Keeping Our Executive Team Together For 10 More Years

By John Mackey, May 12, 2010  |  Meet the Blogger  |  More Posts by John Mackey

 

What is happening?

Walter Robb and I will now share the title of Co-Chief Executive Officer (Co-CEO), while A.C. Gallo will now have the title of President and Chief Operating Officer (the title he previously shared with Walter).  Walter will also join me as a voting member of our Board of Directors.

 

Why is this happening? The major goal in these decisions is to try to keep our very successful Executive Team (E-Team) together for at least another 10 years.  A.C., Walter, Glenda Chamberlain, Jim Sud, and I have been working very closely and effectively together as a team for almost 10 years.  Since we came together in January of 2001 as the E-Team, we have seen our total sales, profits, and stock price increase tremendously.  In addition, we are extremely proud to be one of only 13 companies to have been ranked on Fortune’s list of the "100 Best Companies to Work For" since the list’s inception. Our exceptional growth and success have been due to the collective hard work of many thousands of Team Members, as well as strong leadership throughout the company, but certainly the E-Team has contributed significantly to our collective success as well.  Here is a look at our company’s performance since this team has been together:

 

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Although I’ve been the only CEO of Whole Foods Market since I co-founded the company almost 32 years ago, my leadership style is both participatory and empowering.  Unlike many large companies, Whole Foods’ E-Team makes our most important decisions through consensus—we discuss and debate ideas and decisions until we can get agreement and buy-in from the entire E-Team.  My relationship with other members of the E-Team has always been one of mutual respect, trust, and equality.  Therefore in a very real sense, the job of CEO of Whole Foods Market has been collectively shared by all five of us for the past 10 years.  That is how we have led the company together.

 

I often say that I will stay with Whole Foods Market as long as I continue to enjoy it and have fun.  Between two and three years ago, however, most of my time was being spent talking to various lawyers as the company’s merger with Wild Oats was being challenged by the FTC and I was being investigated by the SEC for posting on Yahoo Financial Discussion Boards.  I was definitely not having any fun and I felt like I was simply wasting my time in non-constructive ways “defending” both Whole Foods and myself from these regulatory agencies.  During this time I was no longer able to focus my time creatively in ways to help the company grow and evolve, and it was very frustrating to watch Whole Foods suffer along with everyone else when the world economy fell into the deepest recession of my lifetime.

 

After a great deal of soul searching into some of my deepest passions about the purpose and meaning of my own life, I came to the conclusion about 18 months ago that continuing to help lead and evolve Whole Foods Market is exactly what I most want to do, and I recommitted to the company for the long term.  I have become especially excited about the potential to help improve the lives of millions of people through better education about the principles of really healthy eating and I’m helping lead these rapidly evolving efforts at Whole Foods Market.  We have many exciting healthy eating and wellness initiatives in development that I believe are really going to help people live healthier and more vital lives, and I look forward to sharing them with everyone during the next few years.

 

With this renewed sense of purpose about what Whole Foods Market can accomplish came the realization of how important it is to keep our leadership team together.  It would not be good for our company to lose anyone on the E-Team, especially A.C. or Walter, who are such remarkable retailers, extremely capable leaders and would both make excellent CEOs.  Their contributions to Whole Foods success have been immeasurable and neither has received the true credit publicly that they deserve.

 

As we discussed how to hold the E-Team together, three options stood out.  One option was for me to give up the CEO title, take on the Chairman of the Board title once again, and then promote A.C. and Walter to Co-CEOs of the company.   This was not pursued further since I had recommitted to the company and wanted to “step forward” into more leadership and responsibility, not backward.  In addition, we did not want to create a structure which would result in the company using resources to fight corporate governance activists seeking an independent chairman of the board, which by their definition excludes a former member of the company’s management team.

