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Whole Foods Market‟s Unique

Work Culture and Practices

Whole Foods Market was the biggest organic and natural foods retailer in the world.
The company was well known for its team-based operations and employee-oriented
work culture, which were thought to be the main drivers of its growth and profitability
in an industry that was characterized by negligible growth rates and declining profits.
The work culture at WFM was centered on the company‟s grassroots level
management, which helped it eliminate bureaucracy. The high degree of
decentralization also allowed the company to tailor its operations to meet the
requirements of local communities. An example of the degree of decentralization at
WFM was the „hiring vote‟, which empowered existing team members to choose the
new recruits to their teams. WFM was also known for disclosing vast amounts of
critical financial information to employees at all levels, and for encouraging team
members and leaders to take decisions at the team level based on this information.
WFM also disclosed the annual salaries of all its employees in its „salary book‟,
which was made available at all its locations. Additionally, the company had a salary
cap, which restricted CEO John Mackey‟s pay to 14 times the average annual salary
of all full time employees. These measures were thought to have played an important
role in creating a culture of trust and openness at the company. Competitiveness was
also promoted at WFM, and the company had a metrics-based culture, which
encouraged teams to benchmark their performance against that of others within the
system, leading to a culture of „excellence‟.
This case examines the main elements of WFM‟s work culture, and analyzes how they
helped create a culture that became a source of competitive advantage for the
company. The case also discusses Mackey‟s leadership style, and how it influenced
the culture of WFM. It concludes with an analysis of WFM‟s stand on unions and the
company‟s prospects and challenges in the future.
Whole Foods Market‟s Unique
Work Culture and Practices

“Whole Foods is a social system. It‟s not a hierarchy. We don‟t have lots of rules
handed down from headquarters in Austin. We have lots of self-examination going on.
Peer pressure substitutes for bureaucracy. Peer pressure enlists loyalty in ways that
bureaucracy doesn‟t.”1
– John Mackey, cofounder, Chairman and CEO of Whole Foods Market, in
1996.
“Customers experience the food and the space, but what they really experience is the
work culture. The true hidden secret of the company is the work culture. That's what
delivers the stores to the customers.”2
– Chris Hitt, former President of Whole Foods Market, in 2004.

Whole Foods Walks the Talk


In January 2006, Fortune, a prominent business magazine, published its annual list of
the „100 Best Companies to Work For‟ in the United States (US). Whole Foods
Market (WFM) featured at number 15 in the overall ranking, and at number three
among large companies, on this list.
It was the ninth consecutive time that Fortune had ranked WFM as one of the best
companies to work for, (WFM was also one of the few companies to have featured on
the list every year since Fortune started publishing it in 1998) (Refer to Exhibit I for
WFM‟s ranks on the list since 1998).
WFM was the world‟s largest natural foods retailer, and also carried several products
that were certified as organic.3 Natural and organic food was thought to be the fastest
growing segment in the US retail industry in the early 2000s (Refer to Exhibit II for
a note on organic food). WFM was among the fastest growing retailers in the US,
and was known for its high growth rate in an industry characterized by zero to
negative same store sales growth4.
WFM was well known for its employee-oriented work culture and team-based
operations, which were thought to be the main drivers of the company‟s success. “One
of our core values at Whole Foods Market is Team Member happiness and excellence,
and we believe our innovative and egalitarian work environment is a major factor in
our success as a company,” said Walter Robb, co-president and COO of WFM.5

1
Charles Fishman, “Whole Foods is all Teams,” Fast Company, April 1996.
2
Charles Fishman, “The Anarchist‟s Cookbook,” Fast Company, July 2004.
3
Natural food and organic food are produced without the fundamental nature of the product
being altered. In other words, the food, whether it is raw or processed, contains no artificial
additives. However, for food to be called „organic‟, it needs to be certified by a
government approved agency. Therefore, all natural food is not necessarily organic.
4
Same stores sales growth rate is an important retail industry metric that measures the sales
growth from only those stores that have been operating for at least one year. In the early
2000s, most of the major retail chains were experiencing low, and sometimes negative
same store sales growth.
5
“Fortune Names Whole Foods Market #15 on 100 Best Companies to Work For List,”
www.wholefoodsmarket.com, January 9, 2006.

