Reva: You’re listening to Next in Retail from Publicis Sapient. The podcast that shares insights on unlocking what’s next in digital transformation.
Reva: In the chaos that has been 2020, various industries have seen a massive acceleration in their digital journeys. Grocery is a leading example of this trend, with their need to rapidly adopt digital technologies with more urgency than ever before. Fortuitously ahead of this curve, has been Whole Foods, who’ve been owning a digital mindset since their partnership with Amazon emerged. In this exclusive interview with CEO of Whole Foods John Mackey, Publicis Sapient’s former Head of Content, Barbara Chai, discusses his company’s merger with Amazon, adapting to COVID-19 related shifts, and setting a new ethical framework for leaders. Now let’s get started.
Barbara: So your first book, Conscious Capitalism, you published in 2013, it’s been a bestseller. Why did you decide to follow up now with a book called, Conscious Leadership?
John: Conscious Leadership is actually one of the pillars of Conscious Capitalism. Over the last several years, I got a ton of questions when I be on the road about Conscious Leadership. It’s like Conscious Capitalism kind of gives a theory, but people want to know how can they as leaders, how can they be more conscious leaders? It was clearly a demand for more depth than we went into in the book, so Conscious Leadership is fulfilling that request. And it’s got, it’s very practical, but too, there’s some theory, but were telling a lot of stories, and we have a lot of practices. We’re enabling people to become more conscious leaders.
Barbara: In the book, you describe how conscious leaders usually evolve overtime, that their sense of purpose takes shape gradually. It’s not that they’re suddenly born with a sense of purpose, so when you look back to when you first founded Whole Foods, how has your own purpose and identity as a leader evolved over time?
John: So in some ways the purpose of Whole Foods is, it’s evolved since we started the company, because when we started the company I was now, we were just young I was 24-23. Renee was 19-20, and we just wanted to sell healthy food to people. The higher purpose of Whole Foods is to nourish people on the planet. That’s exactly what we were doing 40-42 years ago, but it’s, we have a bigger playing field. I mean we just had one store originally, we didn’t have any sense that we were going to have stores all over the United States and that we were going to, we’re going to have 100,000 people working for the company, and we were going to have millions of customers, and we were going to have this impact that we’ve had. That all came later.
And then what happened overtime is, as we grew as human beings and we became more conscious, as we realized besides the food mission of the company, we had we have certain responsibilities and obligations to all of our stakeholders, our customers, our team members, our suppliers, our investors, the communities that were part of, the environment that we’re part of, and we end up starting foundations, like the Whole Planet Foundation, which does microcredit loans. We’ve held over 5 million people or mostly women, mostly almost all ethnic minorities around the world through microcredit loans make create better lives for themselves.
Our Whole Kids Foundation gives, creates giveaway salad bars and school gardens to thousands and thousands of schools around the United States, in the UK and Canada. So this sense of our ability to impact has grown as the company has grown, but it still rooted in that original purpose of trying to sell healthy food to people. So my own sense of purpose has grown as I’ve, as I’ve just matured and realized that I could have a bigger impact on the world. And I would say Conscious Capitalism, Conscious Leadership follow into that same sense of purpose. I mean, why did I write these books? It’s not for the money. Books don’t, they don’t pay off that much, but for the time you put into them, but because I wanted to get these ideas out there. I wanted other businesspeople and other entrepreneurs to think about business differently and of all of their leadership styles. So my sense of purpose has grown, as I’ve grown as a human being, it’s kind of grown along with me.
Barbara: What would you say in recent years has really influenced you into becoming the conscious leader that you are today?
John: Three and a half years ago, we had our shareholder activist, Jana Partners, try to take over our company, take over our board of directors, replace management, sell the company off to the highest bidder. And then that directly led to us merging with Amazon, so that’s clearly the biggest events of the last five years. How it’s affected me as a conscious leader is that I really sought the win-win-win solution. What was the win-win-win solution? We have a whole chapter on that in the book, and I talk in the chapter about how the Amazon merger was a win-win-win solution for all the stakeholders of Whole Foods. So that was the right thing to do, and, but it wasn’t obvious initially.
We were confused about what our alternatives might be. Maybe we should take the company private. Maybe we should sell it off to someone like Warren Buffett, but he wasn’t interested. Maybe we should fight Jana and see if we could beat them. There were a lot of different alternatives that we thought and thought about, but sort of in a flash of insight, one day I realized the best move for both figures to merge with Amazon. And we contacted them, they were very interested, we actually came to terms very quickly as we had a strong overlap in our sense of purpose and vision for the business. So my sense of purpose has, I think, evolved. I become more conscious and now that we’re part of Amazon, I’ve, I’ve had some growth accelerants because Amazon has taught me and Whole Foods a lot of things we didn’t realize before that’s made our company better.
Barbara: How has the win-win-win marriage changed you personally?
