John Mackey: “Conscious Capitalism” | Talks at Google

CHADE-MENG TAN: OK, Good
afternoon my friends, welcome. My name is Meng, I’m the Jolly
Good Fellow of Google. And I’m so honored and delighted
to introduce my amazing friend, John Mackey,
co-founder and co-CEO of Whole Foods Market. There is so much I can say
about John that I cannot squeeze everything into a short
introduction, so I’ll just say three things. The first thing is I’m
tremendously grateful to John for founding Whole Foods and for
setting up a store half a mile from my house
in Cupertino. So my wife and I and all our
friends– we all love Whole Foods, so thank you
so much John. The second thing I’d like
to say about John is how impressively successful
John is. Under John’s leadership, Whole
Foods Market grew from a single store in 1978 to a $217
billion company with more than 347 stores and 373,000
team members. John has been named Entrepreneur
of the Year, Tastemaker of the Year, one of
the best CEOs in the world, Businessperson of the Year,
one of the most inspiring CEOs, one of the greatest
entrepreneurs of all time, and so on, and so forth. So just amazing, but more
important than his amazing inspiring success is all
of good that John has done for the world. John is a visionary and a
pioneer of the conscious capitalism movement. He believes, and more
importantly, he demonstrates, that capitalism, when grounded
in ethical consciousness, can be a force of good
for the world. His own company for example,
Whole Foods Market, has been named one of the best companies
to work in for at least 15 years. It was named America’s
healthiest grocery store. It’s one of the nation’s top
green energy leaders. It’s one of the world’s most
ethical companies and again, so on and so forth. John himself has created
initiatives to help end poverty in developing countries,
and Whole Foods Market was the first national
grocer to set and implement standards for humane
animal treatment. And the list goes on and on,
all the good that he’s done for the world. And John himself receives a $1
salary and he forgoes stock options and bonuses. And he continues to work in
Whole Foods for passion and purpose and to make a difference
in the world. And if anybody asks,
I earn more– my bestseller is higher than
that of the CEO of Whole Foods and Google combined. And with that, my friends,
please welcome my friend, John Mackey. JOHN MACKEY: Chade-Meng, I hope
that you’ll do some more introductions for me
as I travel around on this book tour. And I’m supposed to stay on this
blue, in this blue box. If I start to wander, somebody
tell me I’ve crossed over. So my first time to
visit Google– Google’s actually featured
in the book quite a bit. I consider it one of the most
conscious companies in the world, if not the
most conscious company in the world. And it’s been very inspiring
to me personally for a number of years. So and just having lunch
here, I’m vegan– I got a vegan, no-oil
meal that was tremendously delicious. I really felt like it was better
than possibly Whole Foods Market, but I cannot
actually say– oh my god, it’s going on YouTube. Holy smokes. It’s almost as good as
Whole Foods Markets. Anyway, I appreciate you
coming out today. I’m on this huge book tour,
20 city book tour, promoting our new book. My co-author, Raj Sisodia,
market professor on my book called “Conscious Capitalism.”
And I thought about, I didn’t actually– as I only had 20 minutes to
talk, and so mostly for Q&A, so I’m not making a formal
presentation. ‘ But I think I can tell you the heart and soul
of the book in 15 or 20 minutes and maybe
even less time. So the basic premise of the book
is that capitalism is the most extraordinary system of
social cooperation and value creation that the world
has ever experienced. And business has a very bad
reputation in the world. Business, the narrative about
business has basically been captured by the enemies
of business. Business has always had enemies,
and it’s mostly intellectuals and the elites
that rule society. And business has been portrayed
as selfish and greedy and exploitative. Basically, a phenomenal
statistic like 98 to 99% of all the murders you’ll ever
seen on television or on movies is committed by business
people, primarily businessmen, when in fact, in
reality, of course they produce far less than 1% of
the numbers in the world. But the greedy businessperson is
the one who, after he kills people, he dumps his
environmental toxins in the little rivers and is basically
just a horrible person. And that’s how business
is portrayed. And in doing some research for
the book we found some fascinating statistics,
which we talk about in the first chapter. First of all, 200 years ago
when capitalism and the Industrial Revolution both
began, 85% of the people alive on the planet Earth, 85% lived
on less than $1 a day, and that’s in today’s dollars,
not dollars back then. Today, it’s down to 16%, which
is still too high, but if you look at the trend lines, if
humanity continues embrace some type of free enterprise
capitalism or some version of it, we will wipe out
poverty in the 21st century across the world. People in this room, because
I’m looking at a very young audience here, you will live
long enough to see poverty wiped out, if humans can
keep it together. 200 years ago, over 90% of
everyone alive was illiterate. We lived in a sea
of illiteracy. Today, it’s about 12%. Just 100 years ago, there were
no universal democracies anywhere on the planet. Why? Because women didn’t have
the right to vote. Today, 50% of the countries on
our planet are universal democracies. 150 years ago, slavery was still
legal in 14 of the 29 states in the United States. 50 years ago, there was no
environmental consciousness on a mass scale until Rachel
Carson’s book “The Silent Spring” was written that
sort of awoken it. 50 years ago, we lived in a
racially segregated society that had Jim Crow laws,
that separated out blacks and whites– apartheid was still rampant
in South Africa. 75 years ago, the world
was organized into colonial empires– no longer. 25 years ago, communism was
thought to be a vital, vibrant alternative way to organize
society, just 25 years ago, before the fall of
the Berlin Wall. And you’ll like my last
favorite statistics– 15 years ago, Google
didn’t exist. You won’t like the next one
quite as much, there were also no iPhones, no smartphones,
no– Facebook didn’t exist– there were no iPods. And if you go back 20
years ago, there was no world wide web. The world is evolving. Our consciousness is evolving. Humanity is making
great progress. We can’t always see it
because we see it– if we don’t study history, we
only see a snapshot and we’re just not aware of how much
