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Who Advises John Mackey?

Posted by: Diane Brady on July 13

Did anyone try to get John Mackey to, say, tone down his blogs or stop posting anonymously on message boards for years? Did the CEO of a publicly traded company ever think to consult his lawyers before making the posts—especially as he set out to roundly trash the competition? My guess is no, because he’s now trashing the FTC, too. The same group that has power over whether Whole Foods gets to buy rival Wild Oats.

Mackey’s defense of his actions in posting anonymously about Whole Foods and its rivals on Yahoo! boards is another example of what not to do in crisis management. The FTC is reviewing your bid to take over Wild Oats. It comes across anonymous emails that you posted about Wild Oats under the name ‘rahodeb’. And what is your response? Stated Mackey: “They are quoting rahodeb in some of their legal documents and no doubt seek to embarrass both me and Whole Foods through these disclosures.”

So now Mackey appears to be casting the FTC as a biased organization that sets out to embarrass the people it reviews. Surely, that’s not the wisest course of action when they’re deciding if you can buy Wild Oats. Where is the rest of the Whole Foods’ team on this one? Where is the board?

Whole Foods’ official statement (which is all you can go by as executives are not talking to the press) is equally forgiving of its CEO. “There are no company policies regarding posting on public bulletin boards and no laws were violated.”

Mackey needs a better support system. Strong CEOs often realize that they need a strong team to act as a reality check on their behavior.


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Reader Comments

Thomas

July 13, 2007 11:43 AM

Diane,

About John's criticism of the FTC. The FTC works with sophisticated financial models to make their determination. His anonymous posts were a supporting factor and plausibly show executive bad intentions but hardly the reason behind their decision.

As I mentioned in my earlier comment, John needs to relax and stop attacking. It serves no purpose, promotes animosity, and hinders progress. Ultimately however whatever he does is his own decision and the board either accepts it or doesn't. For now at least the board agrees with his position.

Many of us who like John like him because he didn't seem to run to his company lawyers or craft long, boring, meaningless corporate-speak. If you have something important to say, why filter it? I don't think there's any law for trashing your competition especially if you can make a reasonable case for your position. If a CEO does that, then he or she would get me interested in the stock. I'd think here's a person with purpose, intelligence, and passion. That's what John got. He neither needs his lawyers to sanitize his message nor needs anonymity to sell it. Unfortunately the latter -- not the former -- hurt him.

Thomas

Abc

July 13, 2007 01:08 PM

I do not see anything wrong with what Mackey did. The media seems to be blowing it out of proportion.

Bill

July 13, 2007 01:52 PM

Abc must be another alias of Mackey's. Sure, once again the "liberal" media is blowing it out of proportion. They obviously hate America.

Eric

July 13, 2007 02:24 PM

Kudos Diane on your insight.

It's best that Mackey not talk to reporters. The less he says at this point, the better for him.

As for the company statement "no laws were violated," it would be instructive to get a clarification whether this is a legal opinion from the company's counsel (as opposed to the PR position) and whether it was issued before or after Mackey wrote his postings.


Scott

July 13, 2007 05:27 PM

Thomas wrote: " I don't think there's any law for trashing your competition especially if you can make a reasonable case for your position. If a CEO does that, then he or she would get me interested in the stock. I'd think here's a person with purpose, intelligence, and passion."

Umm, but if you're doing it anonymously? What if someone came to you and kept telling you Coca Cola was bad, the company sucks, it's stock performance and management are terrible, etc. etc... you might say, "wow, this person is pretty passionate about how bad Coke is." You might take it or leave it. You might think about some of it.

But what if you find out later it was Pepsi's CEO? Undercover, no less? Would you - or should you - even consider it as having any real weight in unbiased opinion? Of course not. And, I bet you and others would be just a bit indignant about being manipulated. You don't see it that way because you are obviously a friend or colleague of Mr. Mackey, but it is what it is - pretty stark deception.

Dave

July 14, 2007 06:23 AM

John Mackey's lack of an inner compass does not bode well for Whole Foods or its future. Why entrust such a mini mastermind with our food or trust.

Mary

July 14, 2007 10:05 AM

My first thought when I heard of Mackey's blogs was that he "with malice aforethought" was attempting to drive down the price of Wild Oats stock and/or its attractiveness to investors/consumers in preparation for his buyout offer. I'm sure the SEC is considering this possibility.

Derek

July 14, 2007 10:33 AM

Well yes, excuse a man for speaking his mind, even if its in conflict with the governing bodies. So essentially your point is: deny the feelings inside of your heart and head in order to appease another agency. Always an intelligent move to stand up for something you believe in.

Wait, there was a typo - I said "your point is." As with much of the media around this, there is no point except hearing yourself complain.

If the FTC denies the merger on the grounds that they've set up for business in this country, so be it. There are rules to be played by. But to criticize a man for criticizing the process is to ask him to take part in the constant, cold calculations of a business mind. And fault or no, Mackey has built his business upon speaking from his heart. Let a man have that emotion; obviously, many of us do not.

Shelley Huddleston

July 16, 2007 12:14 AM

It appears to me that John Mackey is simply exercising his right to free speech- be it under a pseudonym or not. I'd like to know how others could be "manipulated" by an opinion. It doesn't matter if someone is telling me how horrible a company is or seems to be- I will investigate it and make up my own mind.