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Whole Foods Market’s Unique Work Culture and Practices

Exhibit I
Whole Foods‟ Ranking in Fortune‟s List of „100
Best Companies to Work For‟
Year Rank
2006 15
2005 30
2004 47
2003 32
2002 48
2001 41
2000 72
1999 48
1998 34
Source: www.wholefoodsmarket.com/company
WFM has been called a „radical experiment in democratic capitalism‟ 6. According to
analysts, several companies talked about teamwork, autonomy, and empowerment, but
very few actually put these ideals into practice. WFM was considered by some to be
one of those rare companies that not only had a clear vision, but also the commitment
to pursue it.
Exhibit II
A Note on Organic Food
Organic food refers to food products that are grown without the use of synthetic
fertilizers, conventional chemical pesticides, and sewage sludge in the case of raw
foods, and without the use of chemical food additives, bioengineering, and ionizing
radiation in the case of processed foods. Organic meat products come from animals
that are reared without the use of antibiotics and growth hormones. Animals used
for organic meat are supposedly reared in better conditions, and have access to the
outdoors.
For food to qualify as organic, it needs to be certified. Organic Certification is a
certification process for producers of organic food and other organic agricultural
products. In general, any business directly involved in food production can be
certified, including seed suppliers, farmers, food processors, retailers, and
restaurants. Requirements vary from country to country, and generally involve a set
of production standards for growing, storage, processing, packaging, and shipping.
In the US, organic food has to be certified by an USDA (United States Department
of Agriculture) accredited certifier. As of mid-2006, there were nearly 100 USDA
accredited certifiers. The accredited certifiers are allowed to administer an Organic
Seal to products and producers that meet the USDA‟s requirements.

6
Charles Fishman, “Whole Foods is all Teams,” Fast Company, April 1996.

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Enterprise Performance Management

There are different levels of organic certification:


“100 percent organic” products are those that are produced or processed in a
completely organic way.
“Organic” products allow for up to five percent non-organic ingredients. This
mainly involves materials used in processing packaged foods.
Products labeled as “Made with organic ingredients” cannot use the official
USDA seal. They are generally at least 70 percent organic.
Products that are less than 70 percent organic, but still contain some organic
content, can use the word “organic” to identify individual ingredients.
Initially, organic food was only available in small stores or farmers‟ markets. But
by the 1990s, several national retailers in the US had started carrying organic
products. Natural Food retail chains like Whole Foods Market and Wild Oats
Market generally carried a significant number of organic products. In the early
2000s, it was estimated that the market for organic food was growing at a rate of
around 15 percent per annum on an average (Refer to Table). The market for
conventional food, although larger in size, was growing only at around 2 to 3
percent per annum during the same period.
Table: US Sales of Products Labeled 100% Organic,
Organic, and Made with Organic Ingredients
Year Sales in Billions of $
2002 8.6
2003 10.4
2004 12.5
2005 13.9
2006 (estimate) 15.8
Source: Organic Trade Association, U.S. Department of Agriculture,
www.usda.gov
As of the early 2000s, the customer segment for organic food was made up of
people who were highly educated and well informed, belonged to the upper middle
class, and were willing to pay a premium price for health. Typically, organic food
is sold at a premium of around 50 to 75 percent over regular food.
Compiled from various sources.

Background

The history of WFM goes back to 1978, when John Mackey (Mackey), a college
dropout from Texas, and his friend Renee Lawson Hardy (Hardy), started an organic
foods store in Austin, Texas. The store was called Safer Way Natural Foods (after
Safeway Inc.7), and the partners opened it with a capital of $45,000 8 borrowed from
their friends and families.
Safer Way was a 3,000 square foot store, which primarily sold organic food and
groceries. The store also contained a small restaurant. The store and the restaurant
were strictly vegetarian, and the partners sourced their supplies from local
communities. It wasn‟t long before Safer Way found a loyal clientele, but Mackey

7
Safeway Inc. was a major food and drugs retailer in the US. As of December 31, 2005, the
company operated 1,775 stores in the United States and Canada, and had revenues of $38.4
billion.
8
Dollars ($) refers to US dollars in this case study.