progress the world has made. And I submit to you that
business and capitalism are the major source of
that progress. And because, I mean, the
lifespan of human beings until capitalism was created was and
had been for over 40,000 years, was about 30 or less. Today, it’s 68 across the world,
it’s 78 in the United States, it’s 80 in Japan, which
is the longest lived nation on the planet. So humanity’s evolving, it’s
making great progress. Businesses is the
source of it. And business is fundamentally
good, and yet the narrative about business is terrible. I mean, Gallup shows that the
reputation for business in this society, for big business,
is 19% approval rating for big business, which
is just slightly above Congress’s rating– it’s at 16%. So business is, that means 81%
of the population doesn’t like big businesses– seen as fundamentally evil,
selfish, corrupt. And business is judged by its
worst practitioners, right? The Enrons, the Bernie Madoffs,
the WorldComs, the AIG, the Wall Street banks,
and that’s how business is portrayed, so it’s judged by
its worst practitioners. Something we don’t do– we don’t
portray doctors by their worst practitioners. We don’t portray policemen. We don’t portray even
politicians, lawyers, teachers, all the other
professions, we judge them based on their intentions, we
don’t judge them necessarily on the very worst actors
that we see. And yet, that’s what business is
compared against, the very worst practitioners, and then
it’s generalized through the larger business culture. So basically I’m saying business
has a bad rap, because business has been the
great value creator, not for a few people, but for lifting
humanity up. That has been the legacy of
capitalism to the world. But the thesis of our book is
that while that’s true, business could be
so much better. Business could be
so much better. For many, many years, when we
were doing Whole Foods Market, I thought Whole Foods
Market was alone. I didn’t know other businesses
were around like Whole Foods that were as awake, as
conscious, as idealistic. But over the last decade or so,
I’ve met other companies and other leaders of companies,
and I realized you know, god, there are companies
out there like Google, and Southwest Airlines, and
Patagonia, and The Container Store, REI, Nordstrom’s. There’s a list of companies that
share a lot of the same values that Whole Foods shares,
that has a higher purpose to its existence, that
cares about the larger society, that cares about the
environment, that has stakeholder orientation. And as we did research,
we made an interesting discovery– that these more conscious
businesses are not only creating great value for the
larger society, they’re also far more successful
financially. This was the big discovery. I mean, not just a little bit. If you look in the book in
appendix A, as we do some comparisons, we see that over
a 15 year period, the most conscious public companies have
outperformed the S&P 500 by a factor of 10
and 1/2 to one. That’s not even close,
just blow it away. Companies like Google and Whole
Foods have just been amazing financial performers
in the stock market. So I realized and my co-author
and I realized, we wanted to start a movement. We have an organization, a
nonprofit organization called Conscious Capitalism, Incs,
and our website’s consciouscapitalism.org. And we’re actually having a big
conference here in the Bay Area, in San Francisco
in April. So hopefully some of you will
come participate in that. So let me just get to the
heart and soul of what conscious capitalism is,
what the philosophy is. The philosophy is that business
has the potential to have a higher purpose, besides
just making money. And because if you go to a
party, and you just ask somebody routinely, what’s the
purpose of business, I promise you most the time, the answer’s
going to be– what do you mean, what’s the
purpose of business? Everybody knows the purpose
of business. Purpose of business
is to make money. Right? Isn’t that what you’ll
normally hear? That is such an odd answer
because if you ask what the purpose of a doctor is, doctors
are well-paid, the purpose of a doctor’s not to
make money, purpose of a doctor is to heal people,
heal sick people, or injured people. What’s the purpose
of teachers? They educate. Architects design buildings. Engineers construct things. Journalists, theoretically,
reveal the truth. So only business is defined
in this rather narrow, unflattering way that’s
all about money. And yet, I’ve known
entrepreneurs all my life, I’ve known hundreds of
entrepreneurs, and with only one or two exceptions did those
entrepreneurs start their businesses primarily
to make money. They wanted to make money, to
be sure, but that’s not why they started it. It’s not the purpose. It’s not why they exist. My body cannot– I can’t live– my body produces
red blood cells. If I stop producing red blood
cells, I’m going to die. But my purpose is not to produce
red blood cells. I have a more transcendent
purpose that gives purpose, guidance, direction
for my life. And frankly, if you don’t have a
purpose in your life, you’re going to suboptimize– you will not reach your full
potential as a human beings. We are purpose-driven animals
and we seek usually transcendent purposes, some form
of the good, the true, and the beautiful. Or we identify also the heroic
as a fourth transcendent purpose that animates humans’
ideals and also businesses could follow. So the first principle of
conscious capitalism is find your higher purpose. And it evolves over time. Whole Food’s original higher
purpose was, when we started it, was a very simple one– we wanted to sell healthy
food to people, earn a living, have fun. But as a business grows and
evolves, its purpose can grow and evolve with it. And now Whole Foods has much
more, as we’ve gotten larger and our ability to do good in
the world has expanded, the purpose has expanded with it. So now we want to help transform
the way people– we know that 69% of Americans
are overweight, 36% are obese. We know that 80% of the money
we spend on health care in America are for lifestyle
diseases such as heart disease, stroke, type
2 diabetes, cancer, autoimmune diseases. And these diseases are so
closely correlated with diet and lifestyle. There’s not going to be a
vaccination for cancer. There’s not going to be a pill
you can take that’s going to reverse heart disease. These are things we’re doing to
ourselves by the way we eat and the way we live. And so Whole Foods– one of our higher purposes now
is to educate our customers and eventually the world on the principles of healthy diet. And so people can reach their
highest and fullest potential in life. We have a higher purpose
