199 Comments

Comments

John Mackey says ...
To Bob Jacklin, I think we are probably talking past one another and aren't understanding the other person. I encourage you to reread my blog on Conscious Capitalism for I do not think you fully understand what I am trying to say here. You seem to understand and appreciate my point about deeper business purpose, but not my equally important point about the interdependent relationship between all the various stakeholders: "If business owners/entrepreneurs begin to view their business as a complex and evolving interdependent system and manage their business more consciously for the well-being of all their major stakeholders while fulfilling their highest business purpose, then I believe that we would begin to see the hostility towards capitalism and business disappear around the world." Wal-Mart indeed has a deeper purpose--"Always Low Prices--Always!" and they obviously understand the importance of taking costs out of their supply chain to fulfill this purpose, but the business is not being managed in a conscious manner to create value for the other interdependent stakeholders such as their employees, their suppliers, or the local communities they do business in. IMO Wal-Mart (despite its commitment to low prices to its customers) is not an example of a "Conscious Business" because it isn't being managed to optimize the entire interdependent system that it participates in. At best Wal-Mart is trying to optimize well being for only 2 of its stakeholders--customers and stockholders. Wal-Mart's strategy of strictly focusing on low prices as its only pupose has worked wonderfully well for them over most of the past 40 years, but today, in our increasingly transparent world, the flaws in this business strategy are beginning to become very apparent. Negative feedback loops have been created which are beginning to really hurt Wal-Mart. Despite their lower prices for their customers, their lack of genuine care towards their employees is now resulting in massive union attacks and various legislative efforts to force reform upon them (especially in health care). Various community activist groups organize to prevent Wal-Mart from opening in markets all around the United States. In addition, many, many suppliers voluntarily choose not to sell to Wal-Mart based on Wal-Mart's tendency to continually use their dominant market position to extract additional price concessions from the suppliers each year or lose the business. All these negative feedback loops are beginning to negatively impact Wal-Mart's business as their same store sales have dropped down to less than 2% in recent quarters. In fact, in the most recent month they actually reported negative same store sales. Look at Wal-Mart's stock chart over the past 5 years. You'll see that the stock is currently trading about 20% below what it was trading at 5 years ago. http://finance.yahoo.com/q/bc?s=WMT&t=5y&l=on&z=m&q=l&c= Things are not well right now in the Wal-Mart interdependent business system! Your argument for voluntary exchange at Wal-Mart is of course a valid argument. No one is actually forced to work there against their will (they aren't slaves) and the competitive market price system will always set the ultimate boundaries for employee pay. Any business which long ignores the competitive market price system will eventually go out of business. I'm not arguing for that. I am arguing, however, that Wal-Mart is a corporation that needs to rethink its ultimate purpose for existence and rethink its relationships to some of its key stakeholders--employees, suppliers, and communities. To its possible credit it may be rethinking its relationship to the environment as it has initiated some well publicized efforts to become more environmentally focused. So far, however, all its environmental efforts have been consistent with its primary business goal to take additional costs out of its cost structures to lower prices to customers and increase profits for its shareholders. It could be that their environmental commitment is no deeper than this and is simply being managed by the Public Relations firm they hired a couple of years ago to shore up their corporate reputation--"Greenwashing" in other words. Time will tell on this. If Wal-Mart's only purpose for existence is "Low Prices--Always Low Prices" and nothing more than this, then I predict it will increasingly struggle in the years ahead as our increasingly transparent world demands additional care and concern for employees, suppliers, communities, and the environment than Wal-Mart has historically provided. I encourage you to read "The Wal-Mart Effect" by Charles Fishman for a thoughtful and fairminded discussion of Wal-Mart. Your comments on my blog have made me realize that I haven't been clear enough in distilling exactly what I mean by "Conscious Capitalism". I will need to substantially rework my paper to make it more cogent before publication in my book. Here are the key principles for my version of Conscious Capititalism that I want to underscore: 1. Entrepreneurs create &/or discover the purpose of the business that they create--not economists, politicians, or lawyers. Entrepreneurs today are also entrepreneurs of meaning. 2. Every business has the potential for much deeper and more comprehensive purposes than only maximizing profits for investors. However, maximizing profits for investors is a legitimate purpose and not unethical--just narrow and uninspiring by itself. Great businesses have great purposes. 3. Machine/engineering/industrial metaphors are no longer the best metaphors to understand how a business or an economy really functions. Systems theory, Hayekian spontaneous order, and complexity science are better tools and metaphors for understanding both business and economics today. 4. The Paradox of Profits. Profits are maximized or optimized by not making them the the primary purpose of the business. They are a by-product of other things--deeper business purpose, customer satisfaction, employee motivation, successful innovations, superior business strategy, optimum systems leadership, competitive adaption/evolution, and many other factors. 5. Business leadership will be most successful over the long-term if it optimizes the entire interdependent business system and consciously creates value for all of the constituencies of the business. This will also maximize long-term profits for the investors as well. Optimizing the interdependent business system is not done blindly or arbitrarily, however, but is always done within the context of the larger economy which provides the necessary price information for leadership to make good decisions. The price system is a necessary tool for leadership to use, but not a God for them to obey. 6. The metaphor of citizenship is appropriate for business to use to understand what its appropriate relationship to the communities it operates in--local, national, global, and environmental. Citizenship entails certain responsibilities as well as privileges. 7. We increasingly live in a transparent world where everything we do is seen and communicated to everyone else who is interested. Transparency necessitates greater awareness and consciousness about all of our decisions and actions. Thank you, Bob, for the reading suggestions. I've read 10+ books by Thomas Sowell but not "The Quest for Cosmic Justice". I just ordered it. Sowell books I particular enjoyed include: "The Vision of the Annointed", "A Conflict of Visions", and his wonderful 3 book series including "Race and Culture", "Migrations and Cultures" and "Conquests and Cultures". Regarding Watchman Nee's "Spiritual Man"--I read these books 33 years ago when I was a practicing Christian. While Nee has some interesting insights about inner psychology I found these books obsessed with fears about "Satan" everywhere. They are no longer useful books for me personally as my personal spirituality has evolved in different directions. Since you are interested in Spirituality let me recommend a few of my favorite books in this category for you: "Essential Spirituality" by Roger Walsh, "A Path With Heart" by Jack Kornfield, and "A Course of Miracles" by The Foundation for Inner Peace. I found great spiritual value in all three of these books. I believe Ken Wilber is the most important philosopher living today in the terms of creating philosophical models which reconcile spirituality and science and giving us a firm foundation to move past mythologically based religions into authentic 21st century spirituality. I heartily recommend almost all of his books, especially--"A Theory of Everything", "The Marriage of Sense and Soul", and "Integral Spirituality". These are all good introductions to Wilber's ideas.
