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Case One

Anthony Byrum

Florida State College at Jacksonville

April 5th, 2020

Antionette Richardson
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Overview

This case study reviews the lack of diversity the Advantica chain in Flagstar under the name

Denny’s offered to consumers and potential employees. The company’s lack of diversity was

transparent in the corporate culture of both its employees and in the manner, consumers were

treated. The diner faced multiple lawsuits and due to its lack of diversity and discriminatory

practices. James Adamson was appointed CEO to lead key initiatives towards diversifying the

Denny’s restaurant. When Adamson took over, he knew that the future of the company depended

on his policies and what he could do to redesign the company’s public image. Adamson hired

Ray Hood-Phillips a former coworker from Burger King that would be well suited for the job of

Chief Diversity Officer. Adamson and Hood-Phillips went to work on re-educating all

employees on diversity and the importance of diversifying the company. Adamson told his top

twelve managers that “if you discriminate, I will fire you” with this new philosophy nine out of

the twelve managers decided to leave the company. Adamson replaced two of those members

with a Hispanic man and an African American Female. A year after Adamson’s appointment as

CEO he received the award for CEO of the year from the NAACP for his work at Flagstar.

Although the diversity training and re-education was a success Adamson and his team knew that

they would need to keep up their work to make the corporate changes on diversity permanent.

During this time the Adamson still had to fix the financial crisis the company was facing from

the negative image portrayed from before his take over, the failed restructuring attempts and the

lawsuits that were settled by the previous CEO Jerry Richardson.

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Discussion Questions

When Jim Adamson first came to the Denny’s restaurant company they were embedded

with discriminatory practices at their main office in Flagstar. When Adamson arrived, he

reinforced his re-education process by stating “If you discriminate, I will fire you.” (Canas &

Sondak,2014). This led to nine out of the twelve top managers at Flagstar to leave the company.

Adamson replaced those managers with one Hispanic male and an African American female.

There was an importance of making the company a better place for women and minorities.

Question One:

Jim has been successful in changing the corporate culture at Advantica. Jim refused to

allow the company to use excuses in order to explain their discriminatory practices. Jim then

hired Ray Hood-Phillips from Burger King who was successful in helping Burger King become a

more diverse company in order to help in his efforts to change the culture. Adamson believed

that he could change the corporation’s culture through dedication and re-education which led to a

drastic change in the image of the company. By brining on Ray Hood-Phillips Adamson knew

that her dedication was exactly what the company needed to refocus on diversity naming her the

Chief Diversity Officer. With all of the changes Adamson and Hood-Phillips brought to the

Denny’s restaurant chain, Adamson was awarded the 1996 CEO of the Year award from the

NAACP. Also, in 1998, the company was awarded a CBS 60 minutes’ story and in 2000,

Denny’s was ranked number one on the “50 Best Companies for Minorities” list by Fortune’s.

Question Two
In addition to the new practices implanted the management came up with a four-part

strategy to introduce diversity into the company. By implementing this four-part system
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Adamson was able to help Advantica to become more effective and inclusive. The company

provided a toll-free number for consumers and employees to report discrimination, showing the

company’s dedication to the new strategy. The company also created an image polishing

campaign and purchased tv time for the documentary titled “The Denny’s Turnaround” (Canas &

Sondak,2014). Adamson also started getting the company more involved with minority-related

events, such as Save the Children. The diversity strategy Advantica has put in place was very

effective. Adamson understood that the company had to utilize diversity training to change the

culture of the company. Everyone, from board members down to the servers, were required to

participate in the training. Adamson also made Marin Luther King Jr’s birthday a company

holiday to send a strong message to Flagstar about the dedication to diversity.

Question Three

The efforts to get to the core problems at Advantica, were met by Adamson and his team.

It was Adamson and his team’s belief that discrimination must remain an ongoing focus to stay

relevant. To try and ensure that every location runs smoothly and is adhering to the

discrimination policies, management required all Denny’s locations to display a toll-free number

so that customers could report any incidents of discrimination. While there is always a chance for

someone to discriminate Adamson and his team made sure that they not only weeded out those

who could not conform to the new company culture but hired minorities into higher level

positions.

Question Four
Some of the other major challenges Advantica faced was that the negative image

impacted the company’s profits as new family dining restaurants entered the market, offering a

better image from the start. Denny’s also had $2.3 billion in debt from a series of restricting
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attempts, and a class action racial discrimination lawsuit brought forth by six secret service

agents who were never served in an Annapolis Maryland location. The company began to

sponsor events such as the 25th Anniversary Soul Train Special, as well as national charities,

such as save the children (Canas & Sondak,2014). The way the restaurant was ran did not make

consumers or employees of different ethnicity or background frequent the location. It took a long

time after Adamson’s appointment as CEO for Activist, consumers, and potential employees to

recognize the positive changes Adamson implemented to diversify the company.

Question 5

If this incident was still going on to this day the company would be able to use social

media to post about their efforts in diversity. In an era of social media presence most companies

are using the platform to show consumers what their social responsibility is and how they are

living up to that mission. As Tyler Butler states “Companies who authentically create and launch

efforts to engage and activate employees of diverse backgrounds reap great rewards.” [ CITATION

Sar18 \l 1033 ]. This quote exemplifies the use of social media. If Denny’s had access to social

media during this time, they would have had instant shares, likes, and reviews to know how their

efforts were affecting consumers.

Conclusion

While Adamson walked into the Denny’s family during a time of crisis, he knew that

with the proper policies and team he could bring the company back to it glory. Adamson and

Hood-Phillips took the diversity changes seriously and left no grey areas for any employees. The

company made the right decision bringing Adamson into the Denny’s family as he has
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completely changed the company’s image. Diversity is a necessary aspect for any company to be

successful and have a long sustainable profit.

Debriefing

While Jim Adamson was the hero of the Denny’s diversification process, I believe that

their work set course for multiple different achievements. Adamson was awarded the CEO of the

year award by the NAACP just one year after taking over, that is no small feet for any CEO to do

in their career. The predecessor to Adamson did not intend for any negative diversity issues to

arise during his tenure as CEO but with the lack of diversity programs and enforcement the

company stuck to previous ways. I believe that Adamson did the right thing by bringing Hood-

Phillips into the company, she had a record for fixing diversity issues at other fortune 500

companies such as Burger King. With the positive image that Adamson and his team created

with their focused efforts on diversity the company is still around to this day providing families

with a welcoming experience.

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References

Byrum, A. (2020). Case Study One: Unpublished Manuscript, Florida State College at

Jacksonville.

Canas, K. A., & Sondak, H. (2014). Opportunities and challenges of workplace diversity:

Theory, cases and exercises. (3rd ed.). Boston, MA: Pearson.

Harbour, S. (2018, Febraury 12). workest. Retrieved from

https://www.zenefits.com/workest/improve-diversity-inclusion-using-social-media/.