regarding the agricultural system. How do we create a more
sustainable agricultural system that is at the same
time highly productive? We’ve done this work in
sustainable seafood, we’ve done work in animal welfare
treatment, and now we’re working on the big one– because organic is great, but
it’s kind of like it’s stuck. It’s either on or off. It doesn’t have a grading
for higher and higher sustainability on the
agricultural, on the land. So we want to put things in like
ground water, nutrient density of the soil,
environmental toxins. There are different degrees of
toxicity and pesticides. You’ve got the dirty dozen,
which are highly toxic, and you have others that
are less toxic. So all that needs to be measured
somehow or another. And that information needs to
be fed back into the food system so people can
be conscious of it. So that’s something Whole
Foods is going to be working on. That’s our next big project
in that regard. We started a foundation called
the Whole Planet Foundation, which does microcredit loans
in the developing world. And we’ve decided that
that’s actually one of our higher purposes– to help end poverty. We’re now in 55 countries. We’ve made loans that have
impacted over a million people, improved their lives. These are working capital loans,
small loans to very poor people, 93% women, has
a 98% repayment rate. We have a volunteer program
where our team members can go participate in it. And finally, the fourth higher
purpose is what I’m doing right today with you, is that
to try to help businesses to become more conscious,
to help the business community to evolve. Because unless business
community evolves, and consciousness begins to shift
here, our country and this world are going to move, and
are moving away, from the principles that built
our prosperity. For example, for most of our
history the United States would have been ranked number
one in economic freedom. As recently as the year 2000,
we rank number three, only behind Singapore
and Hong Kong. Today, we rank number 18, and
we’re rapidly descending. We’re losing our economic
freedom in America. And with it, our prosperity’s
beginning to decline. They nation that was a light
onto the world for how to create mass prosperity– that light is beginning
to dim. So part of our purpose and my
purpose here today is to talk about capitalism, and also to
talk about how businesses can become more conscious. Because unless we can get that
approval rating up from 19%, the restrictions and controls
on business are going to continue to multiply, and
we’re going to move away from– we’re killing the goose
that laid the golden eggs. It’s much harder if you’re
young– and everybody in this room, just about as pretty
young– it’s very hard to start a business today. Relatively speaking, compared to
when I started Whole Foods, it was so much easier. Now there’s so many
restrictions, so many barriers, so many bureaucratic
regulations you have to hop over to practically
do anything. So higher purpose,
first principal. So Google has a higher
purpose, right? Who wants to articulate what
that higher purpose might be? You have a great slogan
that sums it up. Anybody want to take
a crack at it? Yes, sir. AUDIENCE: Organize the world’s
information and make it universally accessible and– JOHN MACKEY: There you go. I think one of your co-founders,
I think, said how can that not get you excited? That is very exciting. And Google is a transformative
organization that is improving the world in countless ways. You are truly one of the
companies that is transforming the world and rapidly. It’s amazing how Google
has impacted our world for the better. And so every business has this
potential for higher purpose. Even widget makers have
potential for higher purpose. It’s simply understanding the
value that they’re creating and how they’re improving
people’s lives, and then building their business model
around that higher purpose. You put the purpose first. Secondly, we live in a much more
complex world and we have to come to understand that
there’s a larger system, almost a complex adaptive
system, that business exists in, which is summed up pretty
well with the stakeholder model idea– that there’s various
stakeholders that are voluntary exchanging with
the organization. So you have customers, you
have employees, you have suppliers, you have investors,
you have the communities that we live in, the larger
communities that the Earth’s part of, and we have
the environment. They’re other secondary
stakeholders, such as the government, the media, labor
unions, critics, activists, et cetera, et cetera, that you also
have to take into account and then our book talks
about that. But we identify those six major
stakeholders, the first ones I named. Business in the conscious
company does not merely create value for its investors. It creates value for all
of the stakeholder simultaneously. And I mean, Google is one of the
greatest examples of that principle in action. Think about it. The value that you create for
customers is unbelievable. I mean, I do this all the time
when I do a talk, I ask people, how many people here had
Googled at least one thing in the last 24 hours? Virtually everybody– I know this group will all
raise their hands, but it doesn’t have to be– wherever I go when I ask that
question, everybody raises their hands. It’s not just– of course you’ve got YouTube,
you’ve got all these different initiatives. I just heard about the car
initiative over lunch, and the vision that we may end up– In an urban environment, we now
might not have to even own cars– that you’d have these
self-driving cars like your bicycles and they’d just
be everywhere. And you’d have a different
transportation system that would be more environmentally
sustainable, would provide a great deal of equity, and would
be very convenient. That is a transformative
ideal. Those are the kind of ideas that
come out of the Google organization all the time. So we’re creating value
for your employees. I mean, your food
is tremendous. They were showing me
your massage rooms. It’s no accident Google’s been
named, not only one of the 100 best companies to work for, but
the number one company to work for, for four years, which
is no company has that distinction. Google’s been an incredible
investment. Look at the value it’s created
for its investors, and how much that stock has increased
since it went public is phenomenal. If you think about your
suppliers that trade with you, they’re all benefiting
from their relationship with the Google. So you’re creating
these win-win-win strategies as a business. That’s what conscious
businesses do. They do it in a conscious way. Everybody wins. We kind of have this mental
