August 19, 2009
Time for John Mackey to Resign
Commentary
by George Anderson
Okay,
the headline got your attention. Yes, we believe Whole Foods’ CEO John
Mackey should resign but not as you might surmise because of any particular
ideas he expressed in a recent op/ed piece on healthcare reform in The
Wall Street Journal.
Mr.
Mackey should resign because, purely and simply, he has become a liability
for Whole Foods. An email from his own company acknowledges Mr. Mackey’s
most recent misstep.
“As
you are aware, John Mackey wrote an op/ed piece that was published
in The Wall
Street Journal earlier
this week on health care reform, one of the biggest and most emotional
issues facing our country. John’s intent was to express his personal
opinions — not those of Whole Food Market team members or our company
as a whole. Still, it’s very clear that John’s piece offended some
of our customers, other members of the communities we serve and some
of our team members as well.”
Mr.
Mackey’s op/ed piece is symptomatic of real deficiencies in his leadership.
While these might be able to be tolerated in good times, these are not
good times for the natural and organic food chain.
- He is disconnected from
a core consumer group of Whole Foods. Mr. Mackey doesn’t seem to understand
that a large number of Whole Foods’ shoppers are politically liberal.
Their shopping at Whole Foods has always been, to them at least, an
outward sign of that liberalism and their personal philosophies about
health, the environment, fair trade, etc. (From a strictly communications
standpoint to this audience, who thought a lead with Margaret Thatcher
was a good idea? Weren’t there any quotes from stump speeches Ronald
Reagan gave against Medicare for the AMA back in the early sixties?) - Staying with Whole Foods’
shoppers, Mr. Mackey forgot consumers have many options other than
Whole Foods. Today, people can be “conscious consumers” at Trader Joe’s,
mainstream supermarkets and many other stores that sell organic and
natural products. - Whole Foods’ “apology” points
out that Mr. Mackey doesn’t get the people who are working for his
company. Back in 2002, while doing some quiet research of Trader Joe’s
as a crew member, we found Whole Foods’ associates were some of its
most likely recruits. To a person they came to TJ’s saying they wanted
to work for a company that didn’t say one thing publicly and do another
in practice. Perhaps this is a small indication of what they were talking
about back then. - Mr. Mackey doesn’t know
how to stop talking, blogging or otherwise communicating with the outside
world. Having gone through the whole “Rahodeb” business that involved
a Securities and Exchange Commission investigation
into anonymous posts he made on a Yahoo Finance board, you’d have thought
that someone on the Whole Foods board would have suggested a bit more
caution on his part going forward. If they did, it didn’t work.
Finally, John Mackey has to go
because his op/ed piece is costing Whole Foods brand equity (and likely
dollars and cents as well) at a time when it can’t afford to be giving any
away. For many people, Mr. Mackey, like Steve Jobs at Apple or Jim Sinegal
at Costco, is Whole Foods. The company and Mr. Mackey’s claims that the opinions
expressed in the Journal were
his own and not the company are falling on a lot of deaf ears. When your shoppers
stop listening to you, it’s time to bring in someone they will listen to.
Discussion
Questions: Do you think John Mackey should resign as CEO of Whole Foods?
How would you evaluate the company’s crisis management response to the
uproar caused by Mr. Mackey’s op/ed piece?
Discussion Questions
Poll
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I don’t think John Mackey should resign as CEO of Whole Foods because I believe he has the right to express his opinion in print, even though I disagree with him. I also believe that shareholders ought to be focused on Whole Foods’ recent performance (not bad) and share price (close to its 52-week high) in determining whether its CEO keeps his job or not.
All that aside, there is clearly an issue when the CEO of a public company spouts off and behaves as if he is still running a private concern, without accountability to his board and shareholders. Mr. Mackey also has a responsibility to keep his mouth shut when he risks alienating his core customer with his political views. I have staunchly defended the Whole Foods acquisition of Wild Oats on RetailWire, and I do believe it’s a well-run company…but Mr. Mackey may want to lower his profile in the future and stick to running his business.
Controversial people draw fans and foes. While sensitivity and discretion do not seem to be Mackey virtues, are they appropriate reasons alone to scuttle him? Probably not but doing stupid things publicly could be. Perhaps he has just become too old and tactless to quarterback Whole Foods.