12/19/2006 10:49:11 AM CST
Tony Manasseri says ...
John- I applaud you thinking. I worked as a managing executive at a fortune 100 company for 35 years. This company was one of the greatest success and innovation stories ever. When we were profitable, our corporate attitude, and our culture I might add, were similar to yours. Our business model looked much like yours also. But just as Maslow outlined in his hierarchy of needs model, we started worrying about food, clothing and shelter (basic needs) as our profits shrunk. Our culture held tight but the competition was fierce, especially from the Japanese. Their goal was to put us out of business with an equal quality product but at a price our good people could not achieve. When this happened things turned ugly. Shareholders were demanding higher returns and could care less what good corporate citizens we were. I hope your model continues to produce favorable results, ours did for years. We even won the Baldridge Quality award several times but it failed to produce the revenue and profit we needed. The company is still around but I'm glad I'm retired. Tony
12/20/2006 9:13:02 PM CST
Lucy Palmer says ...
Hi John, I’ve really enjoyed reading your thoughts on conscious capitalism and noticing how the definition of that has expanded to mention spirituality and the interconnectedness of life. I was recommended to look at Whole Foods as an example of an organisation that is willing to seek ways of working that serve a higher purpose and yet are not seeking to be part of something that requires anyone to buy into their beliefs. It seems to me that you are offering an alternative model which demonstrates itself everyday through the existence of your business. It’s attractive to those who resonate with it, and for some the attraction is conscious, others don’t think about it they just keep choosing to work, shop or trade there. It occurred to me that over the years you will have evolved your thinking and conscious understanding of the business model you’ve created. I wondered how you shared that initially when you started the business and how you have managed any resistance or challenge to that approach along the way. As it became clearer, and is “the way things are done around here” I imagine that it becomes a self generating approach because the results exist and people can feel it’s different. There must have been times where the choices to cap salaries, or any of the other approaches you’ve adopted, seemed to fly in the face of the way people believed business should run in order to be successful. How have you supported yourself and others through these times? I am very interested in exploring ways of doing business that consciously recognise the movement of energy, the existence of universal laws and seeks to serve the bigger picture. I am in the process of gathering ideas and case studies that will support the creation of a book and study materials and I would really like to discuss this with you outside of your blog. I look forward to reading more. Although I am open to other approaches I recognise that I’m used to viewing the world of business in a particular way. Reading your book is challenging me to realise how many fixed beliefs I currently hold. Thank you Lucy Palmer (from Norwich, England)
12/21/2006 5:33:10 AM CST
John Mackey says ...
To Tony Manasseri, I empathize with your competitive business experience. It is obviously much easier to have an expansive view of the world when a business is successful and prospering than when competition is beating it in the marketplace. I don't know any of the particular facts about the business you worked for so I can't comment specifically about it. I will say, however, that Whole Foods doesn't lack for powerful and aggressive competitors, many of them much larger and better capitalized than we are. IMO competition should be viewed as an "ally" of the business because it is through competition that we are forced to get better--forced to reduce our costs, forced to innovate, and forced to create new value for our customers. Whole Foods success over the last several years has greatly increased the competition that we are facing and has caused us to accelerate our innovations, lower our prices, and discover new and better ways to better differentiate ourselves and to increase customer value. It isn't easy to do this and we are not permitted to "rest on our laurels" for very long. We have to get better, get cheaper, or get out--same as every other business. It is this driving quest for continuous improvement fueled by competition from other companies that is the true source of the dynamism of capitalism. To Lucy Palmer, I can't summarize 28+ years of business experience in a blog entry. You'll have to wait for my book to come out--hopefully finished in 2007 and in print in 2008. I will let you in on one little secret--we have figured it out as we went along. There was no "master plan". We started out with very simple and easily understood values and built the organization around those values. The complexity that exists today has self-evolved over the past 28+ years. One other little secret--we are still figuring it out as we go along. We are still discovering our deepest purposes and still learning, growing, and evolving. Each day brings new discoveries and dozens and dozens of new experiments throughout the company. Whole Foods is a grand adventure that I believe has still barely begun. We shall never cease from exploration And the end of all our exploring Will be to arrive where we started And know the place for the first time. T. S. Eliot
12/21/2006 3:40:20 PM CST
Tony Manasseri says ...
John- I agree with you that competition can be viewed as positive, it does cause us to become sharper than we might otherwise be. Another challenge of yours will be to communicate that to your people, in a way that they will embrace it like you have. What overtook us was the rate and velocity at which the competition came at us. That said, we were one of the few companies that were able to gain marketshare in the face of this stiff Japanese competition. It just took us a while. I don't think our senior leadership was as aware and knowledgeable as you seem to be. Later in my career I was involved with many successful change initiatives. If you are interested in knowing the formula we used I will be glad to share it. My only interest in doing this would be to help you succeed. I love your stores and employees and want them to be around a long time. So much so that I have given several free seminars on organics at your stores. Tony
12/23/2006 10:28:05 AM CST
Kajal Nanaiah says ...
I second the views of Thomas MacGowan and to Christopher Neal I would like to add that living on less than a $1 a day is not poverty, it is simplicity. Why should the way of life in wealthy nations be used as a yardstick for measuring poverty? If everybody could live on less than a dollar a day, it would be good for their souls and mother earth would smile! I live in the US, but am from India where a large percentage live on less than a $1 and if by your stats the level of poverty has reduced in India, it has definitely not made it a better place, in fact all the places I cherished growing up there have been turned into ugly meccas of capitalism and consumerism fueled by globalization. Having more to spend doesnt make the world a better place, living on less does and thats not something capitalists favor!
12/25/2006 2:05:47 PM CST
John Mackey says ...
