Whole Foods Market Inc. Co-Chief Executive Officer John Mackey said employees, not shareholders, need to be the first priority for businesses.
“I really don’t think shareholders should come first, I think it’s fundamentally a bad strategy,” Mackey said yesterday at a Captains of Industry series interview with Norman Pearlstine, chief content officer of Bloomberg News. “Happy team members result in happy customers, happy customers result in happy investors. If you put shareholders first, you won’t get there.”
The event at the 92nd Street Y in New York was sponsored by Bloomberg Businessweek.
Mackey, 59, a self-styled “conscious” capitalist and longtime nonconformist, has written a new book in which he criticizes companies that focus solely on maximizing profit. The book, “Conscious Capitalism,” was released this week.
In the book, Mackey and his co-author, Raj Sisodia, a Bentley University marketing professor, discuss ways to create value and lift people from poverty. Mackey’s bottom line: making money need not be a zero-sum game.
“Business has got to rediscover its higher purpose,” Mackey said in the interview.
The college dropout co-founded a natural-foods store in Austin, Texas, in 1978 with his then-girlfriend, Renee Lawson Hardy. The store was called Safer Way, a spoof on the Safeway Inc. chain, which operated supermarkets nearby. Two years later, Mackey and Hardy merged their company with two other grocers to form the original Whole Foods.
The company began expanding beyond Austin in 1984 and acquired regional grocery stores and chains in the 1990s. Sales rose 16 percent to $11.7 billion in the fiscal year ended in September, the third straight year with revenue growth of at least 12 percent. Since the grocer went public in 1992, the shares have soared more than fivefold.
Mackey says he practices what he preaches at Whole Foods by capping executive pay at 19 times the company’s average hourly wage. For the four years through 2011, he earned $1 in salary and received no bonus. Whole Foods has no corporate jet.
In the book, Mackey and Sisodia write that Costco Wholesale Corp., Google Inc. and Southwest Airlines Co. also practice conscious capitalism.