I think as we go further down the road of corporate transparency and social media, more John Mackeys will bubble to the surface. There’s nothing new about having a pompous liability in the corner office but until now they’ve never had a social media megaphone at their finger tips.
Should Mackey resign? Perhaps. But the bigger questions concern the new qualities, traits and sensitivities that all companies will need to seek in their leaders in this era of open communication.
No, John should not resign. At least he is up front with his ideas. Whole Foods is in business for only one reason and that is to make money. The stock price has nearly quadrupled off its November low. Some people think that Whole Foods is some kind of hippie liberal co-op. If that were the case, then John should resign. My fear is, if John resigned, two things might happen: 1) The company might fall into the hand of some liberal extremist or 2) fall into the hands of a sterile supermarket chain. Either one would ruin the company. John is a nice balance in between. I don’t think we give John enough credit. I believe that what the press views as the acts of a lunatic are in fact well calculated thoughts of a genius.
Haven’t followed this closely. If he’s become a problem, it’s the board’s duty to put some penalties in place for specific behavior, and put some controls on him. But presumably, his entrepreneurial vision and leadership have taken the company far, and kept it at least fairly healthy. On the face of it, and considering what other CEOs have done (and not done) over the years, I think pulling the plug on him right now is not called for.
Without commenting specifically on Whole Foods (and as a Denver/Boulder local, I’ve been biased since the Wild Oats takeover anyway), I will draw some parallels. First, I wrote an article for RSR’s weekly newsletter after watching a speech by the CEO of Overstock.com on naked short selling–something that he has become a passionate speaker about. In my piece, I asked: given the convergence of personal life (or at least personality) and public life thanks to tools like Twitter and Facebook, how do you manage that convergence when it looks more like a collision–and can impact your brand (i.e., detract from it)? In Overstock’s case, it wasn’t really a collision, but it definitely had the potential to be distracting.
Here’s another parallel: celebrity endorsements or celebrity-driven brands. They’re only as good as long as the celebrity stays in the “famous” rather than “infamous” category.
So: The top three ways to tell it’s time for your brand’s ‘celebrity’ to move on…
1. You are spending more on PR for apologies than on your brand values.
2. Your brand’s celebrity is pilloried in a major trade publication.
3. You are losing customers or employees as a direct result of the celebrity’s continued association with the brand.
Any one might be enough to justify cutting your losses, but all three? Hmmm….
Transparency is great, but like the “Emperor’s New Clothes,” too much transparency can be a bad thing.
Wholepaycheck does have plenty of contenders to its title as well as a competitors, such as Safeway Lifestyle, Fresh& Easy, A&P/SuperFresh/Waldbaum’s Fresh Markets, the Fresh Market, Trader Joe’s, and so many other spinoffs and health food co-ops, that I really think that when John’s trap overflows, that he is definitely hurting both WP’s sales and image.
Should he go? Probably. Sometimes private opinions expressed by executives tarnish the reputation of their companies. WP is supported by a liberal customer base. John has definitely ruffled some irate feathers, and I think no PR other than the board showing Mackey the door will rectify this explosive situation.
Whole Foods has proven to be rather adaptable and quick to respond to market, economic, and competitive pressures. If Mackey has been steering that ship, then he has done a rather admirable job. While I am not prepared to anoint him or anyone else as a genius for simply sharing an opinion; and especially one that seemingly flies in the face of his constituents–he has brought the topic to a point where it is further crystallizing discussion and creating a forum for it to be debated.
Would it be recommended to “bite the hand that feeds you?” No. Is the discussion about his ideas and the debate over the issue appropriate? Yes. Agree or disagree, he has furthered the conversation and opened up some others (corporate responsibility, whether to focus on performance over alignment with core values, etc.).
If Mr. Mackey were running for office then the debate he has helped to stir would be understandable and even welcomed in most quarters. Unfortunately for Whole Foods and its shareholders, he’s running a business. It’s hard to see how Whole Foods was helped by any of this.
