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John Mackey's Leadership Style

2829 words (11 pages) Business Assignment

6th Oct 2020 Business Assignment Reference this

Tags: Business AssignmentsLeadership

The key leadership challenges and context surrounding the individual’s tenure and how he/she viewed his/her role:

John Mackey created SaferWay with his then girlfriend to sell natural food. Like many such store in the 1970s, SaferWay was intended mostly for hippies like him. He was marketing his store to narrow market. Even though as a college town Austin has sizable student population of Hippies in the 1970s, it is in Texas where beef and meet are the staple food and the natural food that John was selling is almost alien. He recounts (the University of California Television) losing half of the $45,000 money he raised from the friends and family in the first year. On the following year, he merged his store with competitor and was making little profit but got damaged by the 8 feet of flood water. He would have been bankrupt. However, dozens of customers showed up to clean up his store because they love Whole Food, suppliers would give new inventory on credit even though he has not paid for the previous shipment, and the bank would give him new loan, and the investors would put in more money and the team members work for free even though he did not have enough money to cover payroll for a month (University of California Television, 2013).

From this, he learned that “business has existed to meet the needs and desires of multiple constituencies: customers, team members, vendors, shareholders, the community” (Smith, 2005). Unlike many businesses that put the need of the investors as the center of the business, he put the need of the customer as the core, yet belief that he need to meet the needs and desires of all stakeholders. He has to balance the wants and needs of every stakeholders so that “everybody flourishes: customers flourish, team members flourish, shareholders flourish, the community flourishes, government flourishes” (2005). But these balances are always temporary and have to continue to rebalance the wants of all stakeholders as Whole Foods grows. All stakeholders want more: the shareholders want to get more profits and more growth, the community donation request is infinite and as he gave away more the request increases, employee want to get more benefits, and the suppliers want to get more. He often talks about business having higher purpose. This is the guiding principle of John Mackey to run Whole Foods.

Until late 1990s, he was expanding in the slower pace. As he expands from the narrow market focusing on the natural food, in the 1990s market turn to his favor. Consumers were becoming aware of the danger of foods available in the bigger food store. This was partly because of book and movie such as Eric Schlosser's Fast Food Nation and Greg Critser's Fat Land: How Americans became the fattest people in the world (Alridge, 2006). He said “if the world hadn’t moved in our direction, we would have failed” (McGinn, 2005). According to the retail analysts Datamonitor, “natural and organic-food consumers in the US doubled between 1995 and 2000 (2006).

John Mackey saw his role as the philosopher. He stated that “where I’m attached is the philosophy of the business. When I feel like someone is moving away from our mission, I dig my heels in and say no. If I feel like somebody is trying to undermine our culture, I say no" (Foster, 2017). For an example, one of its stores in Dallas sold natural cigarettes in 1986 without John knowing about it. Whole Food has policy that "it's better to ask for forgiveness than permission. Try experiments. If it doesn't work, get rid of it" (2017). Cigarettes sales were profitable, however it "completely contradicts the Whole Foods image" and he stopped it (2017).

He has developed cultures that allow experimentation and innovation. “The team leader at every store can spend up to $100,000 a year without asking for permission” (2017). This culture allows his store to innovate, but at the same time allow potential blunder such as the cigarette sales to happen.

Even though he puts the customer as the center and put the need of other stakeholder such as employee behind it, he could not address the need of his employee fully. It became clear when in 2002 the “Whole Foods store in Madison, Wisconsin was organized by a group of young union organizers who hired into the store to organize it” (Mackey, 2005). After this he refocused on “team member stakeholder” and made changes to improve benefits to team members (2005). His 2010 interview at the University of Virginia shows that he has done several things to address the need of employee.

Individual’s leadership approach, style and/or techniques to overcome obstacles, build trust, manage conflict, and communicate priorities and:

Leadership approach and style:

Mackey believe that the customer’s interest is in the center. And he needs to balance the need of other stakeholders; team members, shareholders, suppliers, and communities (McGinn, 2005).  He wrote a book titled “Conscious Capitalism” in which he talked about his business philosophy. He believes that a business can have a higher purpose. Whole Food list its purpose is to “nourish people and the planet” and “quality is a state of mind at Whole Foods Market” ( “Our Mission & Values, 2019). It list its value “to sell the highest quality natural and organic foods”, “satisfy and delight customers”, “promote team member growth and happiness”, “practice win-win partnership with our suppliers”, “create profits and prosperity” and “care about our community and environment” ( “Our Core Values”, 2019).

Often, the founders of the business who were driven by a higher purpose, but without a constant reminder, their initial purpose fades when they grow and starts focusing on the growth and the shareholders value. But, he was able to use followership effectively and was able to build a culture he wanted. According to Kathy Gettelfinger’s TEDX talk, followership happen when a leader instills hope, provide stability, show compassion and build trust (Gettelfinger, 2013).

Trust:

He seemed to have used strategies that Kouzes and Posner (2017) have outlined to gain trust:

First, leader has to trust his team before expecting team to trust him. For that leaders need to let others know what he stands for, what are his value, what he wants, what he hopes for (2017, p.201).

