Who Is John Mackey?

Many people have become familiar with Whole Foods Market's (NASDAQ: WFM  ) founder and co-CEO John Mackey because of sound bites blared in media headlines. He called climate change "not a big deal." He quoted Britain's Iron Lady, Margaret Thatcher, in a Wall Street Journal op-ed about health care several years ago, and has been known to mention hot-button words like "socialism" and "fascism" to discuss American policies. And a long, long time ago he made an off-color joke about unions.

Unfortunately, given the political climate in our society these days, some of these quotes have occasionally angered and alienated people, causing them to put their metaphorical earplugs in and ignore what Mackey has to say on important topics.

Here's a topic that's less discussed, though, because it's a true paradigm shift from the way many people think in the first place. Mackey talks a lot about love and caring, and how "conscious capitalism" is a movement that can save our economy -- and the world -- from many of today's problems.

Love can vanquish evil
Conscious Capitalism: Liberating the Heroic Spirit of Business, the recently published book co-authored by Mackey and Raj Sisodia, outlines a philosophy that delivers the overdue reminder that capitalism is not always and doesn't have to be "evil."

The book acknowledges the reasons that it's gotten a bad rap. Having been inundated with bad corporate actors, as well as what Mackey calls the "cancerous" developments that metastasized on Wall Street, it's easy to dismiss hopes that positive commerce can boost economic progress for all. (Click here for a recent clip from an interview on this and other topics right here at Fool HQ.) This attitude comes despite the fact that there are plenty of businesses that care, even big corporations, and they're taking into account many stakeholders, not just shareholders.

This is the promise of conscious capitalism, which is geared toward long-term evolution, not the unaware, cutthroat environment of short-term thinking that has poisoned the well here lately.

Despite his occasionally controversial comments -- which in my opinion actually speak to his authenticity as a human being, not a cardboard cutout like most CEOs and politicians -- Mackey is the type of individual our society seems to lack these days: widely read and informed.

The book mentions and draws from the wisdom of many disparate thinkers, past and present: Plato, Adam Smith, Milton Friedman, Abraham Maslow, Erik Erikson, Martin Luther King, Jr., Daniel Pink, Gandhi, Peter Drucker, and many others. One of the most important things the general public may not know about was Mackey's triumphant argument against Friedman's well-known dogma: that profit is the only "social responsibility" of business.

Obviously, one can view capitalism in a different, more loving, way.

What is conscious capitalism?
At their core, conscious businesses operate with a higher purpose than simply making money -- addressing big questions about the world and our contributions to it. These are companies that take a holistic and systemic approach to operations, and they create value not only for themselves and shareholders, but for all stakeholders.

As the book describes in depth, conscious businesses operate based on four tenets: Higher Purpose; Stakeholder Integration; Conscious Leadership; Conscious Culture and Management.

Conscious Capitalism describes a lofty dream for the future of the movement: "One day, virtually every business will operate with a sense of higher purpose, integrate the interests of all stakeholders, develop and elevate conscious leaders, and build a culture of trust, accountability, and caring."

Are there any conscious businesses?
Conscious Capitalism gives plenty of examples of conscious businesses and how they interact with the world. Obviously, a lot of the book deals with Whole Foods Market and Mackey's journey to becoming a conscious capitalist, but here are a few other examples.

Costco (NASDAQ: COST  ) fits into the area given its stellar treatment of workers and low turnover. The book pointed to a time when Costco paid its workers double Wal-Mart's wages to its own employees; Costco also covered a whopping 98% of workers' health care costs.

The airline industry is among the most scorned, but Southwest Airlines (NYSE: LUV  ) proved an example of one of the few airlines whose caring ways make it a part of the conscious business universe. It's well known for having happy employees and providing a great experience for customers.

Most people aren't fond of trash, and Waste Management's (NYSE: WM  ) old and fairly uncool tag line was "Helping the world dispose of its problems." Sustainability actually posed a threat to Waste Management, given reduced waste, but the book discusses how management actually increased consciousness and embraced the change. Waste Management now mines for value in our waste stream, with cool ideas like waste-to-energy and recycling, complete with high-tech equipment that separates comingled recycling.