Not yet. As Madonna once said, “all P.R. is good P.R.,” and her ‘law’ applies here. Mackey’s quirkiness and honesty is actually very refreshing and fits their brand right now. If ever, and it’s a big IF, WFM decides to become a larger, more profitable company, which means streamlining operations (11 regions, 11 ‘Presidents’, 11 biz models = what?) and a major overhaul of business technique, then it would be a good idea for him to step aside, let the suits make it happen but keep a power position as a “soul” consultant to keep said suits true to the brand’s core ideals. But until that time, we all seem to be really enjoying his P.R. technique- at least everyone’s paying attention!
Before you suggest that a man who built a company from nothing into a powerhouse should resign, perhaps you should wait to see if there is actually any real effect on sales? I don’t think there will be, for three reasons (mostly the first):
1) National boycotts generally don’t work (think Domino’s, for one). Can anyone think of a situation where one did work?
2) Many people of many political persuasions shop at Whole Foods. Their business couldn’t be as big as it is if it were limited to the Angry Left. Some people are promising right now to shop there more because of this.
3) Anyone who wants to educate themselves enough to actually read the piece will see that (whether you agree or disagree) it is reasoned and not mere propaganda. Many are saying they want to raise the quality of debate on the health care issue–if this piece doesn’t do that, what does?
Like Mr. Mackey, I speak only for myself here, not for my company. But, for the record, I will say that I strongly agree with Mr. Mackey’s message, and I also admire his courage.
Why aren’t we hearing similar cries for Mike Duke’s resignation? Surely he did not represent the views of 100% of rank and file Walmart employees in his letter to the Obama administration.
Why aren’t there blogs and social media pages calling for a Walmart boycott? Aren’t there any social and fiscal conservatives who shop there? Aren’t they outraged that a CEO would throw the weight of his brand into the discourse over their health care alternatives?
Based on the most recent polls, it is illogical to think that this conversation is so one-sided due to all Americans supporting the Obama administration’s plan for health care.
And if the issue is truly whether or not a CEO should remain out of the public forum on social issues–isn’t Mike Duke equally guilty, regardless of his position?
Full Disclosure–I’ve personally heard John Mackey talk passionately and knowledgeably about health care and the broken health care ‘system’ more than 4 years ago.
That said, should he resign for actually exercising leadership on a vital topic ? Absolutely not.
If the Board has a problem with his leadership then fire him. Resign? No way.
Wow–another “politically correct” thinker–this time from within WHOLE FOODS. Don’t think the way I do on a highly charged issue, like Health Care? Perhaps you should go away?
Horse feathers.
Mackey has a view. As a leader of a publicly-traded company, there are times that he should speak out, and let people know his opinions. To be certain, there are other occasions to “hold his fire.”
If this same author read today’s WSJ column by Charles Schwab, and worked for Charles Schwab & Company, would the author call for Schwab’s overthrow, merely because Schwab is challenging Andy Cuomo’s (New York Attorney General) lawsuit of that firm? Cuomo is taking a liberal point of view that Schwab should not have sold certain securities, even though they were self-directed and the choice of the consumer.
No way that Mackey should be ousted merely because he stated his opinions, in a very insightful and thoughtful manner, in the Wall Street Journal. Time for this author, and many others to recall (you pick the writer: English writer Evelyn Beatrice Hall, or the French novelist, Voltaire) the words: “I disapprove of what you say, but I will defend to the death, your right to say it.”
The idea that a CEO should resign because he dared to express an opinion is downright silly.
Our government taxes corporations–heavily. If we tax them as a legal entity, why don’t they have the right to express themselves as a legal entity? I think more CEOs should step up and add their voice to national politics. It would be better for all of us.
In the case of Mackey, yes, this customer base does have a lot of liberals, but that isn’t 100% of the base. As a diabetic–one of millions in this country–I shop there due to dietary issues. I am not a liberal. But it would be a shame to think that liberals would want to shut up an opinion of an intelligent, articulate responsible person that is adding to discussion. (Rather than simply shouting as has unfortunately happened at many town hall meetings.)
As happens, if you actually read the article, what you see is a very good suggestion on how to begin to address the health care situation in this country. This is a responsible employer that has a good (not perfect) plan. It’s a positive contribution to the conversation. If this administration is serious about building something that is good for the economy and the taxpayer instead of just for the currently uninsured, there should be encouragement of more op-eds like this.