block because of sports, that if somebody wins, somebody
else loses. But the great thing about
business, particularly conscious business, is
no one has to lose. Everybody can win because
everybody that’s voluntary exchanging is benefiting. Even competitors can win. If you view your competitors as
engaged with you in a quest for mutual excellence,
competitors help you push you out of your complacency. They help stimulate
you to strive harder, to become better. And so, at least in our
business, we love it when our competitors come up
with a good idea. Because we feel like we can
take their own ideas and improve on them faster than
they can improve on it themselves, and spread it
through our organization quicker than they can spread
it through their own organizations. So we love it when innovations
occur anywhere, in the food business because it’s like,
oh my god, that’s so cool. Let’s copy that and
make it better. So stakeholder philosophy. The conscious business
has a theory of leadership that’s different. It’s not leaders who are in it
necessarily just to line their own pockets. The history of leadership
has mostly been about– people are attracted to
it because they’re attracted to power. There’s some people that just
really want to be, lord it over others– there’s power. Or money. And they just want to
make a lot of money. And while those motives still
exist, in the conscious business, they’re more– you could say you have a
militaristic drive or a mercenary drive– and now we have a
mission drive. That people, that the best
leaders that we need for these conscious businesses have a
sense of purpose, a sense of missionary, activity, to make
the world a better place. And they serve the overall
organization, right? They serve the company. They’re become servant
leaders. And then the fourth part, you
have to create a great culture because human beings are
moving up Maslow’s Hierarchy of Needs. The kind of things that used
to satisfy people 50 years ago, no longer cut it. We’ve got to create
organizations where human beings can flourish. They can self-actualize
themselves, they’re fully empowered, so they can
reach their full potential as human beings. So those are the four principles
of conscious capitalistic business– higher purpose, stakeholder
integration, servant leadership, empowered culture. You put all four of those
elements together, and you have a different kind of
company, a company that is making the world
a better place. So capitalism, I like to say,
has been good, but we can make it so much better. If we become conscious of
purpose, creating value for stakeholders, a different kind
of leadership philosophy and a different kind of culture. We will change that reputation
of business. We will shift it from an 19%
approval rate to a 90% approval rate. We’ll begin to get back the
freedoms that we’re losing, economic freedoms, and the world
will progressive at a far more rapid rate. So that’s the vision that
we outlined in the book. Google, again, as mentioned
numerous times, of course, Whole Foods is mentioned the
most because I know the most about that. So it’s natural that I would
write about Whole Foods. So our story, my own awakenings,
my own growth as a human being is discussed
in the book in some depth as well. I think that kind of
sums up the book. At least can fuel
a few questions. So why don’t we jump into that, let’s get into questions. Yeah, why don’t you help
me out here, Meng? AUDIENCE: John, first of
all, thank you for a great set of stores. I shop there all the time. JOHN MACKEY: Thank you. AUDIENCE: And happy to pay
the higher prices too. [LAUGHTER] JOHN MACKEY: You
can afford to. AUDIENCE: So whatever you said
makes eminent sense, it’s a no-brainer. Every company should
adopt it, right? Nothing should hold us back. And yet, very few companies
have adopted this model. So what stops from the other 495
companies in the Fortune 500 from doing this? JOHN MACKEY: They don’t know. Well, I think there’s
certain– First of all, there’s legacy
companies that are trapped in their own history. It’s very difficult. Think of them as great
big cruise ships. You know how long it takes to
like turn a cruise ship? Takes like 30 minutes. They got so much momentum, to
be able to turn that cruise ship around takes a long time. Well, these big legacy
corporations that have operated under a different
philosophy and they have their sort of entrenched culture,
it’s very difficult for them to shift. That’s why I really believe most
of them will not shift, but what will happen, is we’ll
create a whole new conscious business world around them,
and they’ll eventually be dinosaurs and will disappear. It’s entrepreneurs. It’s particularly the young,
millennial generation. I really wrote this book for
the young people because they’re going to embrace these
ideas and they’re going to build the new companies. Google is one of the great
examples, but there will be lots of other ones that are
going to be created, that are inspired by companies
like Google, inspired by Whole Foods. And so I don’t worry. We have a chapter about how
companies can transform themselves to become more
conscious, but I actually think it’s a lot easier to
start a new company. And then you can just do it
right from the very beginning. You don’t have a legacy
to overcome. But this will triumph,
and it’ll triumph because it works better. And in capitalism, whatever
works better, spreads. If this didn’t produce better
economic results, if it was just idealism, it wouldn’t
ultimately succeed. But the fact that it performs
so much better economically too is what makes me assured
that it’s going to be spread. It’s going to spread– and we wrote the book
to spread it. Surely, just idealistic
reason. All my roles are being donated
to the foundations, so I’m not making a penny out of it But I
hope the ideas will spread– that more businesses will
try to become conscious. AUDIENCE: Yeah, you kind of
touched on this earlier. You mentioned Google, Whole
Foods founders, CEOs, and how they have that ability
to kind of structure from the beginning. What advice would you give to
a new CEO who’s at a legacy company, who still has
responsibilities to the street, quarterly earnings
calls, how would you advise them and their investors, say,
we may take short-term increases or losses, increased
expenditures, to really change our culture. How would you advise a new
CEO in that situation? JOHN MACKEY: Well, I can tell. You what we do is talk
about in the book. I’ll deal with the quarterly
thing in a second. First thing they have to
do is they have to go discover their purpose. And so we call a
purpose search. You bring your key stakeholders
together, you go off site, you do a retreat,