Medtronic (NYSE: MDT  ) former chairman and CEO Bill George is so simpatico with the message of Conscious Capitalism that he penned the foreword, describing his 1989 realization that his business could provide value for all stakeholders, most poignantly the value to the burgeoning number of patients "restored each year to fuller life and health from 300,000 people in 1989 to 10 million today" in part because of the company's products.

Plenty positive
For those who have followed Whole Foods Market and John Mackey over many years, much in the book won't come as a surprise. It distills and expands upon many of the thoughts he's offered in speeches, blog posts, and interviews over years' time. He's even spoken here at Fool HQ several times on related themes.

For now, the strongest message in the book -- and the most timely -- is that business can and often does do better than many think. Meanwhile, a greater evolution has already begun, through conscious capitalism as well as related theories like natural capitalism and triple bottom-line thinking. It also outlines how conscious capitalism is different from, say, corporate social responsibility.

Also, the book's conclusion deals with what many investors might wonder about conscious capitalism: Is it possible for investors to make money? The data reported shows that it absolutely is over the long term. Conscious businesses make great businesses, and investors should take note of the wisdom (and returns) this type of business is capable of producing over the long term.

Conscious Capitalism is a rare read in our increasingly polarized, politicized world: a frank discussion of problems and how to fix them that includes a message of love -- that's something you'd never hear from most CEOs. It prescribes a better, more positive way of thinking about enterprise and entrepreneurship, defends a system that has pulled many, many people out of poverty, and even provides food for thought from the spiritual, psychological, and philosophical areas.

It's a primer not only for building conscious businesses and conscious leaders, but also for pursuing self-awareness at the individual level, too. In other words, it's a positive read for these troubled times, for all kinds of people -- not just investors. So bring on the love.

More about Whole Foods
In The Motley Fool's premium report, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. We're also providing a full year of regular analyst updates to go with it, so make sure to claim your copy today by clicking here.


Read/Post Comments (18) | Recommend This Article (29)

Comments from our Foolish Readers

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  • Report this Comment On February 25, 2013, at 8:29 PM, gkirkmf wrote:

    Here are 10 differences between corporations and real people:

    1. Corporations have perpetual life.

    2. Corporations can be in two or more places at the same time.

    3. Corporations cannot be jailed.

    4. Corporations have no conscience or sense of shame.

    5. Corporations have no sense of altruism, nor willingness to adjust their behavior to protect future generations.

    6. Corporations pursue a single-minded goal, profit, and are typically legally prohibited from seeking other ends.

    7. There are no limits, natural or otherwise, to corporations' potential size.

    8. Because of their political power, they are able to define or at very least substantially affect, the civil and criminal regulations that define the boundaries of permissible behavior. Virtually no individual criminal has such abilities.

    9. Corporations can combine with each other, into bigger and more powerful entities.

    10. Corporations can divide themselves, shedding subsidiaries or affiliates that are controversial, have brought them negative publicity or pose liability threats.

  • Report this Comment On February 26, 2013, at 1:35 AM, TMFVelvetHammer wrote:

    gkirkmf,

    You're ignoring the fact that corporations in and of themselves do nothing. All of a corporations activities are carried out by people. Real people.

    Conscious Capitalism in large part is about leaders of a business creating, fostering, and ingraining a culture about more than just profits, and the importance of including all stakeholders in the rewards of doing well.

    Stop looking at corporations as evil, malevolent beings, because they are nothing more than a tool of those that are in control of the business.

    And many of them, as Alyce so often describes, are run by people that are actually interested in making a better world, and that a business can be profitable, while customers, vendors, suppliers, and shareholders also are rewarded.

    It's not a zero-sum game or a win-lose battle.

    And to address a few of your claims above:

    3: Corporations cannot be jailed. But business leaders that break laws can. And businesses can be crippled by fines. Neither happen enough but that's a product of our political environment, not corporations.

    4 & 5: Again, the people running the businesses are the key here.

    6: This just isn't true. Businesses pursue whatever the mission and goals of the company are. Many don't even have things like profits directly tied to mission statements or other corporate directives. There's just no basis in this being an accurate broad-brush statement.

    7: Ever hear of Federal anti-trust laws?

    8: I fully agree with this statement.

    Again, the things you've listed don't really bring much to this argument. I will state that our political system has become overly affected by corporate activity, but this is a product of people, mostly elected officials, passing laws that allow this to happen, while we the citizenry, were asleep in the back seat.