It is very unfortunate that some liberals out there are seeing this as a slap in the face of President Obama, but the fact is that this is a huge issue. It deserves at least much time and consideration as the amount of time it took for the Obama’s to select their family pet. Rushing this through without giving everyone a chance to contribute and yes–DEBATE–how healthcare reform [should proceed] is just silly.
We just finished 8 years of an imperial presidency and part of the “change” we voted for was to try to reach some balance. It wasn’t to have the excesses of the right wing be repeated by the left.
Maybe, just maybe, conservatives that have never shopped in a Whole Foods will give it a try.
Why would agreeing with 70% of your consumer base be seen as a risky move?
Levi’s didn’t worry about flashback when they participated in fighting the gay marriage ban…that WASN’T supported by their core audience. The Gap didn’t worry about opinion during Code (Red) promotions. Because those were seen as being positive social movements.
Now comes the question as to why stating a conservative belief is automatically seen as being a socially negative opinion… hmmm….
Good heavens. Health care reform has been a headline story for three months. The bill is still not fully formed, is currently being “wrangled” in multiple congressional committees, is struggling against growing concerns of the American public in polls, there is no clear path on how to pay for it–and Mackey, who actually has some experience providing benefits and health insurance for his company’s employees offers some observations and he should be “fired”? Not the heads of the drug companies, or of the insurance companies, or of the Trial Lawyers’ Assn., or the wholly ineffective White House Communications staff, but–a grocer???
Maybe the nation’s liberals will rise up against WF, but a lot of liberals are unhappy with what’s occurring in Washington these days (and not because of Mr. Mackey.) Maybe there will be a successful boycott, but liberals are not the only WF shoppers by a long shot. Those inside WF will know what to do about Mr. Mackey and whether he is a liability and distraction. Or, rather, whether he provides visionary leadership and innovation to a fairly unique retail model. The model by the way, which is being targeted and vilified by outside influencers (not all political) hoping for very specific results. You ARE aware that WF’s corporate competitors are busy actively helping this little Mackey controversy along, right?
John Mackey is entitled to his personal opinion and should not resign. If is is forced out based on expressing his right to freedom of speech then that goes against the values of Whole Foods and I will cease to shop there.
John has built a company that achieves one of the highest sales-per-square-foot performances in the world when it comes to food stores. If anyone should be fired, its those CEOs who run those $5 per square foot per week stores that keep sending out all the glad-handing press releases.
In today’s politically charged environment, it requires bold people to express bold opinions in order to assure that the “changes” that get enacted are indeed the desire, and in the best interest, of the people of this great country. To single out Mr. Mackey for his comments while ignoring the many others who are expressing theirs, is in itself a telling “sign of the times.”
Should Mr. Mackey resign? Certainly NOT for his opinion, and his opinion is all you really reference.
I applaud Mr. Mackey for standing up and speaking his opinion on this issue, and I believe that others in his position should do the same. Cap and Trade is another great topic.
John Mackey’s opinion expressed in the WSJ was congruent with the lifestyle Whole Foods promotes. He is telling the rest of the world that may not shop at WF that dietary lifestyle changes are critical to longevity and getting to the core of why health care costs are spiraling upwards.
Not everyone who shops at WF is a die hard liberal…yes those people may be miffed but for them, WF is a status symbol and part of their persona. Worry about Trader Joe’s? Many WF customers already shop there anyway. Even the best Organic/Natural sections of main-line grocers are just that–sections. WF Is Natural and Organic…it is a Brand vs. a series of categories.
One might argue about the article’s timing, but given the heightened awareness of health costs, why not promote a dietary lifestyle that is most easily attained through shopping at WF?
A quick primer for this newly discovered army of First Amendment defenders: yes, of course, citizen Mackey has a right to both have and express his views and CEO Mackey certainly has a right to have them as well, but whether he should express them (i.e. as implicitly being affiliated with WF) is another issue.
Needless to say, this isn’t the first time Mr. Mackey has drawn attention to himself for his extracurricular activities, and that is the problem…or at least it MAY be a problem, since it tends to suggest a loose cannon: the distance between genius and madness being a small one.