John: Well for one thing, Whole Foods is, I mean, we were independent for 37 years. Now we’re part of another company, a bigger company. And Whole Foods is a very big company in and of itself. So when you’re… for a long time, I mean, I didn’t report to anybody, right? I didn’t have a boss other than I reported to the board of directors every, you know, quarterly, but now I have somebody, have a boss at Amazon that I that I report into on a much more regular basis.
So that took a little bit of use, a little bit of getting used to it, but it hasn’t been that big of a transition, and I’ve always been a team player. So it’s a little bit harder to make decisions than I used to make, so a lot of times Amazon wants me to check in with them on the big decisions, whereas before I wouldn’t have to check in with anybody, I could have acted. But all in all, they’ve actually, Amazon’s been a great partner for Whole Foods, respected or culture, they haven’t tried to change us other than to help us become a better company than we were prior to the merger.
Barbara: Can you talk about how Amazon has helped Whole Foods Market advance technologically?
John: There’s some things I can’t talk about because a lot of the big advancements are going to happen in the next few years. There are some amazing technological innovations, or that are, that are going to be released in the next couple of years, including Whole Foods that will make, they will change grocery shopping as we know it. So I’m not going to say what they are, but you’ll have to wait and see. But in the short run, of course, we’ve seen on the delivery capabilities, I mean, if you’re a Prime Member, you can get free delivery from, from Amazon as part of your membership, and that is truly exploded. There, part of it is, we have to transition, and we’ve been transitioning over to Amazon systems, and now that they’re getting in particularly doing their own stores, they are building new technologically, technology platforms that, that the new, new Amazon stores and Whole Foods Market will rest on. So the best technology is yet ahead, and I promise you, it will be worth the wait.
Barbara: Where do you still see opportunities for Whole Foods Market to transform digitally?
John: We just in the last few months gotten onto, getting, getting on Amazon’s what we call Whole Foods Market on Amazon, where we have a catalog at Amazon. It, that took a long time to make that digital transformation, but that’s, that’s bit of, there’s been a big increase in our sales, it’s made it easy for people to order from Whole Foods just on Amazon. It didn’t require a separate going on to the Whole Foods app. Hopefully, the app for example, so but it’s getting on Amazon’s platforms is really a big task for us, and we have a different POS system that we will have to transition to overtime. I mean, the big technology at Amazon, I mean, you see the Amazon Go Stores where people just, just walk in, just walk out. I think that’s going to be a technology that will spread overtime and will eventually be in Whole Foods Market stores, which totally transforms grocery shopping because you’re just, just… we know you’re in the store, we watch with, cameras are watching what you’re, what you’re buying and then just walk out with it. It’s, it’s the ultimate convenience. Nobody likes to wait in line, so if you take the line waiting out, that’s going to transform everybody’s lives. And particularly if you, I mean, some people will continue to order as a transaction, it will just order online, so the omnichannel is this big idea, and people always ask me where do you think it’s going to go? And I say it’s really simple: what’s going to happen overtime is people are going to get whatever food they want, whenever they want it, wherever they want it, at a price that they’re willing to pay. That’s what’s going to happen that the consumer is going to be the Queen in the King, and food is going to be coming their way, however they want it to.
Barbara: So leading up to the merger in 2017, as you said, Whole Foods Market was thriving. It was growing at a fast pace, that’s why people were interested in it. Are there situations or experiences now that are challenging because Whole Foods Market is no longer independent?
John: It’s different and, of course, there are always challenges. The biggest challenge though in 2020 is clearly COVID. It swamps everything else. And, I mean, think about it, Whole Foods, while I’m sitting in my corporate office here above one of our flagship stores, but in an office that 1,000 people can work in, there may be 60 people here today. But I haven’t seen an Amazon person in-person since early March. All my communications with Amazon are via Zoom or Chimes - Amazon Chimes is their own internal Zoom, secure video system, so I don’t, it’s bizarre actually, so there are, that’s been the big challenge, and it’s been such a big challenge.
And how do you run a company virtually? We’re trying to figure out how to do that. It’s hard for me because I like to be in the stores. I like to connect with people. Those stores are energizing me personally because that’s kind of what I say the life of the store, the life of the company is in the stores, not in the office, so that’s been very hard for me personally. And I’m, I’m, I’m going to break out sometime this Fall even with, even if I have to wear mask, and social distance, I want to get into start traveling into our stores again. So as soon as we get through the Summer, that’s what I want to start doing. So there are lots of challenges.
I’m not going to get into the details of any challenges we might have with Amazon because in the big scheme of things, those challenges are minor compared to the benefits that we have. But a merger is like marriage, you know. If you’re in a long-term relationship, they’re going to be, there are obviously benefits, or you wouldn’t be in the relationship, but is it perfect? There are, there you have fights, do you disagree about certain things? Well, yeah, of course, that’s life, but you work it out. You talk it through. You, you, the best ideas win.