To Tony Manesseri, My time is so scarce that I don't believe we can meet in person to talk over your ideas. I invite you to share your ideas by posting them on this blog. Thanks. To Kajal Nanaiah, Given the opportunity to materially better their lives and materially better the lives of their children most people in the world make the choice to do exactly this. Most people don't want to live on $1 or less per day and apparently neither do you, since you have chosen to live in the United States. Unless you are living homeless somewhere and eating out of trash dumpsters then I suspect you are spending more than $1 per day. How do you justify this? If you believe poverty (or if you prefer "simplicity") is a good thing, then why don't you voluntarily move back to India and live there on less than $1 per day? Any extra money you have you can give away to other poor people or donate it to The Whole Planet Foundation--www.wholeplanetfoundation.org. The Whole Planet Foundation is working with the Grameen Trust to end poverty throughout the world. We could use your money to loan to poor people through microcredit to help them climb out of poverty. I promise you that we don't loan any money to any poor women (100% of the loans are to women) who don't want to borrow the money. You might be surprised to discover that most really poor people don't like being poor and have powerful dreams to better their lives and the lives of their families. I believe in "voluntary simplicity" and personally follow that lifestyle myself. I believe each person must define what "voluntary simplicity" means for themselves and shouldn't try to coerce others to adopt their own particular lifestyle. For example, I believe that following a vegan diet and lifestyle minimizes one's environmental impact in many different ways, but I don't believe in trying to force my particular dietary choice onto other people. Each person must choose for themselves if they have the opportunity to do so.
12/26/2006 9:03:27 AM CST
Tony Manasseri says ...
John- This change formula came from Richard Beckhart at MIT. Change = PxVxCRxTPL __________ Resistance Change will occur when people are faced with or are able to see the Pressure that requires the change. You could also call this UN for understanding the need. Pressure is not always bad like shrinking market share, it could be that you are very successful in the current model but need to change to grow the business or to get ahead of a new trend. Once they understand the what and why of change they must have a clear understanding or Vision of where they are being asked to go. What will it look like? Example, I understand I have to loose weight because of my diabetes but how much? Next you have to describe the Current Reality. Example, how much do I weigh now so I understand about how far I have to go to get to my vision? How bad is our Current Reality, how did it come about? Last is a Transition Plan showing the incremental steps planned to get the organization towards the new Vision, and their role in its success. Each of these has a multiplier between them indicating that every one must be addressed or the change will not be successful. 100 times zero is still zero. All of this is underscored by Resistance. Resistance is normal and should not be viewed as something to defeat. People will go thru the stages of resistance, there are four, at their own pace. Normally, about 50% of the people in the organization will go willingly along with the change. These are the people who like change or have, “I want to please" personalities. Another 30% will show some stage of resistance and will be difficult to influence. Keep the 50% motivated while you work on the 20% in the middle who often need a little more information or are waiting to see if this is real. 70% is enough for a successful change initiative. Frequent communication and plan updates will keep the effort from "rainbowing" and differentiates it from the latest management brain fart. Tony
12/28/2006 7:13:47 PM CST
Ranjit Mathoda says ...
Hello Mr. Mackey. This is an interesting article, and poses an interesting contrast to the ideas of Milton Friedman, with which you appear to have some significant overlap, and some differences. Here's a few comments on your major points, which I hope may help you as you write your book. >1. Entrepreneurs create &/or discover the purpose of the business that they create--not economists, politicians, or lawyers. Entrepreneurs today are also entrepreneurs of meaning. I'm not sure if by entrepreneur you mean someone with an entrepreneurial spirit or a founder. I would argue that we all generate meaning by the acts and positions that we take. Sometimes we reinforce the meaning, sometimes we change it. Founders of a business often have significant potential to create the meaning of the business, but stewards of existing values or change agents who bring new values also change the meaning of a business. Also, I'd add that stakeholders make judgements on those meanings, and customers are the most significant judgement maker as to the meaning of a business; if the customer doesn't understand the values of a business organization, it may have to change. >2. Every business has the potential for much deeper and more comprehensive purposes than only maximizing profits for investors. However, maximizing profits for investors is a legitimate purpose and not unethical--just narrow and uninspiring by itself. Great businesses have great purposes. I'm not sure great businesses always have great purposes. But I can see that creating great meaning can help immesurably in bringing together the set of voluntary exchanges needed to create a coherent and effective organization. Certainly as customers in our modern world become more materially satisfied, they tend to look beyond just material satisfaction, to greater meaning, in their purchasing decisions. >3. Machine/engineering/industrial metaphors are no longer the best metaphors to understand how a business or an economy really functions. Systems theory, Hayekian spontaneous order, and complexity science are better tools and metaphors for understanding both business and economics today. I'm not sure that any particular set of metaphors is best. Probably having multiple metaphors at hand is the most critical. >4. The Paradox of Profits. Profits are maximized or optimized by not making them the the primary purpose of the business. They are a by-product of other things--deeper business purpose, customer satisfaction, employee motivation, successful innovations, superior business strategy, optimum systems leadership, competitive adaption/evolution, and many other factors. I think profits are maximized by solving a great unmet itch, and then figuring out a way to monetize the solution effectively. That's similar to what you said, but different. >5. Business leadership will be most successful over the long-term if it optimizes the entire interdependent business system and consciously creates value for all of the constituencies of the business. This will also maximize long-term profits for the investors as well. Optimizing the interdependent business system is not done blindly or arbitrarily, however, but is always done within the context of the larger economy which provides the necessary price information for leadership to make good decisions. The price system is a necessary tool for leadership to use, but not a God for them to obey. Agreed. >6. The metaphor of citizenship is appropriate for business to use to understand what its appropriate relationship to the communities it operates in--local, national, global, and environmental. Citizenship entails certain responsibilities as well as privileges. It is a useful metaphor, but it's also clear that sometimes companies under the guise of being good citizens engage in behavior that takes a particular point of view that may not match those of their owners. Owners can of course vote with their feet, either leaving or entering a stock of a business they believe in. But it is just as critical that corporate officers ponder whether a decision they make is actually for the benefit of the owners. If it increases the meaning that the whole organization or customers feel, that's probably not bad. But if it increases the personal meaning for the corporate officers, at the cost of company resources, without having real effect on the organization's interdependencies or on customers, then it is likely to be a waste of resources. >7. We increasingly live in a transparent world where everything we do is seen and communicated to everyone else who is interested. Transparency necessitates greater awareness and consciousness about all of our decisions and actions. Agreed. It's actually one of the big benefits of the information age that more scrutiny can be applied to all aspects of how things are done, if we care to apply it.
12/28/2006 8:21:06 PM CST
Charles Mukuka says ...