and together it’s like archaeologists, you’re
digging through– If it’s a legacy company, they
had a higher purpose when the entrepreneurs started it. They may have forgotten it, the
bean counters might have taken over, and it might be
financial goals only now, but once upon a time they were
led by a higher purpose. So you can rediscover that. Or you can co-create it. You can say, let’s have
a fresh start. What do we want to
do in the world? How can we make a difference? So until they discovered that
higher purpose, the rest of it doesn’t make much difference. Regarding dealing with Wall
Street, you know, I’ll have to tell you that– all of the stakeholders that
a company has, customers, employees, suppliers, investors,
communities– the easiest one to
deal with, in my experience, is the investors. The customers are far more
difficult, at least in the food retailing business,
I can tell you. Because no matter how well you
do, they still want your prices to be lower. You get cracks at your place
being expensive all the time. [LAUGHTER] JOHN MACKEY: And they want
higher quality, they want better services. So however well you satisfy
them, the ante keeps going up. Same thing with the people
that work for you– OK, so I get free food, free
massages, and all these other benefits at Google, but what are
you getting for me lately? People get easily adapted to
whatever benefits they receive and they begin to take
it for granted. And they want more. The investors want more too. They want a higher
stock price, they want greater dividends. But they’re the least complex. They just want you to
make more money. And in a lot of ways, that’s
the easiest thing to do. So long as you do that, they
don’t care about your philosophy. And the rest of it, they pretty
much leave you alone. But when you have customers,
if you accidentally say the wrong thing when you’re on APR
and use the wrong words, you get a lot of hate mail, people
boycott you, they say they’re never going to talk
to you again. So customers are a lot harder
to keep happy, in my experience, than investors. But you still have the pressure
of the quarterly earnings thing. And I think what I would do if
I was that CEO, I would begin to explain the larger process. I would frame it up. I would say OK, we’ve created
a three year plan or five year plan. We’re going to start at X and
here’s what’s going to happen. And then you’re fully transparent with the investors. You’re telling them what’s
going to happen. And then they can make
a decision– OK, I’m selling the stock. This guy’s basically telling
he’s going to– they’re not going to make as
much money for a while. And other people buy into the
vision and they become– you’ve got to attract the kind
of investors that you want, that align with your values. Whole Foods, for example, we
really cultivate our, we cultivate long-term holders. We are very transparent with
the investment community. We tell them who we are,
what we’re doing, what our values are. We don’t really want these day
traders or these speculators who are in and out
of the stock. We don’t want them
to own our stock. We can’t stop them from buying
our stock, but they’re not the ones we’re talking to. We’re always talking to
the long-term holders. And we keep them fully informed
and we do we say. So if know you’re going to
have to cut earnings for awhile while you make this
transition, then be transparent about it,
be honest about it. You get the investors that you
deserve, so make sure you deserve good investors. AUDIENCE: Hi, I have a question about your hiring process. When it comes to culture, I
think at Google we know it’s really important to make sure
that your new employees kind of fit that culture, so I’m
curious how you, both at the corporate level and the store
level look for that in potential employees. JOHN MACKEY: Whole Foods does
a couple of unique things at the store levels, in particular
where most of our people are, right, 95% of the
people are in the stores. First thing we do is
we hire people on a probationary basis. Well, the first thing we do is
you do group interviews. So we let the team interview
people, so it’s not just one person doing the interviewing. It’s not a HR person doing
the interviewing. It’s the team leader, and their
top people on the team, and they’re doing the
interviewing. And then when a person gets
hired, they get hired on a probationary basis, from
30 to 90 days. And then they have to be voted
on by the whole team, and it requires a 2/3 positive vote. So if the team doesn’t approve
this person, they don’t stay on the team. That doesn’t mean they’re fired
from the company, they could still find another
team to hook up on. But if that team may have
rejected them because– I always say you can fool the
team leader, but you can’t fool the whole team. They see through you
collectively. So those are a couple of
things that we do. And practically at the corporate
level, we do multiple interviews and
they’re always group interviews. Generally, we mostly
hire from– promotions occur from
within the company, I mean 98% of them. We post all the positions. People apply for it. I really think if you bring in
too many outsiders and then you elevate them above people,
you really demotivate people. It’s like, I’ve been busting my
butt for this company and I didn’t even get a shot
at this, that sucks. So that’s what we do
at Whole Foods. AUDIENCE: Thanks for
your talk today. I just wanted to kind of focus
on spreading this great idea into different parts
of the world. It was really great seeing that
this idea of conscious consumerism and capitalism kind
of spreading out in the developed world like
Europe and the US. I can see it could be a little
bit more challenging to spread this idea, both for consumers
and companies in developing markets. So my question is, how we’ll
be able to help spread this idea to those in the developing
countries. JOHN MACKEY: That’s a
very good question. Because I do think consciousness
tends to– we talk a little bit about in
the book, but probably didn’t explore it as much
as I’d like to– but I think consciousness moves
in rather predictable stages, both for individuals,
for companies, and even for countries. So I always say it’s bad to
try to enforce your values that you might have and your
consciousness on some other individual, or some
other company, or some other country. I think people have to
go through their own evolutionary process. For example, I think it’s
fundamentally wrong to try to enforce child labor laws,
environmental regulations, et cetera, et cetera, on
other countries. Those countries have got
to reach their own evolutionary journey. The United States has a bad
track record over our historic, as we know from
