Whole Foods’ return to its healthy roots – 5 lessons learned

Whenever I visit the local Whole Foods market in Bend, I get a craving for junk food.
When I walk into the store, I am immediately surrounded by 500 square feet of sugary snacks, pastries, and candy.  Wine and sugar are my two vices, so this is not good.

Whole foods logo

Instead of viewing the company as a whole foods emporium, I want to call them  “Hell Foods.”  Given their recent financial performance and new competitors (Trader Joe’s, Costco, and Target), is it possible that their strategic growth and positioning has run amok?

I believe they have. That’s why I was relieved to see John Mackey’s quote in Friday’s Wall Street Journal:.  We can all learn some strategy and leadership lessons from his announcements:

“(Beginning in the fall), we’re going to begin a Healthy Eating Education initiative. We’ve just added a seventh core value (to the company’s mission), which is Healthy Eating. Basically, we used to think it was enough just to sell healthy food, but we know it is not enough. We sell all kinds of candy. We sell a bunch of junk.”

I have been keeping track of Mackey’s performance as a CEO. When I studied his use of social media in my book, I observed a complete lack of judgment when he created anonymous posts in Yahoo! Finance under a bogus name.  He chose to use this online forum to berate Wild Oats Market and was accused of using his online comments to bolster Whole Foods’ stock price.  This was happening at an inportune time–while Whole Foods was negotiating a takeover of Wild Oats.  This caused the company to take their eye off the business to ward off an FTC and Board investigation.

In my opinion, Mackey’s latest announcement–which he refers to as “leading a revolution in healthy eating”–teaches us several things:

1. Taking a risk just might boost your company’s brand and stock performance.
2. We need more CEO’s like John too put their money where their mouth is when it comes to making a difference.
3. Changing your strategy–or returning to your original core strengths–is often necessary to help your company thrive. Jim Collins originally called the art of focusing onwhat you’re good at the “hedgehog concept.”
4. Creating a wealthy company is not about maximizing revenues and serving everyone.  It is about fulfilling an unmet need, and being rewarded handsomely for it while making a positive impact on the world. Sometimes that means scaling back–and that is okay.
5. Examples of CEO redemption never go out of style. And redemption is tasty fare in American business folklore.

For more on Mackey’s original social media faux pas, check out chapter 11 in my book.


Copyright 2009, Lisa Nirell.  All rights reserved.


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