John, I know where you stand in regards to organic foods. Just wanted to see your reaction from the latest issue on the latest findings by the U.S. Food and Drug Administration that Milk and meat from cloned animals is safe to eat. And also on the same level how safe organic meats will be once cloned meats enter the food chain?
12/30/2006 3:41:59 PM CST
michael antczak says ...
John Mackey, I think first before one can answer the question, what is the purpose of business, one has to ask, what is the purpose of human species. It seems to me human species has the same purpose as every other species from bacteria to primates and that is to evolve. After 100 million years of evolution reptiles like alligators are equipped with teeth and guts that keep it going despite inhospitable conditions like draught, ice ages, human encroachment, egg eating mammals and meteorites. 100 million years has taught them a valuable lesson that being patience. Animals need water and when they come for water alligators keep motionless below the water line at the right moment tear limbs off unsuspecting creatures. A real master at survival. Science views mutations as random. Beneficial mutations will pass on to successive generations and unfavorable mutations will die along with less equipped bodies through natural selection. Random mutation it seems to me isn’t logical considering the exquisite speciality one observes in nature. Camouflage, intricate defense mechanisms, coloring, innate behavior, muscular structures designed for evasion or pursuit. I think there is likely a feedback mechanism from the environment back to DNA intelligence meaning mutation is not random but environmentally triggered. What is the trigger for future human evolution? I think humans are in a state of arrested development. Human species is ready for mutation. The earth is fully populated and it is time for us to scrap old systems and ways and move on. There may be two prominent forces at work influencing human development. One force is negative all together too pervasive and that force emanates from all existing organizations, bureaucracies, governments, parents, churches, in other words all conditioning forces existing in modern society. These institutions namely want one thing, to stick their ideology in your head and keep homosapien right where he is. One gives up youth, vitality and autonomy, getting little in return, paper money. What is the purpose of business? Whatever the owner wants it to be. Unfortunately most owners are primarily interested in money. In all probability CEO’s cannot define the purpose of their business once a company is public. Going public means a CEO is now controlled by Wall Street. But lets say you come across a high IQ visionary type CEO having enough confidence, brains and charisma to motivate its flock and appeal to single minded wall street types and a general public convinced they are making their own decisions but really are only selecting from a very limited number of choices offered by societies institutions. What might he do? If the purpose of a species to evolve then he might direct his business to that end. Our CEO having a background in many disciplines including Buddhism realizes consciousness is not a static thing rather a very dynamic thing that can be programmed and reprogrammed at will. Adepts having such capability can render any reality they wish. So our CEO wants his workers to undergo persistent brain change. He is changing the whole damn paradigm of business and society. He buys a 100,000 square mile parcel of land somewhere in Mexico (He is worth 50 billion). This space will house all workers and buildings. He builds a huge R&D center offering research capabilities from semi-conductors to outer space probes. Once complete he brings in the smartest scientists, programmers and engineers from around the world. His workers live rent free in 100 story buildings built for commune living. Workers own nothing but have access to everything they need. Schools are built serving kindergarden age children through college level. No grades are issued. Early schooling is geared to illicit creativity. College courses are geared to science, math, art, music and literature. All schooling is free. Cars are not used inside the community. Instead horses are used for personal transport. Workers have no possessions. They use any idle horse. Everyone is a vegetarian. No animals are killed for food. Many types of fruits, vegetables rice, dates, nuts are grown supplying enough nourishment for all. There is no use for money. All physical and spiritual needs are provided for. Our CEO tells his scientists and engineers he doesn’t want incremental change. He doesn’t want a better mousetrap. He wants quantum leaps in technology and invention. For example he tells his engineers he doesn’t want improvements made to the internal combustion engine, he was a new kind of engine. First task is to build a new car line. Cars are small and hydrogen powered with enough room for two. Cars however are designed to accept different body attachments. For example, somebody needing additional space whether it be space for passengers or cargo need only back up into the attachment module, press a button, and his two seat compact becomes a pickup truck or SUV or sedan. Modules are self-powered and conveniently available. When you no longer need the module you leave it at a dealer or Walmart or wherever. Warranty is 10 years 150,000 miles. Body design never changes. All engineering efforts go into functionality improvements. Once his cars substantially penetrate world markets new initiatives are undertaken. Engineers design heavy construction equipment using the same modular car concept. No longer do builders need very expensive specialized equipment for specialized tasks. A navigation module contains the brains and driver designed to connect up to all sorts of other task modules like digging modules, grading modules, lifting modules etc. Caterpillar and Volvo’s market share take a major hit dropping to number two and three respectively. Pharmaceutical drug development is another major initiative. Intelligence drugs are introduced for dirt cheap and the collective human genome begins producing homosapiens with better brains. Software engineers develop programs that create a brain computer feedback loop creating higher and higher brain functioning. Gone are emotional neurosis and general stupidity. Profits run 1 trillion dollars annually. No wages whatsoever are paid. Workers live, eat, socialize, work, do everything within the community. Every kind of animal runs free. All workers are guaranteed lifetime provisions. There are no laws and no police. There is no crime. All residents receive positive signals all day long. Music is played everywhere. Children run naked playfully chasing pheasant. Elephants immersed in large lagoons shoot water from their trunks. Eagles perch on window sills eating food out of a boys outstretched hand. Everything is in harmony with everything else. Classes are held in every kind of venue, along rivers, high in the mountains, around a midnight fire. Students learn ancient wisdom of China and India. They learn astrology and yoga from Indian masters. They learn magick from South American shamans. The stock price doubles every six months. All this effort is leading up to something really big, space travel for the average person. A space station is designed and built in space. In 2027 the station is ready for inhabitants. Ten people blast off every day destined for space living. There is indeed a trigger for human mutation and that trigger is zero gravity births. After several cosmic generations verbal language is thrown away like the club and spear. Communication is done by using telepathy. Bodies become small and light. Contact is made with other inhabitants of the universe. The human species finds its home at last.
01/01/2007 6:01:29 PM CST
Jennifer Davidson says ...