slavery, racism, child labor abuses, environmental
degradation. The United States has evolved,
but we had to go through a long hard period. We didn’t just wake
up with it. So I think other countries
have to go through similar stages. Hopefully, they can go through
it faster because they have the benefit of learning
from our experiences. But I just think there’s a
natural upward flow in consciousness. That’s just the way I’ve
experienced my own life and that’s why I experience
other people. So I say you get the
ideas out there. Remember, we live in this
interconnected world today. It’s so fascinating to me that
if we have an innovation, like, let me tell you a story. About three years ago, one of
our stores in the Bay Area, actually in Santa Rosa. We opened a new store
in Santa Rosa. And they– without permission from Austin
or anything else, because we’re very decentralized and
empowered, in the beer and wine department, they created
what they called a tap room. They had these 16 artisan craft
microbrews, and they set it up as a bar with the big
screen television, and they created a special
ambiance for it. And now, if they’d asked
permission from Austin for that idea, probably just oh,
that’s a stupid idea. You’re really talking about
putting a bar in a supermarket. Who the heck’s going to want
to go to a bar in a supermarket, it’s not
going to work. But of course, they didn’t
have to ask permission. They could just do
the experiment and see what happens. So they open it up and within a
week, it’s sales are higher than the entire seafood
department at that store, in just this little tiny
little bar room. And then other stores, because
the internet, the schematics could be instantly sent around
the company, the sales, the gross margins, the complete
financial results of it. And then other stores start
to do it, except they improve on it. It’s like, ha, we can
do better than that. And so you have this continued
upward flow of progress because it’s they do this, and
then the new innovation occurs there, everybody sees
that, and it’s like that’s a great idea. We’re going to do that, we
can make it even better. So you have this continuous
improvement. And so because the internet
connects us together, and you can easily send all this
information around, it’s easy for ideas to spread. It used to be cultural
transmission took decades, centuries, because
the information just couldn’t flow. But today the information
flows instantaneously. So I think other countries are
going to advance at a very rapid rate because they can
piggyback on the information that other countries are– I mean, look how so many
developing countries, they don’t even have to put in the
whole landline technology for phones, they just piggy– They just, what’s that word? They leapfrogged over it. They can just do cell. You don’t need to do that exact
same development thing, so their evolution can
be accelerated. I do think that’s what’s
going to happen. People get impatient. It’s a little bit like if you
have a child and you’re watching that child grow, you
won’t see the child growing. But if you don’t see it for a
year and you come back, it’s changed tremendously. For example, I’ve been to
Thailand twice my life. I went in 1990. I couldn’t believe how
inexpensive it was, and how poor, and in a lot of ways,
backwards it was. I came back in 2007. I didn’t recognize the place. It was unbelievable. Where I could stay in Phuket
for $12 a night and get a pretty decent room, that same
room now $300 a night. The whole country had become
immensely, much more prosperous. You couldn’t even get around
Bangkok in 1990. It was just one giant
scooter traffic jam. Now they have this monorail
system that goes all around the city, you can
get everywhere. I mean, it’s amazing how– But if I’d been living there,
I wouldn’t have seen the transformation. But not having seen it, I was
like blown away by it. So I do think this evolution
is accelerating because in fact, kind of my vision, I
always like to say that human resources are limited
on this planet. We have ecological
constraints. But our creativity
is not limited. Human beings have infinite
limitless creativity and we are rapidly accelerating it. So the degree that we can
empower every individual to contribute their own
entrepreneurial creativity to the larger world pool, at that
rate we will be able to accelerate our evolution and
our advance and we’ll solve new problems. It’s actually the young
generation who doesn’t yet know what it can’t do, that
creates most of the solutions to the problems that their
parents’ generation left to them because their parents
couldn’t figure it out. So there’s lots of problems for
young people in this room, and that’s your job. You’re supposed to
go solve them. And you’re doing a lot of good
stuff here at Google, so that’s really cool. AUDIENCE: Well, first of all,
thank you very much for having a store about two miles
from my house. It makes me very happy
to shop there. And the question that I have,
it’s actually probably a good bridge off of what
you just said. Well, we’re very young, most
of the people in this room, and we’re very impatient. And it’s actually really hard
sometimes to wait and to see results play out, or to even
kind of have that aha moment, like yes, things are working,
because it takes some time. So my question to you is at
what point did you really reach your aha moment, like yes,
this business model is working, and yes, there’s people
that are behind me that are supporting this, and I
should continue doing this. JOHN MACKEY: Well, I
think I’ve had a series of aha moments. I mean, I continue
to have them. So I’m not sure exactly when– I do know when I got the
stakeholder theory, I write about in the book. I got it really a long time ago,
our very first store at Whole Foods Market. In 1981, Austin had the worst
flood it had in 100 years. We had a 100 year flood and
we had eight feet of water in the store. And we were broke, we were
bankrupt, we were washed down the river. No flood insurance, we were a
young, fledgling business, and we came in the next day to start
cleaning up the mess, and what happened then
changed my life and I had an aha moment. Because dozens of customers
showed up and helped us clean up the store. And then people we didn’t know,
just neighbors, came in and pitched in. And our team members came in. And we couldn’t pay
their salaries, they worked for free. The suppliers gave us new
inventory on credit. The bank loaned us new money on
my signature loan, which I was thinking about changing my
name, that’s how good my signature was on that day. And the investors kicked
in more capital. So all the stakeholders
came together to save Whole Foods Market. And that was an aha moment for
