I know, my title begs comparison with so many other great companies: Google and Facebook come to mind in the US, along with many others around the world, like BMW. But I think Whole Foods has them beat. It’s all about….
We have to start here because there is nothing else which even comes close in importance. Lets quickly define culture as “the way we do things around here”, and the way that Whole Foods does things, as well as how it does them, is extraordinary. Its so easy to make statements about “what a great company we are, how we believe this or that”….but to really live those statements, well that’s quite a different thing. Whole Foods, more than any company I know, lives its culture more openly and honestly. Let me give you some examples:
John Mackey, Founder and Co-CEO of Whole Foods Market (WFM), decided some time ago that the pay of executives in the company had to be capped in relation to what others there were paid. He sets that ratio at 19:1. Bear in mind that in the US, this ratio among the largest 500 companies is between 450-500:1, depending on your source. So this is no small difference, its a giant chasm. Mackey says that WFM has never lost anyone because of this. This is because great executives work for more than pay, and anyone who doesn’t would not have been hired in the first place. Now why does this all matter? Shouldn’t we just say that an executive deserves all that he/she can get? No and for two reasons: first because most of these big pay packages are not related to performance. CEOs often get paid regardless of how shareholders do, for example. Carly Fiorina, who is going to run for President in 2016, drove the HP stock price down 60% during her time as CEO, yet received a giant $40 million plus severance package when she was forced out. Secondly, I don’t have the data to prove it but if your pay is 500 times mine I am not going to think too highly of you, especially when you get on the Intranet with a message for me and my fellow “team members” that “we’re all in this together”. No we’re not!! You are on another planet….the one with golden rings around it.
Caring About Customers and Workers First, Not “Shareholder Value”:
Whole Foods’ values are easily seen in each store; often hanging on circular signs near the cash registers. They begin with customers at #1, then talk about having happy employees, at #2….profits don’t come till #3. How refreshing, nothing about shareholder value until the customers and workers are taken care of…..and yes that IS what happens to them. Mackey and his team make sure that workers have decent pay and health care and have done so long before government forced all to do this. I do not go there all the time, but when I do I am treated extremely well as a customer. This is my field, my radar is tuned to unhappy workers (especially in places that say they want them to be happy) and WFM workers are friendly and helpful and knowledgeable. I have seen this at the flagship store in Austin, Texas, near to which I lived for a couple of years and in stores in California. Like most people, my radar can detect miserable, badly treated workers; that’s my job, and I see quite the opposite at Whole Foods. I see engaged workers. Customers first, employees second…then we can think about the shareholders after that: perfect. Without happy customers and workers, there is nothing generated for shareholders anyway, so if most of them thought about it, they would put themselves third as well.
Caring for the Environment:
It might seem like a small thing, but its not: Whole Foods banned plastic shopping bags long before individual cities and towns did in the US, and certainly long before the state of California attempted to do so……as yet unsuccessfully. Those bags often end up in the Pacific Ocean. Many don’t care, both companies and customers, but Whole Foods does. It sees itself as a citizen of a planet to which it wants to contribute something positive. So no plastic bags there, just a paper one for which you must pay, or your own resusable bag, please.
Companies like Wal-Mart are famous for “squeezing” suppliers. Whole Foods goes in another direction. Instead of making the most possible profit from overseas suppliers, for example, they subscribe to…and live by….so called Fair Trade principles. This means that those (often) subsistence farmers and growers can make at least a decent living by their local standards. This is a sustainable system, it is not one where one party to the deal squeezes the other one out of existence. Some might say that this is a luxury which only high end customers can afford to support. But Fair Trade goods do not necessarily drive up prices too much, and many less-than-wealthy customers are willing to pay a little more to know that they are affecting change in some remote part of the world where their coffee is grown. I know I am, and I am happy to be far from alone.
Delivering Healthy Food:
When I walk into a Whole Foods store I know that nothing there will be bad for me, in moderation of course! All kinds of dangerous additives and preservatives are banned, well beyond what authorities already ban. If you don’t like GMOs (I don’t care, to be honest) then even those will be gone soon and in any case all packages are labeled so you can make a choice. Again, this is not mandated in any state, but WFM does it. But even more than this, there is something else which makes my heart warm when I go to buy animal products:
Treatment of Animals:
Whole Foods has a 5 point credo when it comes to how animals are treated and they police their providers so that this happens. Eggs are not from caged chickens; pigs and other animals must have space, not the nightmare conditions in which many are raised. No antibiotics for chickens or anything else, no growth hormones. Compare that to going to some places and thinking, “I wonder if they really adhere to what they say they do”. I never think this at Whole Foods; I have studied them, written about them in a book, and I trust them. Its that simple. So my wife and I, who are not in the 1% elite by any means, and live on a modest budget, can go to WFM for certain things and buy with the confidence that our strongly pro-animal rights and healthy eating values are respected…all without breaking the bank.
Its a pretty amazing story for a bunch of hippies to found and grow the world’s biggest organic grocer from a single, tiny store in Austin, Texas. Something like that does not happen by chance. John Mackey and his team have done it with the power of their values and beliefs, which they translated into a culture that in turn created a place where people like to shop and others like to work. Its a sustainable and ethical approach where, best of all, everyone…everything…wins. Not just top management, but also the animals and the growers/farmers around the world. This company represents a refreshing face of capitalism which others would do well to emulate……and which future consumers will demand.
David’s two books (co-authored with Professor Sir Cary Cooper) on morale, engagement and culture in the workplace are titled Employee Morale: Driving Performance in Challenging Times and The High Engagement Work Culture: Balancing ME and WE and are available worldwide from Macmillan, Amazon, etc. in print and digital format. The second book featured an extensive analysis of Whole Foods Market, its culture and values. Visit David’s website for all things engagement, culture and emotional intelligence at work: www.davidbowlesphd.com