Dear Mr. Mackey, Congratulations on your tremendous success and signficant contributions. I have been reading Conscious Capitalism and have learned a great deal from what you have written, so much so, that I felt compelled to chime-in. My husband and I are small business owners who are proud to manufacture an organic product that is sold on the Whole Foods shelves in Austin. I wanted you to know that recently we were approached by Wal-Mart to sell our product to a significant number of their stores and we found ourselves faced with a making a major business decision. It was a 'moment of truth' so to speak for us and we had to pause and ask ourselves again what kind of company we wanted to be. We swallowed-hard and made the decision that we would not become a company that was in business just to make a buck. We felt good knowing that what we worked hard at all day stands for more than just economic prosperity and if we agreed to do business with Wal-Mart, we would be nothing more than sell-outs. We have adopted our own corporate causes, the biggest being, "Donate Life America" - due to someone in our own family being touched by the need for an organ transplant. After reading your essay, I am again excited and motivated about how even a small company like ours can use our business platform to give-back to our community in countless ways and educate consumers about important social issues. I applaud and thank you for this inspiration! I find your company and the people who work for it truly enthusiastic, gracious and a pleasure to work with. Every single person we have come in contact with on your team has been a true joy to work with and this is solid proof of the corporate culture of values you have created within Whole Foods. I wish you nothing but continued success and I genuniely hope that one day when I am demo-ing our product in your store you walk by so I can shake your hand. God's blessings to you and yours in 2007. Jennifer Davidson
01/03/2007 11:40:29 PM CST
Reuben Furly says ...
Again you make statements about animal welfare as one of your driving forces and yet your corporation continues to stock POM "Wonderful" despite that company's insistence on cruel and unnecessary animal testing, and despite the ready availability of alternative pomegranite drinks. How does this fit in with your stated animal welfare policies? I believe that WFM is actually POM's largest distributor, which means that you are directly responsible for the unnecessary suffering of untold lab animals. How on earth does this square with your drive toward "unlimited love for all people and even for other sentient creatures" - in short, to the paradigm of Conscious Capitalism that you claim to be exemplifying. To me, this is pure hypocracy; you need to either take this product off of your shelves immediately or stop the self-serving philosophical ramblings.
01/04/2007 10:15:08 AM CST
John Mackey says ...
To Tony Manasseri, Your comments about change pretty accurately reflect Whole Foods' own approach to implementing change and integrating any acquisitions we make into our company culture. Some of the ideas you share seem very similar to Robert Fritz's ideas in "The Path of Least Resistance." Thanks for sharing. To Ranjit, Thank you for your comments. Regarding Milton Friedman, I consider him one of the greatest economists of the 20th Century and a true champion of both freedom and prosperity. I met him a few times and had very interesting conversations with him. I admire him greatly. However, I do differ with his ideas regarding the social responsibility of business. I refer you to my first blog entry, "Rethinking the Social Responsibility of Business" where I engage in a debate with Milton and T.J. Rogers regarding the social responsibility of business. To Charles Mukuka, Whole Foods doesn't yet have any policies on cloned animals. However, we are discussing and debating it internally and will likely have an "official policy" to announce in the near future. I would also be very surprised if the Organic Standards Board allows cloned animals in their "official" definition of organic. To Michael Antczak, I don't pretend to know what the purpose of the human species is. I'm far from sure that our species actually has any transcendental purpose. I believe that purpose is determined from "within" not from "without," and that each individual must discover or create for him or herself what their own individual purpose is. Regarding who determines the purpose of a business I vigorously argue in my blog posting that it is the entrepreneur(s) who create a business not the owner(s) who invest capital that determine the original purpose of the business. Frequently these overlap, but not always. In the case of a publicly owned corporation such as Whole Foods where tens of thousands of people have invested capital (millions of people when the individual owners of mutual funds are included) it is impossible to know what each individual owner desires the purpose of the business to be. I won't repeat all the same arguments here again. In my opinion and in my own personal experience at Whole Foods it is the entrepreneurs who create the meaning and purpose of a business--not the investors of capital. To Jennifer Davidson, Thank you for producing quality organic products and thanks for your loyalty to Whole Foods. Our company is definitely interested in doing more business with local vendors and farmers such as you who don't want to sell their products to Wal-Mart and other mass market retailers. I hope your business flourishes. To Rueben Furly, I'm sorry you feel so angry and judgmental toward both Whole Foods and myself. 1. Whole Foods has had several discussions with POM regarding animal testing. In fact POM itself does not actually do any testing on animals, but they do fund animal testing on pomegranate juice since that is required by the federal government in order for them to make nutritional claims regarding the product. Such animal testing is usually intellectually justified as being a tradeoff between the good of people and the good of animals, with people being more important. I don't personally agree with this argument but that is currently the government's position on the matter. 2. Is Whole Foods POM's largest retail distributor? I don't know. Possibly. We are the largest retail outlet for most of the products that we sell. 3. Our company has no official policy at this time regarding animal testing of grocery products, dietary supplements, and most other products that we sell. We are having internal discussions and debates about whether to implement such a policy. No decisions have yet been reached internally to change company policies. Here is our official answer at this time to complaints such as yours: When determining whether a product meets our Quality Standards, we evaluate only the product being considered for sale within our stores. We look solely at the individual product in question and its ingredients. We do not include in our review any operational or management decisions of the company outside of the direct manufacture of the product in question. Most food ingredients have long since been proven safe for human consumption, and fortunately do not currently require animal testing. However, dietary supplements, and certain foods that are marketed for their nutrition and health benefits, do occasionally use the results of animal research to substantiate claims or support the safety of a new ingredient. While we do not encourage unnecessary animal research, we cannot guarantee that it has not been used by our supplement and food manufacturers. Household cleaning products and personal care products sold in our stores have been proven safe without the use of animal testing. We recognize that customers may have their own personal criteria for buying or not buying a product. Whole Foods Market provides the basic screen for ensuring our products are free of artificial ingredients: flavors, color, preservatives, sweeteners, as well as no hydrogenated fats. From there, we encourage each individual to make their own personal decisions incorporating any additional criteria that remains important to them when purchasing a product. For more information about a manufacturer’s policies, or to express your opinions directly to them, we suggest you contact them directly. 