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John Mackey, the co-founder and CEO of Whole Foods, takes an approach to business that some might find unorthodox. Rather than worrying exclusively about the bottom line, Mackey considers what’s best for his employees, supplier and customers when making decisions for his business.
Mackey, who was one of four keynote speakers at this year’s ProMAT trade show which was held last week at Chicago’s McCormick Place Convention Center, said there is more to business than quarterly earnings and dividends for shareholders.
“Great companies have a great purpose,” Mackey told the several thousand material handling professionals who gathered to hear his remarks. He described the kind of “conscious capitalism” Whole Foods and other progressive companies adhere to as their business model.
Accountable to Stakeholders, Not Just Shareholders
For Whole Foods, the driving purpose is improving the health of people, food and the planet. Similarly, Google’s purpose is to unlock information for its users. And Apple Computers excels at creating devices that let people optimize technology. And Southwest Airlines has the objective of opening up air travel to the masses.
Companies such as these don’t just hold themselves accountable to their shareholders, but to a larger group of stakeholders in the company that includes workers, customers, communities and suppliers.
Companies need to be concerned not just with their employees productivity, but also with their happiness, according to Mackey. That’s because happy workers lead to happy customers, which leads to more word of mouth about the business, which in turn leads to more business and a stronger company.
“It’s all interdependent,” he said during his address Tuesday. “It’s all one big system.”
‘Firms of Endearment’ More Likely to Succeed
Mackey said the business model in which only profit-driven, hard-edged businesses succeed was outdated. Today, “firms of endearment” — which are deeply admired by their stakeholders — are far more likely to succeed and prosper in the long run. That’s why many of these companies — including Apple and Google, as well as his own — have performed far better than stock indexes.
“There’s not this tradeoff,” Mackey said. “When you are good to your employees and customers, that leads to better customer satisfaction and financial performance.”
Apple Co-Founder Steve Wozniak Also Speaks
Besides Mackey, other keynote speakers at ProMat 2015 also included Apple Computer co-founder Steve Wozniak, who advised attendees to take their great ideas to people who could find a way to make money with them.
“Find some engineers that rally think outside of the box,” said Wozniak, who is credited with building Apple’s first computer. “Engineering involves such careful thinking and problem solving. Engineers are very goo at — if you have a plan for a product — going home and coming up with better ideas for it than if you just had your own (idea) coming from business school.”
“At a large company, the most important thing is the product line that is bringing in the revenues for the company,” he said. “It can’t be tampered with. But you’ve got to be ready to change so that you’re not the one that gets disrupted. You need a lot of engineers that build the products and do the task over and over. But you also need a few of the inventor types. And they should be close to the CEO.”
Wozniak also advised veteran material handling professionals to pay attention to what younger people are liking.
“(The late Apple co-founder) Steve Jobs did this and I do, too,” Wozniak said. “Stay in touch with kids. They have clues as to where the world is going next.”