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From the Corner Office - John Mackey

Whole Foods' John Mackey gives his company the freedom to flourish.

Brenna Fisher

Even if you have never shopped at a Whole Foods
Market and observed its cornucopia of organic
offerings, you have undoubtedly seen its influence
upon the food industry. The world’s largest organic and
natural-foods grocer has grown
to include more than 270 stores and
counting, with more than 53,000
employees. Its success has inspired
other grocery chains to carry organic
lines and even identify the locations
from which foods are harvested.

Co-founder and CEO John Mackey, 55, will
be the first to tell you he never had a master
plan to introduce organic food to the masses.
The philosophy-educated college dropout
says he didn’t think in terms of risk in those
days but in terms of feeling good about his
job. With $45,000 borrowed from friends
and family, Mackey and then-girlfriend Renee
Lawson Hardy opened a tiny natural-food
store in a three-story house in Austin, Texas.
At the time (the late ’70s), natural and organic
foods had a very small cult following.

“As the media liked to say in the early days, we were a bunch of
hippies selling food to hippies. It was never taken very seriously by
the mainstream,” Mackey says.

The young couple was excited about doing something they loved
and were utterly unaware of the market’s potential. To make ends
meet, they lived in the third-floor office of their store, SaferWay,
and bathed with the dishwasher hose in the vegetarian café on the
second floor because there was no shower.

They eventually partnered with Craig Weller
and Mark Skiles of Clarksville Natural Grocery and
relocated to a 10,500-square-foot space to open the
original Whole Foods Market in 1980. They were
content with the one store, but a Memorial Day flood
in 1981 caused extensive damage throughout Austin
and devastated Whole Foods Market. The incident
compelled them to rebuild and open a second store.
“We didn’t want to have all of our organic eggs in one
storefront, so to speak,” Mackey says.

Expansion was slow in the beginning—building
on the success of each new store. By 1988, they had
just five stores. During that slow growth, Mackey
and his co-founders were able to figure out which
business systems worked the old-fashioned way—by
trial and error. What they discovered was that being
open to constant change and new ideas (no matter
who they came from) was the system that worked.

“I like to say that Whole Foods reinvented the wheel many times
because we weren’t stuck in a legacy way of thinking,” Mackey
says. “We were very free to innovate and do things differently. We
didn’t know what we
weren’t allowed to do, so
brought fresh thinking
fresh eyes.”

"Whole Foods reinvented the wheel many times because we weren't stuck in a legacy way of thinking."

Fresh thinking led to the
creation of an idealistic workplace
that allows employees
to basically run their own
stores and teams almost independently
from corporate. As
long as employees meet Whole
Foods’ overall mission to sell
the highest-quality organic food
and improve people’s well-being,
there is no need for interference.
And since stores are staffed
by individuals who are downright
obsessed with everything
from hormone-free milk to
homeopathic remedies, that
mission is deeply rooted in the
company culture.

“Having a strong purpose
and mission attracted a lot of
idealistic people who probably
wouldn’t have worked for
a traditional grocery store,”
Mackey says.

After Whole Foods went
public in 1992 and raised $23
million with the initial public
offering, it purchased the
Boston-based chain Bread &
Circus. Mackey says combining
the intellectual capital from both
companies formed a rock-solid
foundation that prepared them
for the explosive expansion that
followed for the next 16 years.

The company has yet to stop
growing. As of November 2008,
there were 66 leases signed for
new stores. In fiscal year 2008,
Whole Foods earned an impressive
$8 billion in sales, and
it raked in $1.8 billion in the
fourth quarter of 2008 alone. Its
list of initiatives hasn’t stopped
growing, either. Recently, the
major emphasis has been on
developing plans to make Whole Foods a leader in environmentally
friendly and animal-friendly practices.

Its current green initiatives include eliminating the use of
disposable plastic bags and, eventually, Styrofoam packing
materials, using renewable energy sources like solar and wind
power and creating local green task forces to make decisions for
their individual stores.

Mackey’s biggest project is a new rating system that will be
designed to ensure all animal products sold at Whole Foods
meet a minimum standard. Even the lowest rating of 1 includes
cage- and crate-free livestock. A rating of 5 means the animal
has been raised in an enhanced outdoor system without any
physical mutilations. Mackey says the system will revolutionize
industrial-food processes.

Like so many ideas that have made Whole Foods such a
respected company, it has evolved, well, organically, with collective
input from the individuals who work there. Mackey credits
the entire Whole Foods team for its continued success. He says
letting go of some of his psychological ownership of the business
has allowed it to flourish in unusual but desirable ways.

“Like a good parent I’ve helped guide it, but I haven’t tried
to control it,” Mackey says. “I think a lot of entrepreneurs limit
their company’s potential because they so closely identify it with
their own ego that they won’t let it evolve in a direction that it
wants to evolve.”

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