    Again, people have made the system the way it is, and only people can change it. Don't blame the corporations for what we've done to ourselves.

  • Report this Comment On February 26, 2013, at 6:01 AM, gkirkmf wrote:

    elihpaudio,

    Nothing Personal here... just trying to remind people that capitalists use corporations as their tool of choice, and corporations have no soul. To be conscious is the same as having a soul in my book. I see precious little movement by conscious capitalists to reduce CEO pay back to say 20 times what the lowest paid worker in the company makes... IMHO a nice chunk of the profits realized by using computers and automation in companies of the last 30-40 years has gone directly into the pockets of company executives, to the exclusion of their customers, stockholders and employees. What is needed in this country is a reining in of corporate power and executives. Until this happens, stockholders will continue to suffer with minimal returns.

    You missed 9 and 10....

    9. Ohio Bell became Ameritech became SBC became ATT after ATT was broken up 20 years before.

    10. Review the history of the Bhopal disaster.

    Your arguments are similar to the old "guns don't kill people, People kill people". I am advocating that we need laws controlling corporations similar to the semi and automatic weapons bans being considered now. Compare Sandy Hook with the actions of the banksters who brought down our economy.

  • Report this Comment On February 26, 2013, at 7:44 AM, TMFLomax wrote:

    elihpaudio,

    Thanks for your rebuttals on these points, you're very obviously very knowledgeable about this concept. I agree with everything you said here.

    gkirkmf,

    What is interesting about several of the books I've read recently is that despite popular belief (and this popular belief IS strong) there really isn't much of an enforceable mandate for corporations to simply "maximize profit" and ignore all other responsibilities. Much of these types of situations do have everything to do with leadership (by real human beings).

    This book does delve into a lot of our problems including the fact that we currently have something closer to "crony capitalism" than anything that's really letting free enterprise flourish. That makes a huge difference in how corporations (and people) have behaved.

    Thanks for the thoughts. It's a great book to challenge some of today's conventional wisdom, a LOT of which could use some challenging. That capitalism requires sociopathic behavior is simply not true, despite many bad actors here lately.

    Best,

    Alyce

  • Report this Comment On February 26, 2013, at 9:15 PM, TMFTomGardner wrote:

    gkirkmf et al,

    My question is -- what organizational structure cannot be used for evil? Governments start wars; historically, they have lacked financial oversight and accountability; for all the debate over levels of taxation, the true sham is the incredible lack of basic financial accounting and transparency. All of this says nothing of the US government's willingness to tolerate lobbying that walks and quacks like a duck called bribery. I can list out many more than 10 ways that government is a tool used by people to take advantage of others.

    Other organizations -- churches, non-profits, unions, etc -- their histories are littered with fraud, cruelty, secrecy, and all the outcomes of our baser human nature.

    I simply don't see how or why corporations should be singled out. What needs to be studied more carefully are the philosophical underpinnings of the structures AND the best ways each structure is being used to benefit our families, our country, our world, the universe.

    What John Mackey offers here is a truly beautiful philosophy for how to better use the structure of a corporation to advance the interests of every stakeholder. Most of the media has missed that this is the story of the book and his life's work -- which has advanced the world toward greater enlightenment in how to eat, how to source food, how to treat employees, how to strengthen suppliers, how to make the world just a little bit better.

    Tom Gardner

  • Report this Comment On February 26, 2013, at 9:43 PM, TMFLomax wrote:

    Thanks Tom -- very well said and good point -- it absolutely does bear noting that all of the organizations you listed are capable of just the same kind of abuse that corporations are often perceived as having the corner of the market on.

    And of course the government influence these days is part of that aforementioned cronyism/corruption.

    Thank you for saying that so eloquently.

    Alyce

  • Report this Comment On February 27, 2013, at 1:02 AM, TMFTomGardner wrote:

    Case and point. This woman was not heading up a corporation.

    http://mobile.reuters.com/article/idUSBRE91Q03N20130227?irpc...

  • Report this Comment On February 27, 2013, at 10:19 AM, TMFLomax wrote:

    Another issue that I've touched on in past articles and relates to this discussion is how often union demands pretty much bankrupt companies and other entities (it happens in the public sector too) due to disconnects with economic realities. It is not pro-worker, pro-economy, or pro-human being to build a situation that ends up in people losing their jobs, but there are certainly people out there who believe "corporations are always evil" and "unions are always good." That's very one-dimensional thinking, obviously.