This is less about John Mackey, his position and his opinions and more about people who want to hurt people with whom they disagree. It is very easy for a group of activists to get the ball rolling on a boycott; a boycott involving a retailer is even easier, since little community organizers around the country can keep their skills sharp between elections. These people don’t care whether or not Mackey has the right to speak his opinion or whether he should have that right. They found something they didn’t like in his opinions and want to silence him. The boycott proposers and organizers are the ones who should be castigated, not Mackey.
It’s called “Freedom of Speech” or did that freedom go away with the Obama administration?
John Mackey is entitled to his opinion. I’ve never been to a Whole Foods, but if I can find one, I’ll shop there just to support the fact that he is entitled to his opinion and shouldn’t lose his job just because he wants a voice in our Democracy.
Resign? Really? For being a leader with an opinion? In our rush to becoming a third world nation, shouldn’t we be out soliciting opinions like these from just about every major CEO in the country?
Offensive to a few select liberals or not, it’s time to have a real discussion from all levels before we turn anywhere from 7-12% of our economy over to the same folks that so effectively run the post office.
In just about 7 months this country has taken a dramatic turn. We may be at a point where public debate will cease. It’s nearly at that point currently. What’s being suggested here is nearly the death penalty for thought contrary to the elite. That’s not death as is physically, but by personal destruction and removal of one’s ability to earn a living simply for thought.
For the most part, at least for a few more weeks, employers’ voices in health care are crucial. Every top 500 CEO in the country ought to be lining up for op/eds. It’s their last chance likely to speak for those they currently insure. It maybe their last chance to speak openly on any issue with out being removed from their positions by the executive branch of a completely different nation than it was 7 months ago.
The entire notion is quite chilling and likely the most politically charged from a blog that generally steers away from the entirely political.
I will be shopping at Whole Foods rather than Central Market for the next 2 months.
Mr. Mackey is spot on. The deluded leftists are the ones who are crying out for a government run health care system (why would any sane human being want the U.S. Mail health care equivalent, when you have the FEDEX and UPS health care equivalents available?)
For any one to say that any program run by any tier of government can be efficient and competitive with the private sector indicates a total lack of knowledge of government programs. It is so far wrong that it is laughable. There is no program run by the government that is not overrun by bureaucracy, bloated, costly, inefficient and out of control, rife with waste.
Kudos to Mr. Mackey and I do shop at Whole Foods and now I will make sure that I shop there more often.
Having read comments on this issue all day long, I remain undecided as to what John Mackey and/or Whole Foods as a company should do. I have been amazed at the tone of some of the barbs directed towards our editor-in-chief for his COMMENTARY today, though.
Nowhere did George suggest that Mr. Mackey should not be free to express his personal opinions. Yet,it is obvious that were Mr. Mackey not CEO of Whole Foods the opinions would never have been published and only his friends and family would know what they are.
It is ridiculous that John Mackey’s comments have been so politicized, without people bothering to focus on the wisdom in the words of a founder and CEO who understands preventive health and more importantly has been the catalyst for huge growth of a company considered to be one of the best places to work in America and is a wonderful example of a successful large corporation also being very socially responsible. If you enjoy having access to wonderful organic produce, you need to thank John. Whole Foods has created such demands for these items before they were mainstream that it enabled the growers to profitably produce these items. Yes, I am a free marketer, but this is a wonderful example of how it works. Do you think that if the government 10-15 years ago mandated that we need to eat healthier food that that would have made it happen? I think there are many who have forgotten that it is our wonderful free-enterprise system and not the government that is responsible for these successes.
It is absolutely amazing to me that people want the government to run healthcare. One of John’s first suggestions is that individuals should be able to deduct health care premiums. Is there any sane person who objects to this? I think HSA accounts are absolutely the way to go and another great free-market solution. Why don’t some of the complainers ask Whole Foods employees how they feel about their benefits?
As soon as I read the Mackey article, I immediately forwarded it to many people I know. It is such a sane look at health care issues compared to all the craziness now being spouted. Kudos to John for being willing to say what is right at the risk of alienating some people. The easy thing to do would be to say nothing.
Organic food is about wellness. Consequently, Mr. Mackey is the perfect person to be discussing health care. This is particularly so because his opinion piece in the Wall Street Journal is pragmatic, informed and working for his company.