Second, leader has to show concern for others. Leader need to show empathy. Kouzes and Posner state that when others know you will put their interests ahead of your own, they won’t hesitate to trust you (2017). As a leader, he shows that he is listening to his team, paying attention to teams ideas and concerns and help team solve their problems and being open to their influence.

Third, leader has to share knowledge and information. By sharing information, a team will be more inclined to overcome any doubts they might have about sharing information.

He capped executive salaries at “14 times the average worker's pay” (McGinn, 2005). All employees can “look up each other's earnings, and 93 percent of stock options awarded last year went to nonexecutives” (2005). He is open and trusted financial information to team from all level. Employee “get to vote on company-wide initiatives” (Alridge, 2006). He divides workers in each store into eight teams. When new employees join, they are assigned to a team and are placed on probation. Before this new hire become permanent staff, “they have to be approved by a two-thirds majority of existing team members in a secret ballot” (2006). Pay is linked to the performance of the team as a whole so that employee considers the group’s priorities over their personal goal. By gaining trust and making employee happy, he is therefore enabling them to make his customer happy and makes higher profit envious to other grocery retailer.

Value and Style:

Leader can affect an organization’s future by sharing his values. When things are changing fast, employees need a vision of the destination that lies beyond the horizon; they also need to understand the principles by which they must navigate their course. (Kouzes & Posner, 2012). Without the strong value that is shared and engrained to the culture, an organization will probably lose their direction and fail. He was able to instill value on his employees.

John Mackey appears to have used authoritative and coaching style. Goleman (2000) states that the authoritative is most effective leadership style which is a “visionary; he motivates people by making clear to them how their work fits into a larger vision for the organization”. He was communicating to his all stakeholders including employee, customers, suppliers and other partners via the Whole Food’s website, his blog, and series of talks given at many Universities. He was also using coaching style which Goleman (2000) states as the one that help employees identify their unique strengths and weaknesses and tie them to their personal and career aspirations.

Managing Conflict:

He disdains union. On his blog, he wrote “unions as they evolved in the United States became very adversarial, untrusting, and opposed to the success and prosperity of the business. This is my major objection to unions today -- they harm the flourishing of the business for all the stakeholders. Instead of cooperation between stakeholders, they focus on competition between management and labor. Instead of embracing the notion of the "expanding pie" vision of capitalism -- more for everyone, or win-win -- they frequently embrace the zero-sum philosophy of win-lose.” (“20 Questions with Sunni’s Salon”, 2005).

To manage this conflict, he made a lot of changes to address the employee happiness.  He will listen, read a lot about subjects before reaching conclusion and is willing to a great length to solve the conflict.

At the 2003 shareholders' meeting of Whole Foods Market, “animal-welfare activist Lauren Ornelas lambasted Mackey for selling meat from ducks that were raised in what she considers cruel condition” (2005). He corresponded with her, read a dozen books on animal welfare and “eventually decided Ornelas was right. And he wanted her help in rewriting Whole Foods' policies on farm-animal treatment “(2005). “It made me fall out of my chair," Ornelas says. After she spent years boycotting Whole Foods, "now we're working together" (2005).

Communication:

John has been blogging about his leadership style, speeches and interviews for a long time. According to the Communications of the ACM, published in 2006 he is one of the only two Fortune 500 CEO.  “Outside the computer field, only one other Fortune 500 company has a CEO who calls himself a blogger—John P. Mackey of Whole Foods Market” (“Blog-Free Ceos”, 2006).

Application: Identified insights that today’s strategic leader could take from the experiences of that individual.

Leader need to constantly learn at every opportunity. Constantly changing demands of the industry implied that as a leader we need to develop an ability to learn when things are fluid. We need to learn and understand meaning when multiple things are changing at the tremendous speed. So, perhaps the most important quality now in a leader is whether he is curious and whether he is willing to learn. Like John, we need to read dozen books to understand the different view to resolve the conflict.

Leader need to use several strategies to apply influence and power in an ethical manner.  As Simon Senick said in his TED talk, leaders need to model their behavior and action on being a good parent. Like a good parent, a leader need to provide an opportunity to try and fail, education, discipline when necessary and build their self confidence so they achieve more than they have imagined for themselves (2014). 

Leader need to understand how followership happens. According to Kathy Gettelfinger’s TEDX talk, followership happen when a leader instills hope, provide stability, show compassion and build trust (Gettelfinger, 2013). We need to use these into our management philosophy. First, as she noted we need to open ourselves first and create trust. By showing genuine care, that we are interested on our team’s well-being, we can create trust.

Leader need to understand how to share their value and purpose. John Mackey share the purpose of being in business and the value he subscribed to. When things are changing fast, employees need a vision of the destination that lies beyond the horizon; they also need to understand the principles by which they must navigate their course. (Kouzes & Posner, 2012). Without the strong value that is shared and engrained to the culture, organization will probably lose their direction and fail.

Leader need to focus on creating stakeholder value rather than focusing on the shareholder value. When leaders develop reputation to attract loyal customers, employees, suppliers, and community goodwill, his organization can achieve higher earnings.

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