Leaders can often point to one pivotal moment, a seismic challenge they had to overcome, that came to define, or redefine some cases, their raison d’être as a leader. For John Mackey, it was the day he was nearly ousted from the company he had cofounded and led for more than two decades.
The year was 2000 and he had just sold WholePeople.com, an online initiative Mackey had tried to get off the ground, but ultimately proved too far ahead of its time and, unable to find a solid market, ran out of runway when the dot-com boom went bust.
Mackey assumed that, after the sale of the flagging assets, he could get back to leading the well-established company he’d helped found. “What I didn’t anticipate,” the CEO explains in his new book, Conscious Leadership, “was that a coup was afoot.” He learned that one of his most trusted leaders on the executive team had been plotting with two board members to take advantage of his weakened position to try to replace him.
In January 2001, he was summoned to a board meeting in Florida on a day that is etched in his memory, as he describes in the book: “As I disembarked the plane and got my bags, I felt somewhat numb. The prospect of losing so much of my life’s work hung heavily over me, and even Florida’s sun-drenched beauty couldn’t dispel the psychological clouds that darkened my disposition. How had it come to this?”
As we know, Mackey survived the mutiny and went on to lead Whole Foods back to solid ground, growing shareholder value exponentially, and ultimately, selling to Amazon in 2017—a successful exit for Whole Foods’ investors even if the jury is still out on whether Amazon’s initial vision of upending the grocery industry will materialize.
But that winter day, when Mackey faced the prospect of losing everything he’d worked for, he had an epiphany: “My leadership style had to evolve.”
In an interview with Chief Executive, Mackey explained the leadership lessons he gleaned from that episode, how they serve him today and why companies—and the country—need to jettison the “win-lose framework.” First in a two-part series.
In that early rough patch in 2000, what did you discover was problematic about your own leadership style?
Well, the first thing was that, when you’re the entrepreneur building the company and really driving it, you can take certain things for granted. Like, I took our board of directors for granted. When we started the company, the initial board consisted of closely-held original shareholders, mostly friends and family. Then as we took some venture capital money in, the venture capitalists came on the board, but they were temporary, right? They weren’t going to stick around long term. Then we went public and we hired a board and the board had fiduciary responsibility to the shareholders. So one of the big shifts that I made was, “Oh, wow, I get it. The board is really in charge of the company.” That was a big learning: the board is a very important stakeholder that I need to cultivate to have a really good relationship with, to trust them, confide in them, never take them for granted.
And then obviously since there was a sense of betrayal from one of my executives, I realized, “Oh my God, I want to make sure this never happens again.” So going forward, I was very, very careful about anybody I promoted to the most senior levels. I wanted to promote people that shared the purpose of the company that had a sense of servant leadership and not in it just for the power and money and just to move up in the hierarchy, so to speak. I suppose I became a little bit less trusting, a little more discerning.
And I realized that I myself needed to grow. There were changes I needed to make changes in the relationships with [my senior] folks and the board, but I also needed to change as a leader myself. I’m a little more introverted and I needed to be a leader that was more out in front and who led more by example, so I just became more assertive and put forth a stronger presence. I stepped up into my higher leadership capabilities. That was not something I could do behind the scenes — it needed to be more visible.
It often seems to take a big moment of reckoning to inspire that kind of big change. Do you think you could have reached that realization without those high stakes of your career being on the line?
Yeah, that’s a good question. If I was conscious enough, I would have seen it earlier and I guess I wasn’t. You can think about the big pivotal moments in your own life—sometimes you’ve got to get knocked on the head before you wake up to something. That doesn’t mean there weren’t little taps before then—I’m sure there were—I just didn’t pay enough attention to them. You can always look back and say, if I had chosen differently, if I’d seen this, then this may not have happened, but unfortunately we can’t go back and change the past. So we have to move forward from the lessons that we’ve learned in the present moment. But yeah, I should have seen it before. It was a bit of arrogance on my part, a lack of consciousness, a lack of awareness. There were no doubt signals—I just blew them off. I was surprised and I shouldn’t have been surprised.
You know, I’ve been happily married for 30 years, but when I think back on when I was younger and relationships broke up and I thought, I should’ve seen that coming, or I should’ve done this. I should have acted differently. But we all make mistakes in life. We all need to keep learning and growing because we’re not God. We’re not super conscious beings that know everything. We make mistakes. I’ve made plenty of mistakes. I just think that I’ve learned from them. I’m more conscious today than I was 10 years ago or 20 years ago. And hopefully 10 years from now, I’ll be more conscious than I am today.
It’s hard for anyone to see their own flaws, but particularly as CEO, when your bound to have “yes-men” around you, trying to make you happy, it’s that much harder. How do you ensure you’re staying honest?
You have to develop trusting relationships and you have to have peers, peers outside the company and people inside the company that you trust that will talk to you honestly, because if you live in a bubble—and a lot of entrepreneurs that become very successful live in bubbles—then you’re going to be missing the feedback that you need. So I guess in some ways I was fortunate that I didn’t have a great business background. I mean, I started a business, I didn’t know anything. I didn’t take any business classes in college—I studied philosophy and religion. I learned it as I went along, so I had a certain humility because I didn’t know what I was doing.
