy.
“The report, which included ordering a boardroom shake-up so that the board is comprised of a ‘substantial majority’ of directors not at the company during its accounting woes, is aimed partly at helping Krispy Kreme's current management focus on turning around a deep sales slowdown that has badly bruised some of the doughnut maker's franchisees,” the WSJ writes.
“The report, which included ordering a boardroom shake-up so that the board is comprised of a ‘substantial majority’ of directors not at the company during its accounting woes, is aimed partly at helping Krispy Kreme's current management focus on turning around a deep sales slowdown that has badly bruised some of the doughnut maker's franchisees,” the WSJ writes.
- KC's View:
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It is a cautionary note to all public companies that Krispy Kreme, which had a near-legendary brand name and enormous amounts of cultural good will, squandered much of both because of too much concern about the company’s share price. The company’s former leadership saw their most important customers as being the people who bought shares of stock, not doughnuts and cups of coffee.
That’s a terrible mistake for any retailer to make.
