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Executive says dedicated employees mean bright future Krispy Kreme

JamesMorgan_t.jpgBOONE—Krispy Kreme Doughnuts Inc. focuses on more than just making tasty doughnuts. The company values relationships – those with its customers and its employees. That’s why CEO and President James H. Morgan believes the company will overcome its financial challenges of the past five years.

Morgan spoke to business students and others during the Harlan E. Boyles Distinguished CEO Lecture Series March 26 hosted by Appalachian State University’s Walker College of Business. The series is named for the late Boyles who was state treasurer for 49 years.

Morgan left retirement from Wachovia Securities about 15 months ago to head Krispy Kreme. “There were a lot of reasons I said yes, but the greatest was that I knew the people at Krispy Kreme, I knew they had a passion for the brand, I knew they had a passion for the product and I had a passion for them,” he said. “And I believed that they were the people who could turn the company around.”

Morgan said Krispy Kreme was a complicated company that made an uncomplicated product.

Despite its 72 years in business, many think the company’s future is short lived, based on past financial problems.

Morgan disagrees. “We at Krispy Kreme believe that we are guardians of something very special,” he said.  The company is in 38 states and will have locations in 20 foreign companies by year’s end, including China, Turkey and Malaysia.

“Some mistakes were made years ago,” Morgan said. The company has faced a shareholder’s lawsuit and investigations by the Securities and Exchange Commission and U.S. Department of Justice, among other legal actions.

“The people who are paying the price for that right now are not the people who had anything to do with those decisions,” Morgan said. “The employees of Krispy Kreme have been beaten down and berated in the press for five years now. It’s pretty hard to come to work every day, excited about what you are doing when you have that hanging over you.”

Morgan said that adversity will strengthen the company. “I’m not sure you will ever be as good as what you are trying to do in life if you haven’t been humbled at least once or twice,” he said. “You learn to understand what you can’t control and you understand what is truly important.”

Morgan said Krispy Kreme was not just in the business of selling more doughnuts. “Our mission is to use this magic product called Krispy Kreme to make a difference in this world where we live. And I’m telling you, we’re going to do it,” Morgan said.

Morgan told of employees at one Krispy Kreme location who made a special order of heart-shaped doughnuts to help a young boy celebrate his heart transplant anniversary with his classmates. “I want you to understand that’s what Krispy Kreme is,” Morgan said. “It’s not bricks and mortar, it’s not a company that’s not going to be here tomorrow. It’s a company of incredible people.”

Morgan encouraged students to focus on making a difference in the lives of others. “If you do that, I believe that the country might never again face the moral, ethical, business and political morass that has been primary contributors to the current economic turmoil,” he said.