John Mackey, the founder and joint CEO of America’s largest whole foods chain, called appropriately enough Whole Foods Market, sounds for all the world like an unrepentant diehard capitalist who came to believe that ‘business and capitalism, while not perfect, were both fundamentally good and ethical,’ as he told an interviewer last year.
But he also believes in ‘conscious capitalism’—the title of his best-selling business book written with Raj Sisodia (paperback, 2014)—and says that ‘economic freedom and entrepreneurship are the best ways to end poverty, increase prosperity, and evolve humanity upward.’ Conscious capitalism starts with a clearly articulated purpose for your business or organization–its contribution to society–other than just making a profit. Conscious capitalism also defines your relationship of care towards all your stakeholders, starting with your workforce. Whole Foods Market, a $13 billion Fortune 500-listed company, calls all its staff ‘team members’ in its 373 stores.
The company is organized into thousands of self-managing, interlocking teams, from entry roles to the most senior levels. Employees are hired not just for their expertise, which can be learnt through training once hired, but also for ‘their care and trust’, says the company’s Mid Atlantic Regional President, Scott Allshouse. He was addressing an audience of marketing executives at the University of Richmond, VA, which I attended recently. Last year, Greenpeace scored Whole Foods Market No 1 on its sea foods sustainability score card, Allshouse said.
The company encourages healthy eating in US schools, supplying 3,388 school salad bars and helping teachers by supporting healthy eating education. In three years the company had supplied food to 2,700,000 students, Allshouse said. For this and other achievements, John Mackey was listed number 26 on the list of the 100 most influential people for business ethics in 2012, according to Ethisphere magazine.
The company launched the Whole Planet Foundation which gives microcredit grants in order to tackle poverty in 59 developing countries. It has also launched the Whole Cities Foundation, a non-profit organization ‘dedicated to supporting efforts that bring fresh, nutritious food and broader access to healthy eating education to under-served communities.’ In Detroit, for instance, it found that life expectancy is 12 years lower than outside the city. Whole Foods Market opened a store in one of the city’s depressed neighbourhoods and found that it was selling ‘twice the volume than we anticipated’, Allshouse claimed. This is surprising as its products are considered expensive by many customers, who see the company as catering to the well-off. In Broad Street, New Orleans, the sales volume was 2.8 times what was anticipated.
Conscious capitalism dictates that ‘making money is not an end’ so much as ‘doing good, doing the right thing’, Allshouse insisted. Conscious capitalism called businesses to a higher purpose: ‘purpose maximization’ rather than profit maximisation, as he put it. The need was for ‘firms of endearment’. Quoting Gandhi’s dictum that we all needed to ‘be the change we want to see’, Allshouse said that the best companies needed emotional intelligence, systems intelligence, analytical intelligence and spiritual intelligence.
Whole Foods Market was, Allshouse said, a ‘tactile’ company: an acronym which stands for trust, accountability caring, transparency, integrity, loyalty and egalitarianism. Above all, do not lapse on integrity, he said, which was measured by ‘what you do when no one is looking.’ He quoted the company’s mission statement which includes such words as ‘courage, integrity, love, responsibility, flourish, celebrating, love and joy’.
The aim is to expand the number of stores to 1,200 in the USA and worldwide. This is fine, so long as the purpose, in the spirit of conscious capitalism, is to meet human need, in WFM’s case for healthy eating, rather than just to increase profits. But the challenge is how…. Currently World Foods Market uses the standard US model of social enterprise, which links social purpose to conventional capitalism. But perhaps the future for ethical businesses such as WFM is neither in just conscious capitalism nor socialism but in a model of cooperation that shares risks, benefits, profits and values fairly with everyone who has a stake in a better society; to move beyond just trading ethically to an ethic of trading justly. As Bob Dylan famously sung: ‘The times they are a-changing’.
‘Team members’ are not the same as owners and the company is not an employee share ownership brand, unlike the much smaller San Francisco worker-owned cooperative Rainbow Grocery, or its namesake the Rainbow organic foods cooperative in Jackson, Mississippi. Or, indeed, the Waitrose grocery chain in the UK, owned by the John Lewis Partnership, where all the employees are owner partners. Employee owned companies still need the best management practices. But the Waitrose model could be one for Whole Foods Market to follow. It is surprising that the book makes no mention of employee share ownership companies, other than offering stock options to staff or team members.
Meanwhile Allshouse poses the question: ‘Can you build a company on love?’ for all its stakeholders and affirms: ‘I think you can.’ Whole Foods Market seems to be trying.
This article was submitted by Michael Smith.
Mike is Head of Business Programmes at Initiatives of Change UK.
Mike has worked with IofC since he was 19. He served for three years in India, 1971-74, on the production of the magazine Himmat, and has since visited India 12 times, reporting stories of industrial development for the Financial Times and other papers. Mike is the author of a book of stories of ethical business and social enterprise practice, Trust and Integrity in the Global Economy, and an earlier book called Beyond the Bottom Line. He is also the author of The Sound of Silence–how to find inspiration in the age of information which has been translated into several languages.