Section: The HBR Interview
HE’S BEEN A GROCER AND A CEO FOR 32 YEARS NOW. Lately, Whole Foods Market cofounder and co-CEO John Mackey, with his controversial utterances on health care reform and climate change, has been in the news as much for what he says as for what he sells. But in this edited interview with HBR’s Justin Fox, conducted in collaboration with the online video forum Big Think, Mackey talks about what makes a corporation run.
HBR: You recently announced that you were committed to staying at Whole Foods Market for another 10 years. What brought that on?
Mackey: The announcement came when we made the decision to promote Walter Robb to co-CEO. That, combined with the fact that I stopped being the chairman of the board in December 2009, led to speculation that I might be leaving the company. So I thought it was important to announce that I’m not phasing out.
You had thought about having three co-CEOs.
Yes, because we function
as equals on our team. People make the same compensation, except for me – I donate it all. We tend to make decisions by consensus. We don’t have a three-to-two vote. It’s not the Supreme Court trying to work things out. We really want to reach consensus, and we respect each other. In a sense we could have had five co-CEOs. But A. C. Gallo and Walter Robb were the copresidents and co-COOs, so we decided that Walter would take the title of co-CEO and A. C. would be the sole president and chief operating officer. That seemed to make everybody happy.
Has this emphasis on consensus been there from the very beginning, or has it evolved over the years?
It has evolved over the years. I found that when you make decisions by consensus, and you let all the disagreements get expressed, you make better decisions. If you don’t do that, there is a natural human tendency on the part of whoever didn’t get their way to want to be proved right. It’s like “See, I told you that wasn’t going to work.”
Does it sometimes take a long time to reach consensus?
It can. Generally, if you’re making decisions that really are going to impact the business, it’s good to talk them over. It’s a little bit like Japanese management decision making – they spend a lot more time trying to develop consensus in the decision group. The virtue of it is that although it takes longer to make the decision, implementation goes a lot faster, because there isn’t resistance or sabotage that works its way through the organization.
What you call conscious capitalism – is that part of it, or is that just a management style?
That is a management style.
What is conscious capitalism?
First, you have to understand the basic principles that help capitalism flourish. One is property rights. You need the ability to trade your property, and to trade it to pretty much whomever you want. Another is the rule of law – laws and regulations that are well understood so that you can factor them into your business decisions. The rule of law has to be applied equally to everyone. For example, if Whole Foods goes into a city and is told our cheese has to be refrigerated, it’s fundamentally unjust if that rule isn’t applied to our competitors as well – which, I might add, does sometimes happen in New York City. You also need to have conscious businesses – that is, businesses that become conscious of their higher purpose, which is not just about maximizing profits and shareholder value.