 

A second option considered was for both Walter and A.C. to join me as CEO.  This strategy had the advantage of more accurately reflecting to the outside world the reality of how the company is actually led, but would have likely created confusion for many people.  We aren’t aware of any other large company with three joint CEOs, and although Whole Foods Market is comfortable being unorthodox, we all agreed it would be simpler and more acceptable for A.C. to become President and Chief Operating Officer and Walter to become Co-CEO with me and join me as a voting member of the Board of Directors.

 

Who made this decision?

The idea to change our structure as a way to hold our E-Team together was mine.   We reached consensus on the best option as a team and then proposed it to our Board of Directors who unanimously approved it.

 

What will change?

Each member of the E-Team will be doing exactly what he or she was doing prior to the change and as a team we will continue our consensus style of management for major company decisions.  The only things that change are titles and that Walter will now join me as a voting member of the Board of Directors.  A.C., Glenda, and Jim will still attend and participate at Board meetings as non-voting members.

 

Am I giving up the CEO title?

No I am not.  Walter and I will now share the title as Co-CEOs.  Again, I’m more committed to our company than ever.

 

Is this change related to your giving up the Chairman’s title last December?

There is no connection between the two.   I am most definitely not interested in leaving the company or retiring!  As I discussed above, I am absolutely committed to Whole Foods and plan on continuing to help lead the company for many, many more years to come.  I am healthier, with more vitality right now than I had 20 years ago.  I won’t put a date or a range on when I will retire, but I promise you that it won’t be anytime in the near future.

 

Does this have anything to do with the Wall Street Journal op-ed I wrote last August?

 

No, not at all.  Again, this announcement is to recognize A.C. and Walter for their numerous contributions to our success and to keep our E-team together for many more years. It is not about me and there is no connection to last year’s op-ed. While I do regret the brief and unforeseen controversy the essay created for the company, it did not negatively impact our results. Actually, the opposite appears to be true since our sales, profits, and stock price have increased continuously since then.  Here’s a look at our comparable store sales growth and average stock price trends for the past four quarters since the op-ed ran:

 

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A few comments about Walter and A.C.:

While Walter’s and A.C.’s contributions to our company’s success are numerous and immeasurable, one of their most important joint accomplishments is the high level of voluntary collaboration they have fostered between our 12 regional leadership teams and the regions and Global Support.  I believe this was instrumental in our successfully managing through 2009, which was the most difficult time in our company’s 30+ year history.

 

I would like to highlight a few of the qualities I most appreciate about them. To start with they are the two most brilliant retailers that have ever worked for our company!  I don’t think many people realize just how fortunate Whole Foods Market has been to have two such extraordinary retailing geniuses working with the company at the same time.

 

Walter is one of the most intelligent, dedicated, capable, and caring people that I have ever known.  His passion for excellence and his drive and commitment to help Whole Foods Market continuously improve have been major reasons why the company has been so successful for so many years.  His unique and penetrating insights into what is really happening have helped everyone he works with to gain better perspectives and to make better decisions. Walter has more energy and gets more things done than a half dozen ordinary people combined.  He is simply an extraordinary man by virtually any measurement!  In all honesty, I’m a bit in awe of Walter.  It will be my honor and my privilege to share the CEO title and responsibilities with him.

 

Like Walter, A.C. is dedicated, capable, and caring, but he also combines these qualities with remarkable emotional and spiritual intelligence.  On the E-Team we have affectionately nicknamed him “The Buddha” because his calmness, uncanny good judgment, and wisdom have helped all of us become wiser and better people.  He is one of those rare individuals about whom we can truly say “silent waters run deep.”  A.C. doesn’t make quick, snap decisions, but rather thinks things carefully through considering virtually every possibility.  When he does make up his mind, however, one can be certain that his decision is almost always the correct one.  I have learned to trust his wisdom and insights in virtually all circumstances.  Whole Foods has benefitted in so many ways by this outstanding leader and I’m very happy that he is the President and Chief Operating Officer of our company.