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Whole Foods Market’s Unique Work Culture and Practices

and his partner had had no business training, and found it difficult to run the business.
By the end of the first year, the store had lost $23,000.
In the 1970s, there were only a handful of organic food stores in the US. These stores
were usually small and did not offer much variety in terms of merchandise. None of
them offered a full range of products. (Some specialized in vegetables, others in meat,
and so on. There was no place where people could get a complete range of organic
products under one roof). Because of this, people who were committed to organic
food had to put up with the inconvenience of having to visit several different stores to
do their shopping. The products were also thought to be too expensive, considering
the poor ambience of the stores and the inconvenience to shoppers. Because of this,
there were few takers for organic or natural foods at that time.
Mackey believed that organic food would be more successful if there was a store that
was a one-stop shop for all organic and natural products. If the store were to be
designed as an organic foods supermarket with the produce being laid out attractively,
people would be able to shop for all their organic needs at one place.
In 1980, Mackey and Hardy approached Craig Weller (Weller) and Mark Skiles
(Skiles), owners of Clarksville Natural Grocery, another health and natural foods store
in Austin, with the proposal of a merger between their two businesses. Weller and
Skiles agreed with Mackey‟s reasoning that a larger store format would expand the
market for organic food, and the four of them opened their new superstore, called
„Whole Foods Market‟. The first WFM was spread over 10,000 square feet of space,
and sold a wide variety of natural and organic products. The store operated with 19
employees.
WFM was much larger than the other natural food stores operating at that time, and
offered a greater variety of merchandise. It differed from Safer Way in that it sold
non-vegetarian food, and carried products like wine and coffee, which Mackey had
avoided stocking in his first store.
Mackey and his partners ensured that the produce was laid out attractively, and that
the store had a welcoming ambience. The salespeople were also well trained to answer
any queries customers may have regarding natural foods. Sales picked up, and WFM
looked set for success. However, in 1981, disaster struck. A sudden flood destroyed a
large section of the store.
The store was not insured, and for a while it looked like it was the end of the road for
WFM. But help came from unexpected quarters. When word went around that WFM
might shut down because of a lack of funds for undertaking repair work, many of the
store‟s customers spontaneously came forward to help with the repairs. Later, Mackey
said that it was on that day, when he saw customers working with buckets and tools to
put the store back into operation, that he realized that WFM was a success. With a
little assistance from their bank, the partners were able to reopen the store within a
month of the flood.
The customers‟ involvement in the store repairs made Mackey realize the potential of
WFM (Mackey was the most active of the four partners in WFM, and was closely
involved with the day to day running of the business). By the end of 1981, the second
WFM store was opened in Austin. Over the 1980s and 1990s, the company expanded
rapidly across the US. Growth came from a mix of new store openings and
acquisitions.
By the early 1990s, WFM had stores in the cities of Houston and Dallas in Texas and
in Louisiana, Northern California, and North Carolina. In 1992, WFM launched an
Initial Public Offering (IPO) and was listed on the NASDAQ. At that time, the
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Enterprise Performance Management

company had 12 stores and sales of $92 million. The $23 million raised through the
IPO was used to fund the company‟s expansion. It was also during this time that the
company‟s culture began to take shape. Soon after the IPO, when the company was
poised for rapid expansion, Mackey announced: “We‟re creating an organization
based on love instead of fear.” 9
WFM went on to open stores in Washington DC, Boston, and the rest of California in
the 1990s. The company also made several key acquisitions during this period. Some
of WFM‟s acquisitions in the 1990s were Wellspring in North Carolina (two stores);
Bread & Circus in New England (six stores); Mrs. Gooch‟s in California (seven
stores); and Fresh Fields on the East Coast (22 stores). By the end of the 1990s, the
company had stores in 25 major metropolitan markets across the US (Refer to
Exhibit III for a list of WFM‟s acquisitions and subsidiaries as of mid- 2006).
Exhibit III
Acquisitions and Subsidiaries of WFM
Name Set up in Acquired in
Whole Foods Company 1974 1988
Wellspring Grocery 1981 1991
Bread and Circus 1975 1992
Mrs. Gooch‟s 1977 1993
Fresh Fields 1991 Mid 1990s
Bread of Life 1980 1997
Merchant of Vino 1974 1997
Allegro Coffee 1977 1997
Nature‟s Heartland 1996 1999
Food for Thought 1989 2000
Harry‟s Farmers Market 1987 2001
Fresh & Wild 1998 2004
Compiled from www.wholefoodsmarket.com
In 1998, WFM made its debut on Fortune‟s „100 Best Companies to Work for in the
US.‟ The company embarked on its international expansion in the early 2000s,
opening its first store outside the US in Toronto, Canada, in 2002. In 2003, Mackey
was chosen as the „Entrepreneur of the Year‟ by Ernst & Young, a major consulting
firm. In 2004, the company entered the UK with its acquisition of Fresh & Wild, a
seven-store chain.
In 2005, WFM made its debut on the Fortune 500 list, where it was ranked at #479.
As of the end of 2005, WFM employed nearly 38,000 people and had sales of $4.7
billion (Refer to Exhibit IV for WFM‟s income statement). As of mid-2006, the
company operated 184 stores spread across the US, Canada, and the UK. Mackey
declared that his target was to reach revenues of $12 billion by 2010, and $30 billion
by 2020. “Everything we envisioned has come true,” he said. 10

