Whole Foods CEO calls for new approach

For John Mackey, chief executive officer of Whole Foods, companies should focus not on boosting profits but on finding a deeper purpose.

Mackey, who delivered two public addresses Tuesday, argued that the most successful form of capitalism is what he called “conscious capitalism,” an attitude he said Whole Foods has attempted to espouse in its business dealings. Those seeking profits — like those seeking happiness — will find that both profits and happiness come only out of a larger search for purpose.

Whole Foods CEO John Mackey argues that retailers should practice “conscious capitalism” when executing business plans.
Snigdha Sur
Whole Foods CEO John Mackey argues that retailers should practice “conscious capitalism” when executing business plans.

“I want us to evolve from the profit focus to the purpose focus, from the short term to the long term,” Mackey said.

Mackey’s first talk — delivered in front of a packed General Motors Room in Horchow Hall, along with two overflow TV rooms across the street — focused on the connection between profits and purpose, which he explained using the metaphor of happiness.

Mackey argued that those who single-mindedly pursue happiness tend to be narcissistic and self-involved, while those who pursue something about which they are passionate will wake up one day and find that they are happy.

“I’ve found that people who pursue happiness as a primary goal don’t achieve it,” Mackey said, “that in fact happiness is a by-product of other things, such as having a purpose, service to others, excellence, personal growth, friendship, generosity, compassion, forgiveness, love. And if we pursue those virtues, then one day we may grow up and find that we are very happy.”

And, he added, the pursuit of profits works in a similar way.

Whole Foods tries to embody this ideal of conscious capitalism, Mackey said, pointing to the company’s high standards for animal welfare, a microfinance program run by a segment of the company, the Whole Planet Foundation, and emphasis on the wellbeing of customers and employees.

Mackey said while he founded Whole Foods as a service to customers, the company’s mission seems to have evolved over time. In conversations with employees, he said, many have told him that they see Whole Foods as an agent to change and improve the world.

For Mackey, this disconnect between his initial vision for the company and the way others now see it is analogous to the evolving relationship between a parent and a child.

“Your parents have a vision for you, and for a while that influences you, and then you find our own way in life,” Mackey said. “Maybe that aligns with what your parents wanted, and maybe it doesn’t.”

The company aims to maintain a positive relationship with the environment, he said, describing Whole Foods as a “fictitious citizen” that must bear responsibility for actions that impact the wider community. Mackey said Whole Foods has “green mission” teams that consist of employees who make suggestions about how stores can be more environmentally sustainable.

But when confronted with some tough questions about Whole Foods’s policies, Mackey dodged the queries.

For example, when asked how he reconciles that his stores throw out their food products at the end of the day while there are starving people on the streets and soup kitchens that are empty, Mackey responded that Whole Foods does try to give canned food to food banks, but that the prepared food is not accepted.

The Hartford Courant reported Wednesday that Mackey said he anticipates a settlement soon on a Whole Foods merger with one of its formal rivals, Wild Oats Markets. The merger has been fought by federal regulators.

Ralph Klein, a visiting professor at the Yale Divinity School, called Mackey’s philosophy a “revolutionary approach to life.”

“Two things impressed me: one is the reform I need to do and the other is his business ethics and values,” Klein said.

Dan Pullman ’80 SOM ’87 added that not only was Mackey running a successful business, he also seemed to care about a range of significant social issues.

John Mackey has a blog on the Whole Foods Web site that keeps costumers and employees up-to-date on his ideas.

Comments

  • yale 09

    This is irresponsible corporate governorship.

    Whole Foods is owned by shareholders. Every cent that Whole Foods spends on charity should instead be returned to the shareholders in the form of dividends, or should be used for share buy backs which will raise the value of the stock.

    Whole Foods is an organic and speciality grocery store. They should at least spend profits to strengthen those aspects of their brand- not promoting social causes.

    There is no material difference between a stock company that spends money on charity and one that spends money on lavish Las Vegas conferences. Both are sinkholes in their owners'(shareholders) pockets.

    And I LOVE Whole Foods! WF and Trader Joe's are the best grocers out there.

  • yale '11

    In response to #1, this is highly commendable corporate governorship.

    Whole Foods is not just a organic and speciality grocery store, it is a large organization that impacts multiple stakeholders. In fact, it is a model for how we should begin the evolution of the U.S. corporate system. As scholars in the field of political science have emphasized, large corporations are increasingly sovereign over environmental and social governance issues. Firms impact communities, customers, suppliers, management, employees, and shareholders. Firms should they be legally accountable to these stakeholders. Before legal changes in the U.S. can be implemented, companies, such as Whole Foods, who act with foresight and responsibility should be commended and are being rewarded in the marketplace.

  • Yale 09

    @ yale '11,

    You are missing the point.

    Whole Foods is owned by shareholders and serves the interests of the shareholders.

    The goal should be capital preservation with long term growth in the share price while providing income in the form of dividends.

    Then shareholders can spend their money as they wish, supporting whatever pet causes and charities they desire.

  • Goldie '08

    No, Yale '09, you're missing the point.

    If public corporations, like Whole Foods, actually accounted for all the negative externalities they produce as a byproduct of existing and operating, there would be no profits or dividends to be paid out to shareholders.

  • j

    gosh, can we get one of these in new haven already!

    how about on broadway!

  • good news (sort of)

    Hey j:
    Our area is scheduled to get a Whole Foods in "Late 2009" right here:
    1650 Boston Post Road
    Milford, CT 06460 USA

    Of course Broadway would be nice too…

  • Yale 09

    @ Goldie:

    Negative externalities?

    Give up your seminar-jargon.

    Whole Foods operates solely by trade. It cannot force anyone's hand (unlike the government).

    In order to get supplies, it must pay their suppliers their desired price.

    In order to get customers, it must offer desirable goods at the desirable price.

    In order to raise capital, it must offer stock ownership to shareholders at desirable terms.

    Any negatives will be thoroughly measured and weighed by both sides of these transactions (and the many other transactions necessary for starting and running a business)

    Skip the Latin American seminars and take a microeconomics class.

  • WFMI

    Mackey has some good points, but get real. This is capitalism. He sounds like he's running a non-profit… Actually, he is running a non-profit!

  • Yale 11

    In response to Yale 09,
    please review your economics.

    "A 'negative externality' results when part of the cost of producing a good or service is born by a firm or household other than the producer or purchaser" - A Glossary of Political Economy Terms by Dr. Paul M. Johnson of Auburn University.

    When you say, "Any negatives will be thoroughly measured and weighed by both sides of these transactions," you seem to refer to the cost-benefit analysis that the parties involved in the economic decision consider when they trade. Sure, those decisions are part of all transactions. The people involved is this discussion are well aware of that.

    What Goldie referred to is something called negative EXTERNALITIES. This "is a cost or benefit arising from an economic transaction that falls on a third party and that is not taken into account by those who undertake the transaction." - D McTaggart, C Findlay & M Parkin, Economics , Addison Wesley Publishers Ltd, Sydney, 1992

    Whole Foods tries to mitigate the effects of its externalities through voluntary programs that address its effect on the communities in which it operates, the environment, and its employees.

    Please review your economics and do not apply introductory concepts inappropriately.

  • yaylie

    I sure miss Mackey's Yahoo Finance BBS posts…

  • j

    the one coming to the boston post road is not nearly close enough! i don't have a car! and i wouldn't want to drive that far anyways. bring one to chapel street!

  • suzy new haven

    Why can't there be a whole foods store in New Haven? It would get alot of buissness from the east as well as the shoreline. All wehave is that hole in a wall Edge of the Woods. New Haven Hasn't changed with the times.