CASE STUDY: The Whole Culture of Whole Foods
There's a palpable delight in the atmosphere of a business who employees are actually happy. Smiles come naturally. Help is offered without reservation. Prices may be a little steeper, but customers are less likely to balk. They know they are getting more for their money, an experience with their product. Whole Food Markets is a prime example of what can happen when you create a culture that keeps employees happy, empowered, and engaged. The organic grocery super chain booked $14 billion and physical year 2014 and currently has 414 stores in the United States, Canada, and the United Kingdom with another 100 stores under development. By 2017, the company wants to reach 500 locations the ultimate goal is to is said to be 1000. Yet despite its mammoth size and the notoriously staffing- challenged industry it occupies, Whole food has a remarkable low turnover rate about 26 percent annually compared to the 90 percent standard. It's been named one of the Fortune Magazine's “100 Best Companies to Work for every year since the list begin 1998; the distinction is earned, in large part by independent surveys of its employees. How does Whole Food keep its 87,000 + team members motivated? Founder and CEO John Mackey says it doesn't. You can't really motivate someone, he told a student audience in 2011; it’s better to focus on selecting the right people from the start, and create a “conscious culture” in which motivation perpetuates itself. If that sounds a bit philosophical, it is. Mackey studied philosophy during the 1970s the author of Conscious Capitalism, a book whose title has since become a buzzword in business Conscious Capitalism refers to an evolved capitalism, shaped by humanistic and environmental principals. This approach is not just a reflection of Mackey’s social learnings; he argues that is a smart business. Increasingly consumers want to purchase from business they can feel good about. And Whole Food principles are aligned with the desire of the millennial workforce to make a difference in the world they help Whole Food attract motivated, high- quality employees.
Mission (Not Profit) Driven: Whole food makes money to be sure, but Mackey makes it clear that profit is not his company's primary motivation. It’s telling among the whole food eight core values, only one of them is tied to the quality of performance of the physical goods in consumers grocery carts and there is not a single mention price of convenience (compared that to the focus of a traditional grocery train like Safeway). Although “We create wealth through profits and growth” gets the number four spot, the other core values focus on ethical pursuits: sustainable and ecological farming practices, fair trade, and helping the community. In this way, Whole Foods positions itself more as a leader of a food/ product movement rather than a simple food product/ provider.
Employees and Stakeholders: investors are important, but Whole Foods stresses they are not the most important of stakeholders. For Whole Foods stakeholders is defined broadly: it means anyone has an investment in what we do or sell, which includes customers, employees, suppliers and the communities within which they operate. Decisions are made ideally with interests of all stakeholders in mind, not just those of the investors as is case in traditional capitalism. And to keep its employee stakeholders happy Whole Foods aims to empower them: employees at every level have input on decision about policy including benefit options, plus product offering and more. Robust compensation doesn't hurt and a stock option plan is available to workers at all levels, even the front-line staff manning cash registers or stocking shelves. A whopping 94 percent of the company's stock option are distributed to non-executives. At the same time, Whole Foods open book policy gives team members access to the firm's financial records including compensation information for all associates, including the top management team and the CEO. Since 2007 Mackey himself earns a symbolic $1 per year and executive may have made no more than 19 times that of the lowest paid associate (the US average for top executive- to- worker pay ratio is 30:1). Together, these policies help to enforce a shared identity under which everyone feels equal in valued. Other stakeholder -benefiting programs include distribution of 10 million and grants to small food produces each year. Whole Food holds seminars that teach small farmers and producers how to get their product onto its shelves. The company also donates 5% of the annual profit to a variety of nonprofit and community organization. Cultivating Conscious Leadership: From empowering employees with fair pay, ample benefits and decision-making power, to grant that benefit small farmers Whole Food aims to be a corporation with a conscious.
Case Questions:
1. What role does personal motivation play in Whole Foods success?
2. How does Whole Foods help employees fulfill the needs in Maslow’s Hierarchy?