4. Whole Foods does sell hundreds, perhaps thousands, of products that result in significant harm to animals, including the death of the animal. All of our beef, pork, lamb, chicken, seafood, etc. result in the death of these animals. The great majority of the eggs and dairy products also involve considerable exploitation of the animals. These facts are true not only for Whole Foods Market but also for every food retailer of any size and scale in the entire world. Whole Foods is doing many things to lessen the pain and suffering of animals and to create viable commercial alternatives to animal factory farms that currently dominate almost all animal food production in the world today. I know of no other retail food company that is doing as much as Whole Foods is doing to try to lessen the suffering of animals. I challenge you to name even one other retail food company who has done as much as Whole Foods has done to try to help lessen animal pain and suffering. Can we do more? Sure. And we will. Wait and see. 5. It is important to make the intellectual distinction between "John Mackey" and "Whole Foods Market." They aren't the same thing. They are independent entities that have their own individual interests, identities, and destinies apart from one another. If you ever create an organization or a company that exists for many years you will perhaps discover this truth for yourself. I personally disagree with many of Whole Foods policies in terms of my own personal values. Whole Foods is an empowered community where many opinions, views, and values are expressed by many, many people (we have millions of customers, 43,000 team members, tens of thousands of suppliers, and millions of investors). We make the most important policy decisions of the company through a company leadership group of 24 leaders from around the company. I vigorously argue my viewpoints, but at the end of the day I am only 1 of 24 votes and I don't always win. As the C.E.O. can I "overrule" the decisions of our leadership team? Legally I can overrule them, but in reality I never do because to do so would be to undermine the empowerment culture that is primarily responsible for our success. No one of real intelligence or talent wants to work for a "dictator," no matter how well intentioned the dictator might be. I therefore support the decisions our leadership group collectively makes even when I disagree with them. Whole Foods will continue to follow its mission statement and to serve its multiple stakeholders into the future. Since the stakeholders have multiple interests and multiple desires it is quite simply impossible to satisfy everyone 100% of the time. We will always have some angry customers, team members, investors, suppliers, and communities who disagree with some of the actions and policies of the company. All the company can ultimately do is try to satisfy as many people as possible as frequently as possible--to seek win, win, win, win scenarios. If we do this well enough then the company will continue to flourish. 6. I follow a (near) vegan diet myself, eating only eggs from my own chickens because this dietary philosophy is consistent with my own personal values. These are not Whole Foods company values, however, and likely never will be. At this time about 7% of our customers define themselves as vegetarians and 3% as vegans (and these are much higher percentages than the United States population as a whole, where vegans number less than 1%). That is too small a population to build a successful food retailing business around. If you disagree, then go create your own food store and find out the hard way. I opened a vegetarian food store back in 1978 called Safer Way before I opened Whole Foods Market. It was just 3,000 sq. ft. and it wasn't financially successful. Whole Foods was/is successful because we built the business around what our customers wanted--the highest quality natural and organic foods available, including animal products--instead of my personal dietary philosophy. On my own life path I've concluded that life is full of compromises and tradeoffs as we move through a world of infinite possibilities and infinite complexity. It is easy enough to be "pure" if you are willing to create nothing of substantive value. Real progress (both individual and societal) does happen, but it happens over time and it tends to move in an upward spiral instead of in a straight line. 7. Ultimately if you disagree with Whole Foods or don't like us then you have the free choice about whether to trade with us. Many, many people in fact don't like us for a multiplicity of reasons and don't trade with us. You are free to do this as well. If you don't like POM then don't buy their products. If you don't like Whole Foods then don't shop there (or work there or buy the stock or read my blog). 8. It is the easiest thing in the world to criticize and judge other people. What is much harder to do is to actually create something that makes a real difference. I admit to being far more impressed and influenced by people who go out into the world and actually create something that helps people (and animals) instead of merely criticizing other people for not doing enough. I personally admire entrepreneurs much more than I admire activists. Entrepreneurs actually create things while activists usually just critize others and try to "bully" and "threaten" people to try to force the world to conform to their personal values. I love Michelangelo's wonderful quote and will end this posting with it: "Criticize by Creating."
01/07/2007 1:34:39 PM CST
Jessica Bogart says ...
In recent weeks there have been several articles written in business publications and the like regarding Wal-Mart's interest in jumping on the organic bandwagon. I find it ironic that at the same time you recently posted a blog about headhunters wooing your executives, and staff to competitor's businesses. All I have to say is this - Don't let them John! Like a bucking bronco, you hang on to that saddle horn and ride it out! Anyone who has seen that Wal-Mart documentary knows that company certainly has no concept of "conscious capitalism". One other side note -I purchased Whole Foods stock 3 days after 9-11. Why? Because I realized in that moment that I too needed to have a bigger reason, than just making money. So thank you for giving the public an opportunity to invest in something meaningful...John, your company is helping to make this country better.
01/08/2007 9:05:53 AM CST
Ashley Hodge says ...
John Mackey, Thanks for your contributions. I found your ideas clear and your vision admirable. I wholeheartedly agree with your ideas. I have two questions: 1. Are you aware of some of the material that has been written by Gary Moore on Ethical Investing? Gary has written about John Templeton at length and how he became the most succesful mutual fund manager from 1954-1992. Templeton adhered to a philosophy of only buying companies that produced products beneficial for mankind and avoiding companies that preyed on human weakness. He outperformed the S&P 500 by 3% per year during that 38 year period after fees. 2. How much of your philosophy was shaped by your religious beliefs? You mentioned that you were a practicing Christian at one time. I am curious if your understanding of stewardship of resources came out of that or was developed later? To expand on that, my understanding of biblical revelation is that God gave Adam in the Garden of Eden a stewardship mandate in Genesis 1:28 to cultivate, grow, take dominion of the earth. The biblical story moves from God taking man from a Garden- Genesis- to a City- Revelation. I believe the point is that to the believer in biblical revelation, we are not to seek repristination- a return to the Garden. But rather progressive reformation- using the resources that God has entrusted to us to grow, cultivate and improve nature through conscious capitalism, technological innovation, etc... Did this understanding of stewardship shape your life philosophy? I really enjoy your thoughts because I believe they are entirely consistent with a biblical view of the world. I respect that you are a voracious reader as well. You have a lot of great things to share and it obviously comes from a mind and heart searching for wisdom. Best Regards, Ashley Hodge
01/08/2007 9:49:50 AM CST
Jeffrey Reel says ...
