Capitalism: a network of selfish corporations run by greedy, heartless tycoons — that was John P. Mackey's view of America's business community when he was a college student in the 1970s.
But a healthy dose of Adam Smith, Milton Freidman and other free-market economists — and a pivotal moment in which employees and customers helped rebuild the first Whole Foods store after a devastating flood — changed his mind, big time, Mackey told The World-Herald in an interview while in Omaha.
Mackey, 60, chief executive and co-founder of Austin, Texas-based Whole Foods and now co-author of “Conscious Capitalism,” is on a mission to rebrand capitalism and improve its reputation by demonstrating that love, passion, idealism and empathy play a central role in creating successful, competitive businesses.
Capitalism “is the greatest system in the world that's ever existed. It's lifted millions out of poverty,” Mackey told about 250 people who joined him Tuesday inside the Joslyn Art Museum's Witherspoon Concert Hall. Mackey's presentation was part of Bellevue University's 5th Annual Signature Event to promote the “American success story and values” taught by the university's undergraduate Kirkpatrick Signature series courses.
Business, which is based on the voluntary exchange of goods and services, has taken a beating and been “disparaged by intellectuals and elites,” Mackey said. Throughout history, its practitioners, including Jews in Western Europe and the Chinese in East Asia, have routinely been persecuted, he reminded his audience.
And yet, he said, capitalism has been the economic system that has boosted literacy and increased prosperity.
Mackey said conscious capitalism is the purpose-driven pursuit of commerce in which profit is a byproduct.
Very few people start businesses because they're seeking profits, Mackey said. “People start businesses because they're passionate about something,” he said.
“Google's higher purpose is to organize the world's knowledge and make it accessible. How can that not get you excited? REI's higher purpose is to connect people to nature,” Mackey said.
Whole Foods' mission is to bring healthful food to its customers.
Entrepreneurs must answer the question “What is our company's higher purpose?” before they launch, he said.
“Managing a company consciously means being aware of your values, your purpose and respectful of other people,” Mackey said.
Happiness and love are incredibly powerful forces, he said, that can positively shape corporate culture, spurring creativity and innovation and increased profits.
Mackey has repeatedly said that though “it may be counterintuitive, the best way to maximize profits over the long term is not to make them the primary goal of the business.”
“As a grocery retailer, we want our team members to be happy in the workplace. Work should be what people would do even if they didn't get paid.”
The conscious, purpose-driven business makes money when all of its stakeholders — customers, employees and shareholders — are benefiting, Mackey said. Case in point: Whole Foods ends its meetings with “appreciations — authentic appreciation of one's peers,” Mackey said.
When you don't have love, you have a culture of fear, which kills innovation and workplace enthusiasm, he said.
“If you want your stock portfolio to outperform the S&P 500, invest in the 'Fortune 100 Best Companies to Work For,' ” he said.
The book and its corresponding website, Consciouscapitalism.org, are directed toward youthful entrepreneurs in particular, said Mackey, who describes himself as a “fanatical capitalist.”
On Memorial Day 1981, a flood nearly sank the first Whole Foods-branded store. The deluge hit Austin, killing 13, causing $35 million in damage and putting the fledgling grocery store under 8 feet of water, effectively destroying the business — a $400,000 loss. “We were financially bankrupt,” Mackey said.
“When the founders and team members came to the store the day after the flood and saw the devastation, many of us had tears in our eyes,” Mackey writes in “Conscious Capitalism.”
But then something “wonderful, completely unexpected ... happened: Dozens of our customers and neighbors” showed up at the store “bringing buckets and mops. ... They said to us, in effect, 'Come on, guys; let's get to work. ... We're not going to let this store die. Stop moping and start mopping!' ”
Other stakeholders also helped out — dozens of suppliers extended credit. Employees worked without pay. “We felt so loved by our customers that we were determined to open again,” Mackey said.
Twenty-eight days later, Whole Foods reopened. “If our company's stakeholders hadn't loved and cared about us,” he said, Whole Foods “would have died.”
The company today has more than $11 billion in sales annually.