    It's that kind of politicized us versus them thinking that is seriously destructive these days. There are truths that people refuse to acknowledge because they don't want to draw the parallels or use the critical analysis and instead draw things in black and white. This book is a great way to start thinking more critically about responsibilities, whether we're talking about corporate citizens, personal choices, and otherwise. Thinking how short-term actions effect others is often lacking in many areas. Conscious Capitalism's holistic approach DOES take the well-being of others into account.

    Alyce

  • Report this Comment On February 27, 2013, at 11:23 AM, ScottAtlanta wrote:

    Hah. I'm just going to do a disjointed "rant" here b/c I don't want to waste my time creating a post to concisely address all this non-sense. Here goes:

    "Conscious capitalism," this reminds me of another apologists phrase..."compassionate conservatism," which was basically an endorsement of harsh policies that condoned abandoning society's most in need. It allowed rich people to feel good about their greed. "I respect you enough to let you choose to live in the gutter," ignoring all the forces of history (political and economic, societal) that put the person in the gutter to start with.

    Being so vague as to cast the net of "structures" to place Corps along side of Unions, Churches, Governments....is ridiculous, not insightful. Perhaps it's clever to try to point to bad examples in all groups to say they're all the same. The very nature is inherently different, or should be. By definition, Unions, Churches and Governments should be "for the people," that is, their objectives are to improve the lives of the people they serve, even at their own expense. The definition of a for-profit Corporation is the opposite, it's goal is to maximize profit. Perhaps it gives its workers good compensation to avoid turnover b/c it realizes that turnover costs more. But as soon as those workers can be replaced with robots (automation), forget it, they're gone. Profits weak? Cut workers to streamline. This is classic Corp behavior that is rewarded with increased stock prices.

    What you've done with the dismissive, "they're all structures" argument is conflate Power abuses with true Purpose. Power abuses can happen anywhere, that much is true....but that does not negate the Purpose of the organization.

    Everyone wants to "have their cake and eat it too." So you want to support Capitalism and feel good about it? Then conjure up examples of a soft capitalism that supports its workers. Of course you're going to find examples, of "conscious capitalism" it's actually just smart capitalism b/c you can't maintain profit if you exploit your worker beyond a living wage (there's more of them than you and they'll overturn the applecart -- either civilly or in revolution or initially, passively as the consumer economy crumbles b/c the worker is your consumer).

    By the way, the local Whole foods took out the public water fountain at the bathrooms -- so you don't even get a free sip of water, you have to buy a bottle of water if you're thirsty.

    How very conscientious of them.

  • Report this Comment On February 27, 2013, at 1:42 PM, hbofbyu wrote:

    Read "People of the Lie" - it is a little disjointed but the author talks about his assignment by the Surgeon General to investigate the My Lai massacre from a psychiatric angle and how normal 18 and 19 year old American boys could come together and murder defenseless women and children.

    His conclusion is that there is institutional evil. All institutions have it and are capable of it to varying degrees (churches, schools, unions, clubs, governments - local and national). The larger the institution the more capabilities, power and potential it has for evil (as well as good - I would add). The evil doesn't have to be intentional by any individual - it can be a result of policy taking precedence over individual accountability.

    I think John Mackey is on to something good.

  • Report this Comment On February 27, 2013, at 1:55 PM, loat98 wrote:

    Excellent article, Alyce. Corporations that have as a singular objective -"to increase shareholder value" (I.e., maximize profit) have a short sighted vision for their business and for the society it sells it products and and services. Thanks for pointing out (in this and other articles) that broadening corporate objectives to include benefiting all stakeholders creates great long term investments.

    I don't care if you are writing your articles in the back of a 60's VW bus (as one commenter to another article recently said), keep up the concsious provoking work!