In reading your blog, I think of the adage: "sorry for the long letter, but I didn't have time to write a short one." I admit to only going a few pages into your blog because I found it overly simplistic and flat-out wrong. You write: "In a capitalistic market economy business is ultimately based on voluntary exchange; all the main constituencies of a business (such as customers, employees, suppliers, and investors) voluntarily exchange with the business to create value for themselves and for others. No constituency is coerced to exchange against their will. This voluntary exchange for mutual benefit is the ethical foundation of business (and capitalism). For example, if customers are unhappy with the prices, the services, or the selection of my business, Whole Foods Market, they are free to shop at another competitor... All the constituents therefore exchange voluntarily for mutual benefit, and they are free to exit the relationship whenever they wish." What is "voluntary" about the need for sustenance, electricity, energy to heat the home, health care? If I find my health care provider to be too expensive, I am free to go to another competitor? When was the last time you comparison shopped for health care for yourself? How about for the typical "consumer"? Way overly simplistic, and you use it to form the foundation of your written piece. I take nothing away from your achievement with Whole Foods, but cannot take this as serious economic theory.
01/08/2007 1:30:52 PM CST
Peter Chung says ...
I'd like to thank John for opening up an important issue facing our society. I wish you can build a strong global network. We can find many companies which agree with your vision and philosophy. We need a conscious, conscientious capitalism(CCC) movement to secure individual health and world peace. Thank you very much again. From Pusan, Korea.
01/08/2007 1:43:55 PM CST
gizelle says ...
Can Conscious Capitalism be used to stop Whole Foods from promoting a product that funds animal testing? POMs has been funding testing on animals and this cruelty is being supported by whole Foods by carrying this product. I thought I could trust Whole Foods with their Animal Compassionate Standards but I suppose it is just a gimmick to get away with supporting companies that are cruel to animals. Now I know I cannot trust the products that are sold at Whole Foods.
01/08/2007 6:19:42 PM CST
Nick Theodosis says ...
Mr. Mackey, You have been quoted asking this rhetorical question: “who has done more good for the planet, Mother Teresa or Bill Gates?” In light of the following article (provided below) recently posted by the LA Times, I would be curious to know how you can remain steadfast in your promotion of the inherent contradictions which are deeply seeded and undeniably obvious in the modern capitalist system, regardless of “conscious” considerations on the part of board members and CEO’s. Sincerely, Nick Theodosis http://www.latimes.com/news/nationworld/nation/la-na-gatesx07jan07,0,4205044,full.story?coll=la-home-headlines A TIMES INVESTIGATION January 7, 2007 Dark cloud over good works of Gates Foundation By Charles Piller, Edmund Sanders and Robyn Dixon, Times Staff Writers
01/08/2007 6:31:46 PM CST
John Mackey says ...
To Ashley Hodge, I am not familiar with Gary Moore, but I'm very familiar with John Templeton who I consider to be a "great man" who has done much good in the world. I admire him greatly. I also admire the Templeton Foundation, which is doing wonderful work. I think the Templeton Prizes are a great idea. I no longer think of myself as a "Christian" in the biblical sense although I'm a long time student of "A Course of Miracles" which is a form of mystical Christianity. However, I'm quite eclectic in my spiritual studies--Buddhism, Hinduism (Yoga primarily), Judaism, and Islam (Sufism primarily). I have also read quite widely in world ethical philosophy and that has influenced me a great deal. I have also found meditation, affirmations, visualization, holotropic breathwork, and prayer invaluable as spiritual disciplines for training the mind and opening the heart. To Jeffrey Reel, It is hard to respond in much detail to you since you only bothered to read a few pages of my writing before dismissing it as "overly simplistic and flat-out wrong." Both of these criticisms may or may not be true, but you certainly present no good ideas, evidence, or logic to support your viewpoint. The fact that you may need or want something doesn't give you any legal or ethical "right" to have it. No one owes you "sustenance, electricity, energy to heat the home, or health care." The world doesn't exist to take care of you. You will have to offer sufficient value to others in order to trade for those goods and services that you need to support your own life. Capitalism is ethical because you are not coerced to exchange against your will with any particular business alternative (except for governmental monopolies) and in a competitive capitalistic market system there are always alternatives to choose from. Your complaint would be valid only in the case where a monopoly existed and you had no competitive alternatives to choose from. Your example of health care is fallacious, partly because we are very, very far from having a competitive free market in health care, which is incredibly regulated and subsidized in numerous ways by various governments and bureaucracies, and partly because despite all these market interventions you still have a variety of health care choices, including many types of alternative health care. To Gizelle, I answered the POM criticisms a couple of days ago. Scroll back up to see my answer. To Nick Theodosis, It is beyond my scope or interest to defend Bill Gates, The Gates Foundation, or capitalism in general in my blog. I have read the critics such as Paul Hawken that the article refers to and I don't find their critiques very convincing. Capitalism isn't perfect (what is?), but on balance it has overall improved the state of humanity tremendously. In a previous posting here I recommended a few books to read to back up my claims as to the overall value that capitalism has had. Here they are again: Max Singer, "Passage to a Human World: The Dynamics of Creating Global Wealth"; Stephen Moore, "It's Getting Better All the Time: 100 Greatest Trends of the Last 100 Years"; David Landes, "The Wealth and Poverty of Nations: Why Some are so Rich and Some so Poor"; Nathan Rosenberg, "How the West Grew Rich: The Economic Transformation of the Industrial World." Of course many, many problems remain, but overall human progress is a historical fact which I believe a dispassionate study of long-term history makes very clear. None of the environmental problems in the world are intractable problems, but all are capable of being solved through entrepreneurial creativity and collective human resolve. The fact is that the environment has greatly improved in the United States over the past 100 years--the air and water are both much cleaner than they were 100 years ago, and total forests have grown by millions of acres. This is all well documented by Bjorn Lomborg in his book "The Skeptical Environmentalist." Of course many serious environmental problems remain to be solved (such as Global Warming), but we are capable of solving them and I believe we will do so. I will also say that I wasn't impressed with the article which engages in systematic misdirection and guilt by association. It is a hatchet job, plain and simple. Here is their argument in a nutshell: 1. The Gates Foundation invests its assets in corporations all over the world. 2. Some of these corporations are oil companies which produce oil in Nigeria and there are negative environmental and negative health impacts from that production. Therefore The Gates Foundation is responsible for these impacts. 