Whole Foods' John Mackey Is Out to Change American Business

John Mackey, the CEO of Whole Foods Market chain

A Whole Foods store, in some respects, is like John Mackey's mind turned inside out," a New Yorker magazine writer says in a 2010 profile. Mackey, CEO of the upscale, environmentally conscious Whole Foods Market chain, gave MBA students a glimpse into that mind and the philosophies that have shaped his $8 billion corporation.

But the man the New Yorker described as a free thinker, vegetarian, and "right-wing hippie," has loftier goals than getting Americans to eat healthy foods, one of the missions of his grocery empire. He is out to change American business as well, putting it on the path to higher consciousness.

"Why should the purpose of business be to make money?" he said. "When asked, a doctor doesn't say his purpose is to make money, but to rather heal people.

Did Bill Gates say his purpose was to make money? No, he had a vision that everyone should have a PC. "

A "conscious business" is one that subscribes not to the almighty dollar but to service to others, to striving for excellence, to fulfilling a higher purpose, and to changing and improving the world.

Yes, profits are important, Mackey told the audience Jan. 26, but they will occur "when they are not made the primary goal of the business."

As part of what he says is a holistic view of business, the enterprise is an "adaptive and self-organizing system creating value for its stakeholders."

Leaders should be a servant to the enterprise, "focusing on synergies, not tradeoffs."

A slide Mackey projected of the Whole Food organization wasn't a typical top-down chart but one with the company's core values and mission -- creating prosperity and health -- in the center, with team members (as employees are called), vendors, community and environmental responsibility, investors, and satisfied customers all spokes radiating out. Those values and stakeholders are Whole Foods' higher purpose.

But Mackey, of late, has found the media more interested in why he wrote an op-ed column in the Wall Street Journal last August opposing the Obama health care plan, when he promotes the fact that almost 90% of his employees get health insurance benefits.

The article stirred up a firestorm, upsetting liberals who viewed Whole Foods as a paragon of virtue, and Mackey as insincere. He told the Stanford audience he would take no questions about health care and said, "Anything you read about me is mostly bull."

But he did answer a pointed question about the recent controversial U.S. Supreme Court decision that ruled corporations may make unlimited contributions to political campaigns. "I do think it's an issue of freedom of speech and I'm happy about it; I don't think it will be all the negative things that people think," he said.

On the grocery front, Mackey acknowledged that Whole Foods has gone through growing pains about its identity, a year ago pulling much of the processed food such as potato chips from some of its stores. He said individual stores made the decisions, but indicated stocking more organic produce has been encouraged.

The company has made a greater commitment to its private label brands because so many "natural" food brands have been bought up by large food makers, he said.

An ongoing challenge, he said is to get suppliers to "deliver what they claim in their marketing materials." And although the stores sell meat -- he has said publicly that customers want it -- the company is requiring providers to get rated on how well they treat their animals.

This, he said, is an example of how Whole Foods walks the walk. It's not a good deed, either, he said. "It advances the core mission. It's not grafted on -- it's at our purpose, our center."

His talk was part of the student-organized View from the Top speaker series presented through the school's Center for Leadership Development and Research. 

This piece originally appeared in Stanford Business Insights from Stanford Graduate School of Business. To receive business ideas and insights from Stanford GSB click here: (To sign up : https://www.gsb.stanford.edu/insights/about/emails ) ]