9
“An Organization Based on Love Instead of Fear,” www.crainc.com, July 21, 2004.
10
Seth Lubove, “Food Porn,” Forbes, February 14, 2005.
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Whole Foods Market’s Unique Work Culture and Practices

Exhibit IV
Annual Income Statement
(In millions of US dollars except share amounts)

September „05 September „04 September „03


Revenue 4,701.3 3,865.0 3,148.6
Cost of Goods Sold 2,918.4 2,409.7 1,970.0
Gross Profit 1,782.9 1,455.3 1,178.6
Gross Profit Margin 37.9% 37.7% 37.4%
SG&A Expense 1,419.4 1,114.0 905.3
Depreciation & 133.8 111.9 98.0
Amortization
Operating Income 229.7 229.4 175.3
Operating Margin 4.9% 5.9% 5.6%
Nonoperating Income 9.6 6.5 5.6
Nonoperating Expenses 2.2 7.2 8.1
Income Before Taxes 237.1 228.7 172.8
Income Taxes 100.8 91.4 69.1
Net Income After Taxes 136.3 137.3 103.7
Continuing Operations 136.4 137.1 103.7
Discontinued Operations 0.0 0.0 0.0
Total Operations 136.4 137.1 103.7
Total Net Income 136.4 137.1 103.7
Net Profit Margin 2.9% 3.5% 3.3%
Diluted EPS from 0.99 1.05 0.83
Continuing Operations ($)
Diluted EPS from 0.00 0.00 0.00
Discontinued Operations
($)
Diluted EPS from Total 0.99 1.05 0.83
Operations ($)
Diluted EPS from Total 0.99 1.05 0.83
Net Income ($)
Dividends per Share 0.42 0.23 0.00

Source: www.hoovers.com

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Enterprise Performance Management

Culture and Practices

WFM was one of the most profitable grocery retailers in the US. It was also one of the
rare retailers that had a double-digit growth rate in a rapidly saturating industry. The
company had a compounded annual growth rate of around 32 percent between 1991
and 2005. In 2005, WFM had same store sales growth of 12.8 percent, and an overall
revenue growth of almost 22 percent over 2004. WFM‟s nearest competitor Wild Oats
Market, experienced same store sales growth of around 3.8 percent and an overall
revenue growth of around 7.25 percent in the same period, while traditional grocers
like Safeway had a same store sales growth of around 2-3 percent. (Refer to Exhibit
V for a snapshot of WFM‟s competitors). It was widely believed that WFM‟s
growth was due, in large part, to its strong work culture and decentralized operations.
Exhibit V
A Snapshot of WFM and its Competitors
Revenue
Fiscal Year Revenues Net Income
Company Stores growth Employees
end ($ millions) ($ millions)
(1 yr) %
Whole Foods September 181 4,701.3 136.4 21.6 38,000
Market Inc. 2005
Safeway Inc. December 1,775 38,416.0 561.1 7.2 201,000
2005
Albertsons January 2006 2,500 40,358.0 446.0 1.2 234,000
LLC.
Wild Oats December 110 1,124.0 3.2 7.25 8,233
Markets Inc. 2005
Publix Super December 875 18,686.4 819.4 10.3 128,000
Markets Inc. 2004
GNC December 4,500* 1,317.7 18.4 (2.0) 12,415
Corporation. 2005
Trader Joe‟s June 2006 250 4,000 NA NA NA
Company Inc.
(Pvt. Co.)
*Stores were company owned as well as franchised.
NA: Not Available
Note: This list is not exhaustive
Compiled from company websites and www.hoovers.com
WFM defined its vision as “Whole Foods Whole People Whole Planet” (Refer to
Exhibit VI). In Guiding Growth: How Vision Keeps Companies on Course, a book by
Mark Lipton,11 WFM is quoted as follows: “Our vision statement reflects the hope and
intentions of many people. We do not believe it always accurately portrays the way
things currently are at Whole Foods Market so much as the way we would like things
to be. It is our dissatisfaction with the current reality, when compared with what is
possible, that spurs us toward excellence and toward creating a better company and
world.”12