3. Some of these corporations are pharmaceutical companies and they charge high prices for their drugs in poor countries. Therefore the Gates Foundation is responsible for this. The logic of this article is that the Gates Foundation is responsible for every negative thing that happens in every company that they invest in. Since corporations (and capitalism) are inherently evil, and the Gates Foundation invests in corporations, the Gates Foundation is also evil. If the Gates Foundation is responsible for all the "bad" things that the corporations they invest in do, then do they also get to take credit for all the "good" things that those corporations also do? After all the oil companies that the Gates Foundation invest in supply oil to the entire world and our entire modern civilization is today based on an oil economy. You might think our entire modern civilization is terrible, but I don't. Overall I think it is a very, very good thing and I shudder to think how much more poverty and suffering would exist in the world without oil or the oil companies to efficiently produce it. Since the Gates Foundation invests in pharmaceutical companies and those companies are developing cures for many of the diseases that plague us, then does the Gates Foundation get credit for those cures? IMO corporations, on balance, do far more good in the world than they do evil. Therefore on balance the Gates Foundation, by investing in those corporations, is slso doing far more good than evil. The article doesn't point this out. Why not? Because the article is neither balanced nor fair. As always the issues the article discusses are very complex and don't lend themselves to simple "morality plays" of "good guys" and "bad guys" or "good versus evil" thinking. A very good book to read which has a chapter dealing with ENI and Shell in Nigeria is "Empires of Profit" by Daniel Litvin. It portrays the complexities and difficulties of doing business in Nigeria. It is very balanced IMO. By the way, if Bill Gates and the Gates Foundation are guilty by association through their investments in various corporations who sometimes do negative things, then I must point out that by this logic Mother Theresa was also guilty of heinous crimes. After all, Mother Theresa was a nun in the Catholic Church. Is she therefore responsible for the Spanish Inquisition, various Catholic wars and assasinations, or more recently sexual child abuse by various priests. Is there a "Dark Cloud Over Mother Theresa" too? If not, then why not? The Catholic Church is guilty of numerous crimes and horrible human rights abuses and she was a nun with sacred vows to the Church. Isn't she therefore guilty? Doesn't this massive guilt far outweigh any good she did? (disclaimer here--I love and admire Mother Theresa who was clearly a wonderfully kind and loving person. The above comments about her and the Catholic Church are used as a form of satire only for rhetorical purposes. No direct criticism of her or the Catholic Church is intended). For that matter, aren't you a citizen of the United States? Do you pay taxes to the United States government? Does that therefore make you responsible for many thousands of deaths in Iraq? Is there also a "Dark Cloud Over Nick Theodosis?" My argument for "Conscious Capitalism" is that capitalism can be improved. Quite honestly there is no viable alternative to capitalism that doesn't involve some type of totalitarian government with massive losses of both human freedom and prosperity. The question isn't whether we'll have capitalism in the world or not, because we will. The question is whether we can evolve it or not to a higher level of consciousness. I think we can and I'm working to do exactly that. Let me finish by recommending Peter Barnes recent book, "Capitalism 3.0: The Next Stage of Capitalism (The Commons)." Barnes has a number of very interesting ideas here about ways we can evolve capitalism for the 21st century. I don't agree with all of his ideas, but some of them are flat out brilliant and deserve a wide audience and much discussion.
01/09/2007 4:56:45 PM CST
Bob Jacklin says ...
Mr. Mackey: Thank you for the reading recommendations. My 2007 reading list includes three of your suggestions. Perhaps a better understanding of your frame of reference will increase my understanding of your writings. Please consider an additional principle when writing Conscious Capitalism (cc): "An enlightened consumer is the cornerstone of successfully transitioning towards conscious capitalism." Rationale: As long as consumers see their purchases in the framework of lowest price or best personal economic value, the transition towards cc will be delayed, minimized, or never occur. The ability to undercut pricing by shortchanging various stakeholders (suppliers, employees, the community, etc) will allow others to successful compete and destroy (economically) those that would attempt to implement cc. Therefore an elightened consumer is necessary. Purchasing decisions made on a daily basis must be seen in a much broader framework that includes the goals envisioned by cc. Until buying is seen as a reflection of one's values, goals, and aspirations for the world this will not happen. This is a major challenge and successful transition might happen more rapidly in niche markets that serve customers that already share a strong value or belief. An enlightened consumer must have a broad view that desires fairness towards all stakeholders. This is diametrically opposed to out current economic model that spends untold millions on advertising that seeks to make the buying decision all about meeting the need of the individual. Best regards, Bob Jacklin
01/10/2007 2:07:08 PM CST
Dan Maffei says ...
I am a Team Member in the Meat Department of Whole Foods Market in San Rafael. I have been a Team Member for ten years there, as well as a stockholder due to Whole Foods Market granting me stock options. This is the best company I have ever worked for. The company atmosphere is very respectful, and this flows from the executives of the company on down. I am proud to work for a company where the chief executive officer regards conscious capitalism as an important aspect of running the business. I am also very proud to work for a company that is listed as among the ten best places to work in the United States in terms of how they treat their employees. I concur with the results of that poll, and think Whole Foods should actually be number one, instead of, I believe, number three.
01/10/2007 3:08:39 PM CST
Kajal Nanaiah says ...
Hi John, Thanks for taking the time to respond to my posting. Yes I agree with you, I should go back to India and live on less than a dollar a day and donate the extra. Unfortunately I have not found the courage to make such sweeping change and also enlightenent came a little late. It took coming to America to realize the problems of over consumption. To go back I would have to get divorced (my husband is american) and my child would grow up without a father. Every day I wake up and battle with this. But on the other hand I have made tremendous changes to my lifestyle and diet. Also I could live on less if whole foods would reduce its prices :) Best of luck.
01/11/2007 7:00:08 AM CST
John Mackey says ...
To Bob Jacklin, I think your insight about "enlightened consumers" is very valuable and important. Thanks for sharing and I will "upgrade" my chapter with this idea. However, I think for Conscious Capitalism to reach its highest potential it will also require "enlightened employees", "enlightened investors", "enlightened leadership and management", "enlightened suppliers", "enlightened media", "enlightened governments" and "enlightened communities", as well as "enlightened consumers". All are important. I agree with you that "enlightened consumers" are very, very important because "enlightened consumers" will create the demand for more "Conscious Businesses" and the growth of "Conscious Capitalism". To Dan Maffei, Thanks for your 10 years of service to our customers at San Rafael. I love your store too, which is one of my favorites. FYI--Whole Foods was ranked #5 by Fortune in its most recent list of "The 100 Best Companies to Work For", behind Google, Genentech, Wegman's, and the Container Store (all great companies). See you in the store. Take care. John
01/11/2007 7:47:50 AM CST

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