me because I realized, oh my god, all of these
people matter. They all are creating the Whole
Foods Market experience. It’s not just a few people. It’s not just an egotistical
entrepreneur. It’s all of the stakeholders
are creating it. So that was a huge
transformative experience for me. It’s good to be impatient
because that’s what goads you to make a change, to be
dissatisfied with the world that you find yourself in. One of things I like to tell
young people, when I was young, this world was really
screwed up, it really was. I think it’s a lot worse back
then, that it is today. And I just always blame my
parents for it, like couldn’t you guys have done
a better job? This world’s got so many
problems with it. And it was only when I got
older, I realized, god it was screwed up when my
parents got here. Someday you’ll be older and
you’ll see when your children and young people come up and
say, I can’t believe the world’s messed up. And you will see how much better
the world is than when you were young. It’s just that people don’t
have a sense of history. That’s why I started up by
talking about how far the world has come in 200 years. And it’s come so far
in my lifetime. It’s amazing. And you’ll see in 30 years, that
humanity has collectively advanced remarkably. But the young people there
will just still see new problems because there’ll
still be problems. The reality is that human
beings are not perfect. We have lots of flaws,
we’ve got egos, and we do stupid things. And we still have things like
war, and there’s environmental challenges, and that’s
what makes it interesting to be alive. So what I do know is that we
need your creativity and your dissatisfaction to help
contribute to making the world a better place. And I really think that the
idealism of the young people is why we are able to evolve. I know at Whole Foods Market,
our average age at Whole Foods is similar to Google. Our average age is about 30
or 31 at Whole Foods. And the young people are so
environmentally conscious. I always thought I was pretty
environmentally conscious, but they really are. And they push us in
this direction. The green mission teams that
we’ve created that are moving Whole Foods towards zero
waste, all types of measurements, so we can do
better, are inspiring to me. So get with it. AUDIENCE: So I have
a question. I feel like nutrition science
is a bit of a young science, and so I was curious if you
could share your experience, how you kind of weed through and
find those trusted sources of information. JOHN MACKEY: Well, in my own
case, part of it’s what I’ve learned about my own body. I think ultimately, you got
to do a lot of dietary experiments and you got to find
out what works for you and what doesn’t work. The good thing is there’s ways
to check now, you can check your cholesterol, you can check
your blood pressure. In fact, I got a app downloaded
today that, forget the name of it, but it was an
app that would measure my stress level. And since I’m on this tour, I
figured my stress levels are going to be really high. I tested at like the 1% level. I was like, this is a cool app
because I felt really good about myself. So we’ve got much more
technology that helps us to check the stuff out. But you’ve got to do your own
research, got to do your own experiments. I have a definite philosophy
about healthy eating that is that we should eat
whole foods. We shouldn’t eat processed
foods, we should eat whole foods. It should mostly be plants. I’ve been a vegan
for 10 years. I don’t think you have to be
a vegan, but probably– I’m an ethical vegan and I think
you probably just need to make sure you get your animal
foods down to maybe less than 10% of
your calories. And you eat nutrient-dense
foods, lots of fruits and vegetables, in particular. I really do believe that’s the
healthiest diet and I’ve never seen anybody eat that diet
and not flourish on it. But still, probably there are
some people that diet wouldn’t work for. So I’ve read hundreds of books
on diet and nutrition, so I’ve done my own research, my
own thinking about it. But if you’re looking for the
definitive, it’s not really a young science, it’s just hard
to track this stuff. Because people lie about
what they eat. There’s no good way
to know exactly what people are eating. There’s no good controlled
experiments you can do that really make any difference. So Whole Foods has funded
some research. We have a program for our most
at-risk team members, those who are obese, those who have
heart disease, those who have diabetes, it’s what we call
a total health immersion. We take them off-site for a week
at the company’s expense, this is strictly voluntary,
and we do intensive nutritional healthy
eating education. We feed them a healthy diet. We take their biometrics stuff
the first day they arrive and the day before they leave. And I’ll tell you a story
that kind of sums it up. We got this president of our
Southwest region, a guy named Mark, his nickname’s Flash. And he was obese. And he was really, he was a
great leader in the company, but he wasn’t really looking
like he’s a Whole Fooder, right, because he’s not
healthy, he’s obese. And I’ve nagged him, and I got
to him to go to the immersion. So I showed up at that immersion
on the last day, and I say hey, Mark, how’s it going,
Flash, how’s it going. This program is amazing. So I’ve been here one week. I’ve lost 10 pounds. My cholesterol has dropped
40 points. My blood pressure dropped
30 points. And I have pigged out
at every meal. I will eat this way the
rest of my life. Flash-forward one year. He’s lost 95 pounds. He’s bicycling 180 miles every
week, and plus doing a century entry on the weekends. And his vitality is amazing. And of course, he’s become a
missionary for healthy eating. I mean, there are lots of
good books to read. I can recommend them. The science itself is still,
you say early stage. It’s not that early, it’s just
difficult for it to get to authoritative due to the
restrictions of the fact that you can’t– You can do experiments on
rats, it’s harder to do experiments on human beings that
are really controlled. AUDIENCE: Kind of to piggyback
off of that question, I just wanted to get your thoughts
about obesity, and specifically, food deserts
in the US. So it sounds like you’re doing a
lot to help the employees at Whole Foods, but Whole Foods are
typically in large, urban, socioeconomically well-off
areas, and so I’m kind of wondering how you think we can
solve the food desert problem across the US. Because I think a lot of people
in areas would like to eat healthy, but they
simply don’t have the means to do that. They might be hundreds
of miles from the nearest Whole Foods. JOHN MACKEY: Well, I