11
Mark Lipton was a management professor and the founder of an eponymous consulting
firm.
12
www.amazon.com

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Whole Foods Market’s Unique Work Culture and Practices

Exhibit VI
WFM‟s Vision – Whole Foods Whole People Whole Planet
Whole Foods
We obtain our products locally and from all over the world, often from small,
uniquely dedicated food artisans. We strive to offer the highest quality, least
processed, most flavorful and naturally preserved foods. Why? Because food in its
purest state – unadulterated by artificial additives, sweeteners, colorings and
preservatives – is the best tasting and most nutritious food available.
Whole People
We recruit the best people we can to become part of our team. We empower them
to make their own decisions, creating a respectful workplace where people are
treated fairly and are highly motivated to succeed. We look for people who are
passionate about food. Our team members are also well-rounded human beings.
They play a critical role in helping build the store into a profitable and beneficial
part of its community.
Whole Planet
We believe companies, like individuals, must assume their share of responsibility
as tenants of Planet Earth. On a global basis we actively support organic farming –
the best method for promoting sustainable agriculture and protecting the
environment and the farm workers. On a local basis, we are actively involved in
our communities by supporting food banks, sponsoring neighborhood events,
compensating our team members for community service work, and contributing at
least five percent of total net profits to not-for-profit organizations.

Source: www.wholefoodsmarket.com
In the late 1970s, when WFM was set up, Japanese principles of management 13 were
in vogue in the US. Mackey and his partners were also influenced by these principles,
and some of these ideas found a place in WFM‟s culture.
WFM had a culture where employees at all levels were empowered to take decisions
and had a voice in the company‟s policies. The company‟s core philosophy was that
empowered and satisfied employees were the foundation of a successful company.
Team member happiness was an integral part of the culture at WFM, and formed the
basis of the company‟s Core Values as well as its Declaration of Interdependence
(Refer to Exhibit VII for WFM‟s Core Values and Declaration of
Interdependence).

Grassroots Management

Teams were the focal point of the operations of WFM, and they formed the core of the
company‟s culture. The entire WFM system was divided into teams, up to the highest
level in the hierarchy. Each store was an autonomous profit center comprised of
teams.

13
The main ideas of the Japanese approach to management were Kaizen or continuous
improvement, teamwork, „Just in Time‟ production, and lifetime employment. Mackey
was influenced by the ideas of teamwork and continuous improvement. Worker
empowerment was also an important element of WFM‟s culture, just as workers in some
companies in Japan were allowed to stop the production line at any time and work together
to solve problems, without evoking any disciplinary action.

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Enterprise Performance Management

Exhibit VII
WFM‟s Core Values
Selling the highest quality natural and organic products available
Satisfying and delighting our customers
Team Member happiness and excellence
Creating wealth through profits and growth
Caring about our communities and our environment

Source: www.wholefoodsmarket.com
WFM‟s Declaration of Interdependence
We support Team Member happiness and excellence. Our success is dependent
upon their collective energy and intelligence. We design and promote work
environments where Team Members can flourish and reach their highest potential,
and we encourage their participation and involvement at all levels of our business.
Some of the ways we do this are:
Self-directed teams that meet regularly to discuss issues, solve problems, and
appreciate each other's contributions.
Increased communication through Team Member forums and Awareness
groups and open book, open door, and open people practices.
Labor Gainsharing and other Team Member incentive programs
Team Member Stock Options and Stock Purchase Plan
Commitment to make our jobs more fun by combining work and play and
through friendly competition to improve our stores.
Continuous learning opportunities about company values, food, nutrition, and
job skills.
Equal opportunity for employment, with promotion mostly from within
company.
“Us versus them” thinking has no place in our company. While cultivating unity of
vision about the future of our organization, we also aim to build a strong sense of
community and to recognize and value the rich diversity and individual differences
among Team Members.