 

Concluding Thoughts

Our second quarter for fiscal year 2010 was the best quarter we have reported in several years with extremely strong comparable store sales growth, earnings, and cash flow.  The evidence now appears to be conclusive that Whole Foods Market has successfully emerged from the two-year economic recession that enveloped the entire world.  Although the future is ultimately unknown, I believe there are many reasons to be optimistic about Whole Foods Market’s future growth potential.  Our new stores are performing very well, and we are in the process of rebuilding our pipeline of stores in development in anticipation of reaccelerating our square footage growth. I believe we have taken the appropriate steps to solidify our executive leadership team, and I’m very excited about working closely with this team for many years to come. I want to end this blog entry by thanking our 55,000 Team Members for the incredible job they do serving our customers and our company each and every day!  I am deeply grateful for their dedication and hard work which has allowed our company to flourish and become the remarkable company we are today.

 

Thank you.

 

8 Comments

Comments

Eddie Deen says ...
When I look at the fundamental makeup of Whole Foods, at the lowest common denominator, the underlying driving force behind the success is due to being better able to shift the self-interpretation of the employee to the highest value possible. Great self-interpretations creates an ability to see the world from a different and more effective position. Nothing destroys an organization as much as a collective negative self-interpretation. The greater a person can accept love, the greater that person can give love. When a customer purchase a product, they are not buying a product, they are buying a story, the benefit of the product. How does that product make you feel, such as smart, sophisticated, belonging, nurtured, or loved determines if you come back. Whole Foods is not in the business of selling products, but in the business to develop stories or urges and maintain those urges of feeling certain emotional connections. Only intrinsically motivated people can actually work for Whole Foods and create such a stage. The employees are best described as magicians, artist, where the magic doesn't happen in the store, but the magic happens in the consciousness of the customer. It is truly a beautiful thing to be able to set the stage to develop artist so that they can pass on their gifts. The source of a person's knowledge is their experiences, when customers come to Whole Foods, many are not aware of who is labeling their experiences, and thus the experience labels them, thus creating another urge to come back. Customers are not reacting to a product, they are reacting to the urge to continue the emotional connections that was establish by the first experience. If an employee makes you feel dumb for shopping at your location, then you would not go back. Generally most people become prey to their experiences, thus they are not reacting to the actual experience itself, but to the label or the interpretation that they put on the experience. The more positive the store experience, the greater the brain will want to go into survival mode, an uawareness state, which will create a stage where it will want to duplicate that experience. The race is on as to who can create the greatest magicians. Why is this? People are sharing their experiences on Facebook faster than there are intrinsically motivated people being developed to satisfy these wants for greater experiences. It will be interesting to watch how different industries self-organize. Will they follow Whole Foods, in regards to developing stories, a Quantum Physics understanding about their stores, or will they stay in Classical Physics and continue to sell products? Moving from Einstein's General Theory of Relativity thinking to Heisenberg's Quantum Mechanical thinking, or the Uncertainity Principle will be the test of who makes it or who doesn't.
05/23/2010 7:41:33 AM CDT
Zachary Burt says ...
Hi John, I recently reviewed your white paper on Conscious Capitalism and posted the summary on my blog, here: http://www.zacharyburt.com/2010/04/the-ceo-of-whole-foods-on-conscious-capitalism/. I think you might enjoy my acronym "C-GIVE" and you might also be able to point out any misconceptions I might have inadvertently construed. :) Cheers!!
05/24/2010 6:42:42 PM CDT
Peter Perley says ...