  • Report this Comment On February 27, 2013, at 8:50 PM, TMFLomax wrote:

    loat98,

    Thanks very much for reading and for the note -- and someone actually said I'm writing my articles in the back of a '60s VW bus? LOL, I missed that -- that's excellent! ;)

    hbofbyu,

    I actually have read "People of the Lie." Fascinating -- and creepy. Psychology often ignores/fails to address the nature of evil (or even that there is evil, just illness) but I found it so interesting that it was by a psychologist who acknowledged it, had seen it in individuals, etc., and actually wrote about it. Fascinating stuff. Yep, institutional evil can and does exist (corruption, and onward to worse things), but we as individuals can choose good (as can people involved in corporations or anything else). "Conscious Capitalism" philosophy IS indeed about choosing good.

    Thanks for the thoughts!

    Alyce (not writing from the back of a VW bus)

  • Report this Comment On February 28, 2013, at 2:56 PM, loat98 wrote:

    I haven't read anything from Scott Peck since "The Road Less Traveled". Will try to get re-tuned into him again. But first, Conscious Capitalism. Thanks

  • Report this Comment On March 02, 2013, at 10:49 AM, clout51 wrote:

    In my humble experience working for a few different corporations, I found that they were generally concerned with the welfare of their employees and the communities they operated in. The leadership was concerned with doing what was right and fair in most cases. I find it hard to swallow when corporations are singled out for evil when in reality it is uncontrolled gov't that is the most evil. Gov't is force, pure and simple, and it exists to enlarge itself and it's power as much or more than any corporation.(Try not paying your taxes and see how friendly gov't is, or if you don't think gov't is force have you heard of Waco, or Ruby Ridge, or check out the number of SWAT team events that occur each day in the USA.) That is why our founders gave us a constitution whose primary purpose is to limit the size of gov't and provide a framework where individual freedom and true capitalism could flourish. The problem is we have allowed, by electing politicians who don't abide by the constitution, our gov't to intrude massively into our capitalist system. So much so that what we practice in this country isn't capitalism at all, but what many refer to as crony capitalism, whereby in order to exist and make a living corporations or individuals, have to pander to corrupt politicians, with their overburden of interference and overregulation, disrupting the benefits that true capitalism would provide. I've never had a corporation force me to do business with them. Only the gov't does that. No corporation has ever saddled me with $50,000 of debt like my gov't has. That's the amount of debt each American owes towards the national debt, not counting SS/Medicare. Corporations don't start wars, gov'ts do. I'd say on balance you have more to fear from your gov't than any corp.

  • Report this Comment On March 02, 2013, at 1:30 PM, MariaFolsom wrote:

    "Conscious capitalism" is a redundant phrase. To use this phrase implies that raw capitalism is not "conscious." There is NO CONFLICT between a corporation's goal to make money and to treat its workers humanely or respect the environment. That is what makes money! When customers 'vote with their dollars,' they are rewarding such 'conscious' companies. No need for another qualifier, John Mackey, that confuses the masses. Capitalism is what it is - free trade within the rule of law.

  • Report this Comment On March 06, 2013, at 12:17 PM, stanbaran wrote:

    Love the ideas but can't stand the man. Anyone who first calls the President of the United States a "socialist" and then a "fascist" (make up your mind, John!) just because he doesn't agree with bringing this country into line with the health insurance policies of the rest of the civilized world is just flinging around absurd accusations and betraying his ignorance of what those terms actually mean, and that fatally taints any ideas he happens to have. So, "conscious capitalism" but not "conscious health care"? Whatever, John...

  • Report this Comment On March 17, 2013, at 3:19 PM, hightimes1 wrote:

    The only question we ought to be asking about our friend Mr. Mackey, here, is whether or not he genuinely believes all that dribble he's calling "conscious capitalism". Conscious corporations operate with a higher purpose than simply making money, and our government ought to get out of their way so that they can operate as the well intended business entities they are or, at least, deep down really want to be. If I thought that the man was just lying, I'd at least get a chuckle out of this baloney he's serving up. But, I watched his discussion of conscious capitalism on C-Span's Book TV and I came away suspecting that he actually believes what he's saying. And not just that corporations could and ought to serve higher interests than just making the greatest profit possible, whatever the costs, but that he actually believes it would happen an a meaningful scale, if government would just give those corporations a break by relieving them of all that burdensome regulation. Really, Mr. Mackey?

  • Report this Comment On March 29, 2013, at 2:18 PM, thidmark wrote:

    Humans are inherently evil. Without proper checks and balances, any organizational structures involving them will tend to share that trait.

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