Source: www.wholefoodsmarket.com
At the lowest level, within each store, there were usually around 10 self-managed
teams. In general, stores employed between 30 and 300 people (depending on the
location and size of the store), and every employee belonged to his/her departmental
team. Each team was responsible for one aspect of the store‟s operations, like grocery;
meat, poultry and seafood; prepared foods; bakery goods; beer/wine/cheese; nutrition
products (nutritional supplements, herbs and body care), etc. All stores also had a
customer service team and a front-end team of cashiers.

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Whole Foods Market’s Unique Work Culture and Practices

Each individual team had a team leader elected from within the team. Within the
store, all the team leaders formed a second-tier team. This team again had a team
leader, who, in effect, was the store manager or the store „leader‟ as he or she was
known at WFM.
All the store leaders in a particular region formed a regional team. The leader of this
team was the regional head. All the regional heads – WFM had 11 regions as of mid-
2006 – made up another team. This team, along with the employees at headquarters,
was the highest-level team in the WFM structure, and was headed by Mackey (Refer
to Exhibit VIII for a list of WFM‟s regions).
Exhibit VIII
The 11 Regional Offices of Whole Foods Market
Region Locations
North Atlantic Connecticut (West Hartford)
Massachusetts
Rhode Island
United Kingdom (London)
Mid-Atlantic Kentucky
Maryland
New Jersey (Marlton and Princeton only)
Pennsylvania
Ohio
Virginia
Washington D.C.
North East Connecticut (Greenwich)
New Jersey (excluding Marlton and Princeton)
New York
South Georgia
North Carolina
South Carolina
Midwest Illinois
Michigan
Minnesota
Missouri
Nebraska
Wisconsin
Toronto, Ontario (Canada)
Southwest Louisiana
Texas
Rocky Mountain Colorado
Kansas
New Mexico
Pacific Northwest Oregon
Washington
British Columbia (Canada)
Southern Pacific Southern California
Arizona
Nevada
Florida
Northern California
Adapted from www.wholefoodsmarket.com
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Enterprise Performance Management

All teams were interdependent, and worked together to achieve goals. For instance, at
an employee level, each employee was a member of a departmental team, but was also
a part of the „store team‟ and had a say in the decisions that affected the store.
Similarly, they were also considered to be a part of the regional team for inter-regional
comparison, as each region competed with the others within the WFM system.
Each departmental team met at least once a month to discuss issues related to their
department, and to arrive at solutions to problems. It was a democratic system and all
team members had a say in the final decisions. For instance, the bakery team in a store
would discuss issues related to how many perishable items they ordered, how many
nonfat items to carry, what products could be dropped, and so on. In addition, each
store also met as a team (with all the store employees) once a month. Occasionally
regional meetings were also held, led by the regional head, but at the region-level,
meetings were usually attended only by the store leaders.
Reportedly, team meetings were looked forward to within WFM and often had the air
of rallies. During store level meetings, people from across the store came together to
exchange stories and information, and to help each other solve problems. Store leaders
were also encouraged to benchmark their practices against each other during regional
meetings. Meetings were thought to increase the cohesiveness of the teams at WFM.
Cohesiveness among team members was of utmost importance at WFM, as all the
performance targets at the company were team-based. Each department within a store
had performance targets, which were broken down from the store-level, region-level,
and company-level targets. The success of the company was, therefore, entirely
dependent on the success of each individual team, down to the lowest level. The team
as a whole was accountable for the achievement of the targets. Therefore, there was a
strong sense of „shared fate‟ among team members. This sense of „shared fate‟ was
further strengthened by what was known at the company as the „hiring vote‟.

