Five take-aways from Whole Foods CEO John Mackey's surprising new book

John Mackey, co-author of the imperfect but stimulating new book, Conscious Capitalism, has a fascinating story.  As in, you might not expect an impassioned, full-throated defense of the free market to come from a guy who (as he describes it) grew up in “the counterculture movement of the late 1960s and 1970s,” studied “Eastern philosophy and religion,” lived in “an urban co-op/commune,” was “a member of three separate food-co-ops” because he believed “the co-op movement was the best way to reform capitalism because it was based on cooperation instead of competition,” and initially “embraced the ideology that corporations were essentially evil.”

Yet, like others before him (see this celebrated 2008 op-ed by David Mamet, and this recent Alec Baldwin interview of David Brooks), John Mackey would find himself “disillusioned” (a sentiment I can readily understand).  In the co-op movement, Mackey writes:

“There seemed little room for entrepreneurial creativity; virtually every decision was politicized.  The most politically active members controlled the co-op with the own personal agendas, and much more energy was focused on deciding which companies to boycott than on how to improve the quality of products and services for customers.  I thought I could create a better store than any of the co-ops I belonged to, and decided to become an entrepreneur to prove it.”

This lead Mackey to found a small natural food store called “Safer-Way,” which ultimately became Whole Foods.  You may have heard of it.

As Mackey and co-author Rajendra Sisodia describe it, “conscious capitalism” is “a way of thinking about business that is more conscious of its higher purpose, its impacts on the world, and the relationships it has with its various constituencies and stakeholders.  It reflects a deeper consciousness about why businesses exist and how they can create more value.”

In their view, business exists to change the world, to pursue a higher purpose; as Mackey told (a skeptical) Milton Friedman (a hero of Mackey’s), “Making high profits is the means to the end of fulfilling Whole Foods’ core business mission.  We want to improve the health and well-being of everyone on the planet through higher-quality foods and better nutrition, and we can’t fulfill this mission unless we are highly profitable.”

This sense of mission — of needing to, and being able to change the world, of being in the arena and not in the stands — is exactly what attracted me to the business world as well.

I certainly don’t agree with everything Mackey and co-author Rajendra Sisodia write or represent: they might do well to weigh Mark Lynas’s reconsidered perspective on GMO’s, for instance.  And even as I applaud their emphasis on prevention and healthy eating, I question some of the health assertions they make, and at the very least, I suspect the subject of “what is the healthiest diet” is far from settled science.

Perhaps more disappointing: while Mackey seems very sensitive to anti-business animus and unbalanced media portrayals, at least when it comes to him, he appears to have little trouble jumping on this same bandwagon, and offering up (both in the book and in interviews) a fairly trite, self-serving, and not especially informed critique of the pharmaceutical industry, on the intellectual level of “Natural Cures ‘They’ Don’t Want You To Know About.”  For a leader who writes about the importance of thinking broadly and inclusively, he’s remarkably dismissive about the work of making new medicines – a pursuit that evidently lacks the nobility, impact, and higher purpose of, say,  shelving kale.

Despite these quibbles, Conscious Capitalism offers flashes of real wisdom; these are the five points with which I resonated the most:

(1)    Business isn’t evil

Mackey and Sisodia are appropriately enraged by the popular perception (not underrepresented, I’m guessing, in the Whole Foods crowd) that business is, at best, a necessary evil.  Much of this seems to emanate from what they describe as the “persistent myth claiming that the ultimate purpose of business is always to maximize profits for the investors.”   They argue that the true purpose of business “is to improve our lives and to create value for stakeholders,”  and contend, “Far from being a necessary evil (as it is often portrayed), free-enterprise capitalism is an extraordinarily powerful system for eliciting, harnessing, and multiplying human ingenuity and industry to create value for others.”

Mackey and Sisodia are especially on-target in their critique of the “false wall” they describe as separating the work of governments and non-profits – generally portrayed as “unselfish” and “good” – and of business, which is viewed as “greedy” and “bad.”   I’ve always found this characterization both grating and inaccurate (see here, here, here), and likely to inhibit rather than stimulate essential collaborative efforts between organizations in different domains.

(2)    Entrepreneurs are a heroic force for good

Entrepreneurship is effectively the religion of Silicon Valley; there is no higher calling here than the determination to go through walls in order to change the world (see here, here).

Mackey and Sisodia are strongly aligned with this vision.  “Entrepreneurs are the true heroes in a free-enterprise economy,” they write, “driving progress in business, society, and the world.  They solve problems by creatively envisioning different ways the world could and should be.  With their imagination, creativity, passion, and energy, they are the greatest creators of widespread change in the world.  They are able to see new possibilities and enrich the lives of others by creating things that never existed before.”

(3)    Job<Career<Calling

As I discussed in a recent post (and see this personal favorite as well), we can work solely because we need the money (job), or because we enjoy progressive levels of responsibility (career), or because it’s intensely meaningful to us (calling).

According to Mackey and Sisodia, a calling “offers us value and satisfaction beyond the paycheck.  It relates to something we are passionate about, something the world really needs.  We feel most alive, most ourselves, when we are doing that work.  Ultimately this is what we need to strive for, as team members and employers: that as many people as possible are engaged in work that feels like a calling.”

(4)    A systems view can uncover hidden synergies

Just as biology as a discipline is evolving towards a less atomized, more systems-based understanding of life, Mackey and Sisodia explicitly discuss the need to avoid the “analytical separation” of stakeholders, which they characterize as “a form of reductionism” that “ignores the relationship stakeholders have with the business and with each other.”

Mackey and Sisodia suggest that by having a shared,  long-term view of success, and valuing long-term relationships with each key stakeholder group, it’s possible to move from a situation where each stakeholder is motivated by short-term self-interest to a more concerted effort to identify unappreciated synergies — real opportunities for value creation, where the pie can be increased and everybody wins.

This argument echoes the key take-away of Malhotra and Bazerman’s wonderful “Negotiation Genius,” in which the authors persuasively demonstrate the hidden benefits of changing the mindset from transactional (focused on getting to a specific number in a deal, say) to value creation (where by adopting a more holistic view, you can discover opportunities for innovative, expansive solutions that turn out to be better for each party).

(5)    Decentralization is a virtue

As Mackey and Sisodia observe, “One of the reasons free-enterprise capitalism works better than any other economic system that’s ever been created – particularly better than governmental bureaucracies or command-and-control structures – is that is recognizes that the collective knowledge and intelligence in a society and in organizations are widely diffused….High performance organizations use approaches to management that tap into their collective intelligence.”

In highlighting the benefits of a decentralized approach, Mackey and Sisodia tap into three important concepts familiar to readers of this column: the benefits of open innovation (in the sense that all ideas don’t need to originate from HQ); the importance of customization (possible if decisions can be made locally rather than centrally); and the exceptional fragility of large monolithic structures, as Taleb eloquently highlights.

Closing Thoughts

Even if you don’t agree with all or most of Mackey and Sisodia’s arguments, their vision — essentially, startups for grownups — seems viscerally compelling, and describes the sort of enterprise that I suspect most would love to join.

If companies built around expensive leafy vegetables or color-coded file folders (Mackey and Sisodia are big fans of The Container Store) can elevate customers, team members, and investors, you have to believe employees in other businesses deserve, and should aspire to find similar satisfaction and meaning from their work as well.

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