think two things. One that’s an entrepreneurial
opportunity for someone, someone young, someone
idealistic. So that is a problem in our
society, and when you have problems, you have
opportunities for entrepreneurial initiatives. I can tell you what Whole
Foods is going to do. We are creating another
foundation, we’re calling it the Whole Cities Foundation. We will be setting up nonprofit
stores, basically in these food deserts. They’ll be smaller, they’ll have
less capital, lower rent, different labor model, they’ll
provide a small little kitchen, and a lot of education
component to it. And any money the stores make
will get recycled back into that community. Our first ones are probably
going to be in Newark, Chicago, and New Orleans. And if they’re successful,
we’ll probably do them everywhere. By successful, meaning they
can at least break even. So I’m pretty excited
about it. My co-CEO Walter Rob, who’s an
amazing guy and a force of nature, this is his
pet project. So I know with Walter behind
it, it’s going to be successful. AUDIENCE: Thanks again
for the talk. First, I just would like to
comment, I’m really excited about your work to make
sustainability and measurement more obvious and
more rigorous. Just your comment of being a
ethical vegan, could you elaborate a little more
on how that has– has that been a conflict for
yourself on serving meat at Whole Foods? JOHN MACKEY: No. It’s not a conflict for me. It’s a conflict for a lot of
other people, but it’s not a conflict for me. Because I think people have
to make their own individual food choices. I’m not a I’m not an animal– I’m not a Nazi. I don’t believe you force your
values on everybody else. So I think people have to make
these choices themselves, and Whole Foods is doing a lot to
educate people about the principles of healthy eating,
which is mostly a plant-based diet. And I see shifts occurring, I
see society moving towards more plant-based foods. But I mean realistically,
95% of our customers eat animal foods. Let’s take a look, poll of this
room, how many people in this room are strict vegans? That’s a pretty good percentage,
but you’re not enough to sustain a viable food
retailing business, too small a cohort. So eventually, if we get more
and more people, we’ll begin to have vegan stores. But it’s just not big enough. In our own surveys, it’s only
about 5% of our customers are strict vegans. So if we were to try to do
that, well, I wouldn’t be allowed to do it. I could issue the command– we will now stop selling meat at
Whole Foods Market, and it would be ignored. No, I’m serious, we’re really
going to do this. I’m making a command, do this,
or I’m going to fire you. There would be a call going out
to the board of directors very quickly, John has finally
lost it this time. We’re going to have to do
something about him. And I’d be removed. They wouldn’t let me do that,
even if I thought it was just this great [INAUDIBLE]. I’m an idealist, but I’m
also a pragmatist. You do what you can
do in the world. I’m not impressed with purists
who are very pure, but don’t have any impact. They’re very self-righteous,
they’re very judgmental, they’re very unhappy, and
they’re very ineffective for the most part. I will give you the argument
that as a ethical vegan that converted me and let’s say, I
converted Milton Friedman at 92 years of age with
this argument. So if you eat animal foods, the
animals necessarily have to die before you
can eat them. They will die if you start
eating them and they’re still alive. Most the time those animals
suffered in their death. You don’t need to eat animal
foods to be extremely healthy. You can eat a complete
plant-based diet. You have to do it intelligently,
but you can do it and be of vibrant health. I’m much healthier today than
I was 10 years ago, 15, 20 years ago. People eat animal foods
from cultural habit. And because they learned to
enjoy it, it’s pleasurable, they like it, tastes good. So can you justify causing the
death of animals simply for your own pleasure? Because that’s what it
reduces down to. I could not and haven’t had any
animal food since then. So other people are very casual
about it, it’s like yeah, I’m on top of the food
chain, screw them. I’m not that way. But I was so impressed because
I was having dinner with Milton Friedman, and he was
asking me that very question. And I gave him that syllogism. And he got very thoughtful about
it, and he announces to his wife, I cannot answer
John’s syllogism. I have no choice. I must become a vegan. He’s 92, and his wife goes
Milton, you’re 92 years old. It’s too late for us. We might as well enjoy the
last part of our lives. So I don’t know, are there
any final questions? CHADE-MENG TAN: I have one
final question for you. John, so if everything you do
today, and the conscious business organization, if
everything you do today exceeds the highest
expectations, what does the world look like in 10 years? And how do I, and how do
we Google help you? JOHN MACKEY: I don’t
have a lot of expectations about it so– I’m a guy that a long time ago
made a decision in life, the most important decision I ever
made, I decided when I was about 19 years old that I would
follow my heart wherever it led me, that I would
be true to myself. So I’m a great believer in
your own inner guidance. Most people are too frightened
to do that, but I decided it doesn’t matter whether I fall
or not, I’m going to die. So there’s no safety in life. You can’t get out of
this place alive. In view of that, you
ought to go for it. You ought to go for the things
that you have the great passion about because that will
lead to a great life of adventure, adventure, passion,
love, excitement. And that’s what I’ve
been doing. So I’m being led, I think to
do this now, it’s what my heart is calling me to do. So I’m doing it. So I don’t have that many
expectations of what’s going to happen. I hope we launch a revolution. Consciousness business becomes
the thing everybody’s talking about, that’d be wonderful. But if it doesn’t and it only
reaches a few people, I have no doubt that conscious business
is going to triumph anyway because it
works better. And the new entrepreneurs and
the young people will adopt this type of philosophy because
they’ll win in the marketplace if they do. And that reality and that fact
gives me great assurance that it will win. I am not attached
to the outcome. That gives me a certain amount
of freedom to do what I think my heart’s calling me to do, to
be true to that, and we’ll let it evolve the way
it needs to evolve. And I’ll be somewhat content
with whatever that is. CHADE-MENG TAN: And my
friends, “Conscious Capitalism”, available where
books are sold, And thank my friend, John Mackey.