Whole Foods' John Mackey Champions Conscious Capitalismhttp://www.fool.com/investing/general/2012/10/16/whole-foods-john-mackey-champions-conscious-capita.aspx Sara Murphy, Murphy
October 16, 2012
Whole Foods (Nasdaq: WFM ) CEO John Mackey was a keynote speaker at UBS' recent "Q-Series Inflection Points Towards Sustainability" conference. At the conference, Mackey delivered an impassioned speech to financial executives, championing capitalism as a driver for social progress. Mackey serves as a powerful example of how business leaders can and should use their vaunted positions to improve more than just short-term earnings.
Capitalism breeds prosperity
Two hundred years ago, Mackey pointed out, 85% of people lived on less than $1 a day in today's dollars. Considering the world's astonishing progress since then, he thinks abject poverty will end in our lifetimes, thanks to free-enterprise capitalism.
Mackey asserted that capitalism is not a zero-sum game, and that is the magic in it: Business can create value for society as a whole. "The problem is not inequality of wealth distribution, but inequality of capitalism distribution."
Capitalism's branding problem
The purpose-driven business
Mackey cited Southwest Airlines (NYSE: LUV ) as an example of purpose maximization. "They democratized the skies," he said, by following their purpose of giving people at all economic levels the freedom to fly. Mackey points out that Google (Nasdaq: GOOG ) didn't even exist 15 years ago, and now the company is a global force because it followed its purpose to organize the world's information and make it easily accessible.
Mackey puts purpose at the center of everything Whole Foods does, and it radiates to every other aspect of the business like spokes on a wheel. "The limiting thought is that business is all about trade-offs," he said. "The genius of business is that it's win-win for everyone."
"Suppliers are the forgotten stakeholder," Mackey said. Squeezing suppliers is companies' typical game, but Mackey sees suppliers as the best-kept secret to competitive advantage. "You have to think of your suppliers as part of your family."
Furthermore, Mackey believes companies should see themselves as a citizen of the communities in which they operate, and that instead of pursuing philanthropy for the sake of public image, corporate leaders should view community investment as a process that creates value for the business and its stakeholders. Mackey says the result is an increase in shareholder value.
Mackey also strongly believes that companies should be sensitive to their effects on the environment. "The environment is the silent stakeholder. It's the only one that can't complain," Mackey explained. "Most environmental harm is done inadvertently as a consequence of creating value. The question is: How can we be a force for environmental healing, rather than a force for environmental depletion?"
Mackey points out that even Wal-Mart (NYSE: WMT) has starte