John, your Board, other Stakeholders, As much as you promote a great vision, core values and customer centric teamwork within Whole Foods, the true value of it in action is the random acts of kindness performed by your team. Today, in Oakville Ontario, a disadvantaged, wheelchair bound lady was at the coffee bar. She was not your typical well to do individual and was not only health challenged but appeared sad. She tried some tea, was unsure whether to purchase it.Your team member Shelagh, cam around the counter took time to make her feel better, and acquired how often she shopped at the store. The reply was every 2 months in a sad and energy-less tone, Shelagh took a box of tea and made it a complimentary memento of Whole Foods for the lady. I was simply blown away by this generous act of kindness and then I experienced Rose taking an excited, engaged group of kids through for chef camp. Unlike so many retailers, you create and captivate a customer experience which creates your sustainable revenue growth and a feeling of being valued as a customer, this is what creates the numbers. keep it up, and please give a pat on the back to the leadership and people like Erica, Therese, Stephen and you head cashiers, to name a few. Sincerely, Peter Perley
07/07/2010 9:13:54 AM CDT
Meg Bressette says ...
John - I worked for WFM for over 10 years and had the wonderful opportunity to work for A.C. Gallo during that time. He is a thoughtful, considerate, talented individual who has my utmost loyalty and respect. I would move across the U.S. to have the opportunity to work with A.C. and I truly consider him to be one of WFM's greatest assets. Meg Lelgeman Bressette
08/06/2010 3:37:44 PM CDT
Joyce says ...
I absolutely love WFM! I am a teacher with a Master's Degree and, if I decide to quit teaching, tell everyone I would work at WFM. Everyone is so nice and happy-it's really amazing! Plus the food is great! Keep up the good work in New Orleans, LA!
09/22/2010 8:02:31 PM CDT
sharon says ...
Hi John Thanks for sharing the thoughts and visions, and creating such a wonderful culture at Whole Foods. As a consumer I certainly appreciate the variety of products Whole Foods offers, the friendly staffs & atmosphere, and the lifestyle you aim to see. As a vendor we appreciate Whole Foods' support for all natural, and more plant-based options in the stores to give the consumers opportunities to try something that's also delicious, cruelty-free, and environmentally sustainable. It makes us also feel that we are all in the big movement together to make changes for a better world, for all beings. As a business entrepreneur I applaud for what you did and do years after years, and I look forward meeting you one day to learn so much from you! I guess the only thing as a vegan myself, is that I, and ecoVegan, totally encourage a compassionate and sustainable lifestyle; while WFM supplying non-vegan products happens to be the opposite... It's a mixed feeling I have personally because I also understand the business perspectives; but again, personally, i think there are lots of option by going Whole Foods without involving any animal products. I guess that's a business decision that's made by the E-team! Cheers, and best wishes for Whole Foods' success in the wellness program, definitely looking forward to see the vegan to be the mainstream of discussion and practice! Best, Sharon
01/11/2011 9:54:38 PM CST
Renee says ...
Hi John, YOu made the right decison. One sure way to make the world a better place is to make it healthier. You help with that in a big way. Bottom line, I trust WHole Foods.I am also able to stay Ageless...And, since that is the name of my blog, I must look and feel great! And, they tell me I do. Shopping at Whole Foods is always a wonderful experience too. All your hard work is paying off.... Thank you! Renee G.
01/24/2011 7:47:43 PM CST
Meri Hutchison says ...
Leadership can come from all levels of a company. My 3 year old granddaughter was just diagnosed with alcerative colitis, she is also lactose intolerant & is being put on a gluten free diet with dairy & legume restrictions, so my daughter made arrangements with Meg at the Louisville, KY store on Shelbyville Road for a tour. I went along & had to let you know how impressed I was with Meg. She is extremely knowledgeable about the diet itself, as well as dairy diets, the store of course & was extremely professional, helpful, patient with us & answered all of our questions. She didn't try to rush us or rush through the tour. We had a 3 & 5 year old with us, who by the middle of the tour weren't extremely patient themselves but they didn't rattle her at all. She also gave us some good tips, told us about good alternatives to pastas, rice, etc. & gave ideas of how to cook them. She checked labels for us & told us what to look for. She also led my daughter to the website for recipes & other information. It was a great experience which isn't typically these days so I thought it was important to let you all know what a value she is to your store & company. She showed great leadership & was an ambassador for Whole Foods. Thank you!
05/24/2011 1:15:58 PM CDT