From Fast Company December 2009
By: Danielle SacksJohn Mackey, the Libertarian CEO of
Whole Foods, says not to worry: Capitalism and the invisible hand will cure the
world's ills. But isn't it a little late to start believing in magic?
These days, Mackey finds himself in
the role of accidental prophet. "Pioneers are the ones who have to hack
through a jungle and create a road," he tells me, offering an allegory for
his Conscious Capitalist quest. "The only thing that frustrates me
sometimes," he adds, "is that I feel like I've been hacking away with
a machete in the jungle for the last 30 years, and sometimes people come up and
say, 'Man, this is as far as you've gotten? You should have done more.' "
But the way Mackey sees it, Whole
Foods has already left the world in better shape than he found it. "If I
get run over by a truck later today, I will have already in my life made a
difference in helping many people," he says. "Customers are better
off because millions of people are eating in a way they never would have had we
never existed. Our team members are better off because we've created a company
that's a great place to work. Our suppliers have flourished along with Whole
Foods and have made a lot of money from their association with us. And our
investors have made a ton of money."
For those companies aspiring to become Conscious Capitalists, Mackey says there
are four ways to get there. They can pursue one of four ideals -- the good, the
true, the beautiful, or the heroic -- or any of them in combination.
"Plato said the good, the true, and the beautiful, and I added on the
heroic," he allows. Indeed, Mackey has always considered himself a
philosopher in the making, once telling Time that if his ex-girlfriend had
never persuaded him to launch Whole Foods, "I'd probably be in an attic
somewhere scribbling off insane philosophies that nobody reads." The
pursuit of any of these shiny goals, he says -- harmonized with the needs of
all a company's many stakeholders -- will deliver the enterprise to a Conscious
Capitalist state of perfection.
Yet Mackey's interpretation of what
constitutes higher purpose can be perplexing. He singles out Nordstrom and
Southwest Airlines (for their deeper pursuit of great customer service, or
"the good") and Four Seasons Hotels and Berkshire Hathaway (for their
obsession with perfection, "the beautiful") as examples of companies
that have attained an ideal state. "Do you know what Southwest Airlines'
stock symbol is?" Mackey asks me, busting to spill the punch line.
"It's L-U-V, love! Think about the businesses you most admire in the
world. You'll find almost all of them are pursuing one of those deeper
passions."
Another of Mackey's Conscious
Capitalist exemplars is the Container Store. "Our purpose is to organize
people's lives to save them space and time. There's a certain Zen quality to
being organized," says Kip Tindell, CEO and cofounder, noting that the
company's other deeper purpose is "to be the best retail store in
America." Ever since Mackey turned Tindell on to the Conscious Capitalism
model, the purveyor of plastic tubs says he's seen the light. "Capitalism
has a bad public image," Tindell says. "Socialism doesn't work,
communism doesn't work -- this [capitalism] is the winner. It just needs to be
modified a bit, practiced in a way that isn't so mercenary."
Tindell, says Mackey, is a pursuer
of the good. And indeed, the Container Store pays its employees very well --
some 50% above industry average. But he doesn't seem overly concerned with the
"holistic" attention to all stakeholders that purports to be at the
center of Conscious Capitalism. When I ask Tindell what he meant by the
Container Store being a "sustainable business," he replies, "The
business will endure long after I'm gone." The retailer's obligation to
the earth -- arguably a critical stakeholder -- consists of little more than a
corporate-recycling program. Meanwhile, the environmental policy on the
company's Web site borders on parody: "A commitment to sustainability
includes having salespeople who anticipate customers' needs so they get everything
they need in a single trip to the store." At the same time, Tindell (who
recently joined Whole Foods' board and is hosting a Conscious Capitalism Summit
next year) is not shy about the financial rewards of his message: "We're
not just a couple of altruistic guys espousing nice views; this stuff really
works. If all you wanted to do was make as much money as possible, as fast as
possible, this is the way to do that."
In Mackey's eyes, Whole Foods itself pursues both the good and the heroic. And the nation's largest seller of natural and organic foods does boast many noble practices: Nonexecutive employees hold 96% of the company's stock options; 5% of the company's after-tax profits are given to charity every year; no executive can make more than 19 times the employee average; and after much criticism from activists, it has shunned purchasing meat from factory farms. "The rule is not conflict of interests -- it's harmony of interests," says Mackey, who reduced his salary to a dollar in 2007 (he still owns about $36 million in stock). "The leader needs to manage the enterprise in a way that you're creating synergies rather than trade-offs -- that's the art of conscious leadership."
Read the rest @ Fast Company