Barbara: This pandemic has had an enormous impact on the economy and almost every industry has been affected. The grocery sector, in particular though, has really experienced a title wave of change. What challenges and opportunities did you face personally as Chief Executive of Whole Foods Market? And how did you lead the company through it all?
John: The main thing to realize is that we’re faced with this challenge, and our first, and most important thing was, how do we keep our customers and our team members safe? How do we keep them safe? And, I mean, Whole Foods is one… we’ve been recognized as really the safest food retailer out there. We’ve been acknowledged in several different polls and surveys, and we were, we were very early in terms of getting people masked up, getting our customers to wear masks, to get deep cleaning, to have testing, to do temperature checks, so it hasn’t been perfect.
But, I mean, I’m not going to give any statistics, but Whole Foods has done far better than the country as a whole in terms of COVID infections, COVID hospitalizations, for COVID deaths. But that’s been our primary goal is how to keep people safe? I mean, our higher purpose is to nourish people on the planet, so nourishing also means keeping people from harm to the greatest extent possible, and then it’s like… then we had a supply problem because everything shifted like all of a sudden, the reason there’s been a big gain in supermarket business is because people aren’t eating out. They’re cooking at home, so we saw an explosion. Some things like, I, take meat and seafood sales just exploded in our company. There are all time record highs every single week. Every week it’s incredible, but prepared foods and nobody… we had to shut down our salad bar, shut down our hot bars, no self-service stuff at all, so they are prepared foods just, you know, they just collapsed. They just disappear because offices which would be, would be generating lunchtime traffic for the most part, those offices everywhere people are working at home, there are working remotely, so we don’t have that same kind of lunch traffic we used to get.
We ran out of, we had to, meat and eat seafood was challenged to get supply in there. We’ve had more out of stocks on a supply basis because just the people’s demand for products just went through radical shifts. And the market adapts to that, but not instantaneously. It takes a little time for those signals to change, particularly in food. You know, you’ve got to raise it, and grow it. I mean, and so there can be a lag. And the good news is that most of those out of stocks are a lot better today than they were back in March or April. And they’re getting better all the time
Barbara: At this particular time in our society, what do you see as some cultural imperatives that business leaders across the globe really need to address?
John: It’s conscious leadership, and in the book, we make a big emphasis on the importance of purpose. I mean, I think a lot of the things that are happening right now in America are because people don’t have a sense of purpose. Humans can’t live without purpose. We are purpose-driven beings, and I think that making money is an insufficient purpose. It’s… we need to make money to live, but it’s hardly a motivation to, it’s not a very inspiring motivation. If you’re just trying to feed your family, that can be inspiring motivation. For most people, they wanted deeper. They want their work to account for more than just earning a living. So purpose is very important, and that’s going to continue. I mean, we were on Maslow’s hierarchy of needs, we are not at the most basic levels any longer. Most Americans are not, and some are, but most are not. Most are looking for self-esteem, and they’re looking for self-actualization or looking for trans, self-transcendence or looking for deeper meaning in their lives. So purpose is only going to get more important.
Love - the most interesting thing that I see happening that love in corporations is mostly hidden in the closet because love is seen as something that might make them weak, not make them strong. It’s, it’s seen as a tradeoff, inaccurately seen as a tradeoff, and I look at our culture right now, there’s so much fear, and there’s so much anger. There’s such a great need to release love, and not judgment, and not hatred, and not attack. We need to practice the virtues of love there. A little forgiveness to go a long way in corporations and in America today, right? There’s so much anger about the past. And we need, we need to, not forget the past, but we do need to forgive the past, since we can’t change the past, we have to be conscious in the future and present and create a better future. So I think love needs to be released in our corporations and released in the larger society, and as leaders. As we say, lead with love. Lead with love, and you can practice that, you know, that, that chapter is dear to my heart. I have to say originated that chapter; I spent a lot of time on it. It’s one I care deeply about.
And then also integrity. Integrity is essential. Integrity meaning authenticity, trustworthiness, honor, just doing the right thing in circumstances, not cheating not lying not stealing. Living a life that you’re doing the thing, that you believe is the right thing to do is integrity.
And then the importance culturally thinking longer term. Most people are stuck into very short-term thought patterns. The COVID really brought it out because I can look past COVID, but I see that we’re going to go through some hard times for the next several months, maybe another year, but, you know, it’s going to pass. And we’ll look back on it a decade from now, we’ll remember, gosh, wasn’t 2020 a weird year? And, what were you doing during COVID will be that kind of stories. And I expect to see books to say the year of COVID, you know, they’ll be all kinds of novels out there, and it’s a, it’s a pivotal event, and one we’re not - it’s not going to be the future. It’s just going to be something that we’ll have in the past in our review mirror, so thinking long term and not getting too hung up on current problems is always a wise thing to do.
These are some areas of culture that we need to nurture in our organizations, and that’s what the book is dedicated to really.
Reva: Thanks for tuning in to Next in Retail. Be sure to subscribe, so you don’t miss a beat on the future of digital and retail.