Even when Whole Foods became successful, I’ve always had executives that were on the team working with me that I thought, she’s smarter than me in this area or he knows a lot more about this than I do. So I’ve always been open to listening to what people have to say, because I don’t always think I’m right and I’m frequently wrong. Life has proven me to be wrong many, many times. So I think we can learn and grow if we’re open. I think when you really truly have self-confidence, then you are willing to admit you make mistakes. I have found as a leader, as a CEO, that being vulnerable and open and being willing to admit your mistakes and say you’re sorry and apologize, it humanizes you. It makes you a more authentic, real person. And people are going to trust you more because they see that you aren’t perfect. And that also puts me in a position not to judge people all the time, because I realize I’m making mistakes, too. I think that’s part of Whole Foods’ culture, to be honest with you, and I think that’s coming down from me ultimately.
How do you make sure your people know you’re not going to kill the messenger so they’re willing to bring you the bad news you need to hear?
That’s all I get is bad news. If you think about it, when you have a big corporation like Whole Foods, most of the stuff coming my way—and good stuff happens too—but it’s the most serious problems that are gonna make their way to the CEO. In fact, that’s why it’s very important for me to get out of the office and into the stores because that’s where the life of the business is, so to speak, so it’s sort of soothing to my soul. Otherwise it’s like, what’s the crisis of the day? Since Covid hit, we’ve just been in crisis mode trying to keep our team members and customers safe, trying to deal with the change in our product mix to get the right supply chain in place. I woke up [one morning in August] to find out we had two of our Chicago stores broken into and looted. So the first question is, are all the team members safe? Yes. None of them were harmed. Fortunately, they ran away—the looters broke in after the store was closed. But that’s the kind of stuff that I’m going to hear about—the crisis of the day or the crises of the day. So people don’t have any problem telling me the bad news, but mostly because I don’t punish people for telling me the bad news. it’s very important that I know the bad stuff. The good stuff will always make its way up to the CEO ultimately, but the bad stuff could be hidden away. I just always encourage people to tell me what’s going on.
You wrote the book before the pandemic, of course, but does the idea of “conscious leadership” impact how one might lead and how you’ve been leading through this crisis?
Actually, I think this, the pandemic’s been perfect to prove out a lot of the conscious leadership principles of the book. First of all, it’s forced us to—or really, we have chosen to—re-double down on our purpose. Our higher purpose is to nourish people and the planet and that’s been particularly important since there’s all this other stuff going on—politics, social justice, racism. That’s forced Whole Foods to realize we can’t solve all the world’s problems. We need to stick to what what we’re doing, what our higher purpose is—to nourish people and the planet. It’s helped us to double down or even triple down on our purpose.
Also leading with love. I mean, there’s so much anger. People are so upset out there that society is so polarized and politicized—it’s essential that we continue to lead with love, and that we set an example of that and treat our team members with love and that they treat our customers with love.
We have such a win-lose framework in the United States right now, sets of values are trying to force themselves upon other people and some values lose, other values win—I think the United States is built on certain principles of trying to compromise, trying to find win-win-win solutions, where everybody can be happy. And we’re definitely trying to do that now.
Also, leaders need to be thinking long term. One of the things I keep telling everybody is that I honestly thought Covid would probably be over in the summer and I was wrong about that. So I keep telling everybody that, you know what? I don’t know when this is going to end, but it will end—it will. I would be very surprised if a year from now we are still in a Covid crisis in America. One way or another—vaccination, herd immunity—I think a year from now, I don’t want to call it a return to normality, but it’ll be a lot more normal than it is today. So part of it’s just getting everybody to realize this is not going to last forever. Employees are not going to have to wear masks the rest of their time at Whole Foods, and neither will our customers. We will begin to return to normality. We’ve got to think past the current crisis. And especially CEOs and leaders, they’ve got to think about this long term.
How, if at all, has Covid fundamentally changed your business?
I can give you an example of how Covid has changed things for supermarket business in general. As Amazon announced in their [most recent] earnings call, basically Whole Foods’ online sales have tripled in the last year. So that’s a huge change. We’ve had to hire lot more people to do picking and delivery and customers are picking up at the stores. We’ve actually had some stores that we just turned into dark stores—all they do is take online deliveries. So that’s a big change. A year from now, will we still be doing that much business online? I don’t know for sure, but we might be. So that’s kind of a fundamental shift. There’s little doubt that Covid has been sort of an accelerator for online food shopping, and I don’t think that’s going to stop when we get back to normality. More people may come back in the stores when they feel like it’s safe, but I think a greater percentage of our sales from online shopping will be continuing indefinitely.
Is it possible some people never go back in the store?
I will be a little more optimistic than that. Human beings, for the most part, we are very social animals and it’s been hard on us to be so isolated, but I do think we’re going to return to restaurants and bars and food shopping. People like to shop for food—okay, not everybody, but shopping for food is fun, it’s such an important part of our lives. It’s one of our primary, if not the primary, source of pleasure that we get in living — eating. And Whole Foods has a strong element of foodies who shop our store, who want to come in and smell, taste, touch, see, experiment with new foods and they’re not doing that now. Now it’s just a transaction. But I do think that’s going to change and that will be a return to normality. People are going to come into beautiful stores because they enjoy it. It’s fun—and it’s something they’ve really missed.