John Mackey, Whole Foods Market

FT

By Andrew Hill

June 28, 2013

Consciousness-raising: John Mackey believes Whole Foods Market proves business can help solve global problems

John Mackey blames Jean-Paul Sartre. As a philosophy student at the University of Texas in the 1970s, the co-founder of Whole Foods Market was obliged to read the French sage’s existentialist work Being and Nothingness: “It’s this massive tome, this great work and it is boring, boring, boring ... One night I just threw the book down and said I’m never going to read another book in my life I don’t want to read.”

He decided he would not take another class he did not want to take (he signed up for 120 hours of elective courses instead, finishing with no degree) and ultimately concluded: “I’m not going to ever do anything in my life again ... that isn’t speaking to my own sense of purpose.”

In his Patagonia-brand fleece, purple shirt and trainers, you might easily guess that 59-year-old Mr Mackey had devoted his hippy-era sense of purpose to three and a half decades running just the natural foods store he and his girlfriend set up in Austin, Texas, after college. But he went far further. That small store was the precursor to what is now a global network, still expanding, of nearly 350 shops – cornucopian temples, stuffed with a variety of carefully sourced and lovingly displayed produce – in the US, Canada and the UK, that employ 80,000 staff. An increasing amount of his energy is also feeding into “conscious capitalism”, a non-profit “movement”, in Mr Mackey’s words, to persuade businesses to adopt “a higher purpose” and create value for suppliers, staff and local communities, not just shareholders.

Critics, who include some devotees of the shops, find it hard to stomach the contradiction between a voraciously acquisitive and highly profitable Nasdaq-listed retailer with annual sales of $12bn and an idealistic philosophy that insists profit should be only one of several goals of business. But Mr Mackey insists “conscious” businesses grow faster, are more efficient and outperform their less self-aware peers because they foster greater loyalty among employees, suppliers and customers. In any case, he has long made clear that contradictions are part of his, and human, nature; and in person he comes across as both a visionary and a pragmatist.

On a visit to Whole Foods’ largest store, in London’s Kensington, he talks about “trying to do something that helps and contributes, so that humanity and this planet can continue to evolve in a constructive way”. But, in the same level Texan accent, he also grumbles, like any shopkeeper, about high rent and local business rates. He is a vegan whose shops sell meat; a strong advocate of staff welfare who opposes unionisation; and a vendor of expensive organic food whose latest venture is an outlet in recession-battered midtown Detroit. (It has lower prices, says Mr Mackey, and will fulfil Whole Foods’ intention “to help heal America”.) As for profits, he and co-author Raj Sisodia explain in their bookConscious Capitalism that they provide “the capital our world needs to innovate and progress – no profits, no progress”.

For Mr Mackey, size is a real asset in his quest. He reacts strongly to the suggestion companies such as Whole Foods risk losing their values as they get larger: “It’s not true: it’s the exact opposite. People that want to believe that do so because they think big corporations are evil . . . If you have a mental model that says big corporations are fundamentally greedy and selfish and exploitative, you don’t really want to have an exception to that model. It’s much easier to say, yes, Whole Foods has been corrupted. But the fact is, it’s exactly the opposite: we are more conscious as an organisation, we have a much more positive impact in the world today than we did 10 years ago.”

The CV

● Born: 1953, Houston, Texas
● Education: Studied philosophy and religion at University of Texas, Austin, and Trinity University
● Career: 1978 Launches Safer Way, a natural foods market, with his then girlfriend in Austin
1980 First Whole Foods Market opens 
1981 Community efforts save store from bankruptcy after devastating floods 1992 Takes Whole Foods public on Nasdaq 
2006 Cuts own salary to $1 annually
2009 Co-founds Conscious Capitalism Institute, later Conscious Capitalism Inc, with Raj Sisodia
2009 Resigns as chairman of Whole Foods, continuing as CEO, then co-CEO 
2013 Conscious Capitalism, by Mackey and Sisodia, is published
● Personal: Married to Deborah Morin since 1991
● Interests: “ultralight” hiking, reading, cooking, movies, basketball

At the same time, he hopes competitors seeking to mimic Whole Foods will evolve to adopt the same principles: “It’s competition that forces companies to get out of their complacency.”

Whole Foods has, however, become more complicated to run as it has grown. It is one reason it ap­pointed veteran Walter Robb – “an amazingly talented retailer” – as co-CEO in 2010. But Mr Mackey continues to have faith in the group’s decentralised structure: self-managed teams – a dozen in a big store such as Kensington – that “elect” new members by a two-thirds vote, share productivity gains and regulate behaviour within the team. The chances “something bad” will happen may have increased as the network has expanded, he says, but “it’s not contagious, it doesn’t infect the whole organisation. It’s not like a virus gets in there and the whole company can get sick”.

The devolved approach does not mean senior managers can abdicate responsibility. When a recent dispute over the rules applied to Spanish-speaking employees at the Albuquerque store in New Mexico – dealt with at local level initially – escalated, Mr Robb stepped in to announce a top-down revision of the company’s language guidelines.

One of the greatest obstacles in business, Mr Mackey says, is “a lack of consciousness in the leadership group” of global problems that business could help solve. As Whole Foods has grown, so has his self-awareness: “I’m more awake today than I was seven or eight years ago.”

He is also more sensitive to the risk of damaging the company by making what he calls “foolish statements”. His attack on President Barack Obama’s healthcare reforms, published in the Wall Street Journal in 2009, angered customers who supported the policy and prompt­ed a rash of interviews with him that he judged unsympathetic. The experience made him wary of both adulation and abuse. “When the stock price is up,” he says, “people do tend to think that I have a certain visionary flair ...but when the stock goes down I degenerate to [being seen as] the village idiot.”

For now, he is “having a blast”. But the lesson of the Sartre incident is that he may at some point “follow his heart”. His apparent weariness about occasionally rough treatment in the media and his enthusiasm for conscious capitalism suggest this time it will lead him away from the company and towards the movement.

It would be a wrench. Mr Mackey often describes himself as the father of Whole Foods. In his case, the metaphor may be more than a founder’s cliché. He admits that not having had children of his own is his only regret in life. Also, after Mr Mackey turned 40 in 1993, the Texan obliged his own father – his business mentor – to resign from Whole Foods’ board. “He was very hurt. He felt rejected,” he says now. “It was kind of the last thing my father was doing in the world that was really making a valuable contribution.”

. . .

Could Mr Mackey’s “child” also ultimately reject its parent? “It could happen,” he says. “It’s more likely I would make that decision than the board would, because the company’s doing so well financially and I don’t take any compensation [since 2006, he has been paid a symbolic $1 annual salary]. You don’t want to have an angry founder ... But it’s not unlikely [that] sometime in the next decade I will feel that it’s time for me to move on.”

Speaking about his father, Mr Mackey says: “One of the sad things about retiring is that you just become increasingly irrelevant. The world flows around you and you don’t seem to be impacting it any longer.” His clear desire to use the success of Whole Foods as a platform to change capitalism suggests he is fiercely determined never to succumb to the same fate.