"Conscious" Business Makes Business Sense
John Mackey opened a small health food store in Austin in 1978, which in 1980 merged with another local natural foods store to form the foundation on which Whole Foods Market was born. Mackey has led Whole Foods Market since the beginning through mergers and internal development to create a FORTUNE 500 company. Whole Foods is now one of the top 12 supermarket companies in America and the world's largest natural foods retail chain.
Mackey says his business philosophy is to act with care and responsibility toward all of the various stakeholder groups of the company and to operate Whole Foods Market with social and environmental responsibility. He was named 2003 Entrepreneur of the Year by Ernst & Young.
Justin Fox: Can you get so busy with heroics that you miss the things that sustain the business?
John Mackey: You’re supposing there that there is a tradeoff, and I would argue that there is a synergy. I always like to say if you focus on tradeoffs you find them. If you focus on synergies you find them. You can always take your eye of the ball. I mean that is at risk at any time in your business. I think in the case of Whole Foods we realize being grounded well in the principles that we need for our business to flourish that I don’t think we’re at too much risk. We’re more focused than ever on taking care of the basics.
Justin Fox: So in terms of the age-old debate about are companies there for the shareholders or for something else, is there one group? Is it customers? It is employees or is it this "purpose?"
John Mackey: That gets back into the second principle really of the conscious business, which is the stakeholder model, the interdependent stakeholders. There is this tendency. I think it’s kind of deep in human nature to think in terms of the zero sum, that if one stakeholder is winning then necessarily someone else must be losing. It comes from our sports metaphors where there is one winner and lots of losers... to this idea of a fixed pie where if someone is getting a bigger piece of the pie someone else has to be getting a smaller piece of the pie and what need in social justice is to make sure people get equal pieces of the pie.
Whereas a conscious business recognizes that you can have an expanding pie and that potentially everyone can get larger pieces of the pie. The stakeholders are interdependent. Management’s job at Whole Foods Market is to make sure that we hire good people, that they are well trained in their work and that they flourish in the workplace because we found that when people are really happy in their jobs they’re going to provide much higher degrees of service to the customers. We like to say happy team members result in happy customers. Happy customers do more business with you, they become advocates for your enterprise, your company and that results in happy investors, so happy team members resulting in happy customers resulting in happy investors. There is a win, win, win, win strategy, not a zero sum, not with one gaining and another one losing, but while our team members flourish our customers flourish and our investors flourish. You can expand that circle to include your suppliers, who you are trading with, and to the communities that you do business in that are in a sense are tied into this prosperity circle. A good metaphor I like is the spiral, which tends to move upwards, but it doesn’t move up in a straight line. It moves up where it loops back on itself, so sometimes you take a step backwards, but then you take four steps upward.
A company does not need to sacrifice purpose to achieve profit. Synergy among stakeholders is a win, win, win, win strategy. When team members flourish, customers and investors also flourish.
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