There are plenty of CEO's who trash their rivals in public, private, or incognito. I'd only be manipulated out of my own consent- others opinions are still only opinions.

Someone in the FTC is very sore about something that Whole Foods did in the past...

Hunter Shannonhouse

July 17, 2007 09:02 PM

It is obvious that Mackey has essentially misled (to put it nicely) and intended to manipulate. Is this an issue about free speech and speaking from the heart? Or is this about integrity and honest leadership?
1. What's good for the goose... I agree with the person in this blog or elsewhere who put the question, would the board or Mackey himself put up with this type of behaviour from someone else in the company?
2. And what about the shareholders? What responsibility does Mackey have for NOT cynically risking their money?
3. Three cheers for Mackey's blog misbehaviour being exposed. This helps demonstrate the value of ethical Web 2.0 participation and the speed of retribution for unethical behaviour.

Beth

July 23, 2007 01:04 PM

John Makey is a terrific guy. He is personally committed to alleviating world poverty and was quick to change his stores' policies on where they get their meat when it was brought to his attention that some of his providers were using inhumane animal farming practices.
He has started two foundations - one to support microcredit (Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize last year for pioneering this method of poverty alleviation) and the other to support humane animal practices in the meat industry.
His impulses may lead him to speak out impulsively sometimes, but they also lead him to do good in the world.

mxhp

August 4, 2007 04:09 PM

None of us is above a humbling experience, but maybe this was a good thing for bringing Mackey down to earth, eye to eye with the little people, who he has long talked of empowering.
You can't really empower people when you tower over them. I guess we can all learn vicariously from his error.
Whole Foods has suffered seriously in the last 6 years with big-headed executives, that was a climate that came from somewhere.
But, to be compassionate, it's hard to keep your head down to earth when there are hundreds of noses poking from underneath...how can someone function like that?
I worked for Whole Foods from 2000 to 2007 and watched the transition from a good company and happy employees to a morbid place of gloom and doom where everyone absolutely hated their jobs.
This was a pretty direct result of hiring executives from outside the company--young upstarts long on theory and confidence, short on experience, all of a sudden directing people who had toiled for a decade in the stores.
That in itself destroyed morale.
There was also a cult climate; the unspoken command was "don't rock the boat" and only high conformity was rewarded.
The whole thing actually morphed into the opposite of all its good intentions.
It became a fascist state of the "star" executives who controlled from an ivory tower all cloaked in the endless blather about core values that was really just talk.
Meanwhile, the deep and unaddressed unhappiness of all the employees who were stuck, having families and already invested for a decade or more, just festered beneath the surface like a black cloud.
I watched a lot of enthusiastic, creative people get beaten down in the system, and finally reach the only sane point: "I just don't care anymore," really became the mantra of all the workers...while the stars clammored to suck up to Mackey.
It was an interesting study in the result of shifting control from the local to the regional, the result was a quagmire, no creativity, a doomed morale, and an inability to address any of it.

mxhp

August 4, 2007 04:21 PM

P.S. I guess the main thought I had in writing was in response to the very last post: Mackey seemed very keen on surrounding himself with "yes" people. He talked the whole talk about empowering others and getting feed-back, but he created an alternate reality where he was God-like, and maybe became a little addicted to hero-worship. The whole company was neurotically possessed by this.

mxhp

August 7, 2007 09:10 AM

Maybe this discussion has already passed, but my conscience is nagging me. It is easy to anonymously trash anyone on the internet. I don't want to do that.
I stand by the truth value of what I previously said as Mxhp. But I don't believe the solution is writing off John Mackey or Whole Foods.
He set out to create a new structure of power, and found the forces just gravitated to the old.
Maybe the test now is to correct it and be true to the original intention, and understand it is a work in progress,
but that would depend on a willingness to view flaws accurately.
Whole Foods used to have stores brimming with local culture. They hired a CEO from Safeway who decided all the stores should be mostly homogenous. I think maybe he should have still been receiving a pay-check from Safeway, because that decision did more for Safeway than Whole Foods.
Another factor that cannot be measured on a spread sheet with a pencil is the emotional climate of a store where people feel "I just love to shop there." That doesn't come from items being placed on the shelf indentical with every other store. That is the intangible of team member happiness.
Mackey knew this in theory a long time ago, but became out of touch with it over time and didn't follow through on that theory.
Does he know that he has some awesome people sweeping the floors? Some of them don't speak English but have shining eyes and world class smiles. How about a little "stardom" for them, as in a chance to win a vacation to Hawaii?
The people who work on the floor in direct contact with the customer, standing, pushing, pulling, cleaning, lifting...they are the bones of the business and deserve some real appreciation and reward, not just lip service.
I witnessed also excellent quality in store leadership, kindness, fairness, a willingness to listen.
Maybe if there was more confidence in that leadership there wouldn't be the drain of over-paid executives who largely create a vacuum.
This is a philosophical issue between states' rights and federal control, it doesn't work with government, and it doesn't work in large corporate entities: what you get is "corporatese", in a word, inefficiency, and a tone and quality as dead as muzak.
I'm not saying there shouldn't be guidelines and budgets, just not a strangle-hold.
The point I wanted to make is I don't believe Mackey should resign, I believe he should re-define the problem and step up to follow through on his original ideals, and bring them down to earth for real.

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How can you manage smarter? BusinessWeek writers Diane Brady, Michelle Conlin, Nanette Byrnes and Jena McGregor synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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