The Hiring Vote


A unique practice at WFM was that all recruitment for full time employees was done
at the team level. The powers of the store leaders were restricted to screening
candidates and recommending them for the job. The candidates were then hired
„provisionally‟ for a period of 30 days. At the end of the trial period, the team to
which the candidate had been recruited voted on making him/her a regular employee.
Every candidate needed at least a two-thirds majority of votes from the team to
become a regular employee.
The hiring vote was believed to have an impact on the behavior of all the people
involved, as it was a great responsibility. Store leaders took care to see that they did
not recommend people whom their team members were unlikely to approve of. Team
members were also careful about whom they allowed on their team, because hiring a
poor performer could affect their productivity as a team and show them up in a bad
light during the reviews.
Sometimes candidates who did not fit in with the company‟s culture were rejected
even before the 30-day trial period. Aimee Morgida (Morgida), store manager of a
Bread & Circus store in Massachusetts, once fired a candidate before the 30-day trial
was over. Apparently, the candidate routinely lounged about, and leaned on the
counters in front of customers. Though several team members had spoken to the
person about this, their advice was not heeded. Eventually the team voted to fire the
candidate even before the trial-period was over. Reportedly, the candidate was

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Whole Foods Market’s Unique Work Culture and Practices

shocked when told about the team‟s decision. Apparently the person had not realized
that such behavior would be viewed so seriously. 14
Mackey believed that working as a team in choosing candidates made the employees
more effective. He said that it gave them a sense of ownership to take decisions for
their teams and to justify these decisions. “They‟re saying, „This person isn‟t good
enough to be on our team.‟ They‟re standing up to the leader, taking ownership of
their team,” said Mackey.15
Mackey also believed that this recruitment system worked well for WFM as working
at the company was not for everyone. Unlike other retail chains where customer
service was the main performance criterion, WFM looked for people who not only
had a knack of pleasing customers, but also had a „passion for food,‟ and the ability to
work in a democratic set-up where candid „give and take‟ was an inherent part of the
system. Mackey thought that these qualities could not be gauged in a traditional
interview, and became apparent only when people worked alongside others for a
while. Reportedly, this hiring process was quite successful.
The store managers also felt that this system had several advantages. Ron Megahan, a
store manager at Massachusetts, said, “There are people who are really good about
working when the manager is on the floor. But as soon as the manager disappears,
they lose control.”16 At WFM however, somebody was always monitoring the
candidate‟s behavior, which made it easy to spot slackers.
At the other end of the spectrum, there were also cases of store managers not being
impressed with certain candidates, but being encouraged by the team to retain them.
Morgida recalled an instance where the bakery team at her store encouraged her to
increase the hours of Hadja, a part-timer, although Morgida herself was skeptical
about Hadja‟s spotty English (the candidate was an Asian immigrant, and could not
speak English very well). The team members told Morgida that although Hadja‟s
English was not very good, she had the knack of communicating with customers and
keeping them happy. They also felt that the girl was a good person to have around, as
she was quite helpful. Morgida eventually increased Hadja‟s hours. 17

Autonomy and Empowerment


It was particularly important to choose people who shared the same values as the other
team members, and had the ability to work cohesively in a team, because of the
decentralized nature of operations at WFM.
The teams were given a great deal of autonomy and were empowered to make all the
decisions that impacted their departments. Individual team leaders made all the
decisions for the teams in consultation with their team members and the store leaders.
For instance, team leaders could decide what products to carry in their departments
and in what quantities, and also from where to source them.
All WFM stores were encouraged to localize their operations, and many of them
carried food and other products that were grown locally. The headquarters placed no
restrictions on what the various departments carried, as long as the products met
WFM‟s stringent quality standards, and were completely free of additives and
pesticides. Even the prepared foods departments localized their dishes to a great

14
Charles Fishman, “Whole Foods is all Teams,” Fast Company, April 1996.
15
Charles Fishman, “Whole Foods is all Teams,” Fast Company, April 1996.
16
Charles Fishman, “Whole Foods is all Teams,” Fast Company, April 1996.
17
Charles Fishman, “The Whole Foods Recipe for Teamwork,” Fast Company, April 1996.

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Enterprise Performance Management

extent, and chefs were encouraged to concoct their own recipes. (The successful
recipes were later shared between stores).
Because of decentralization, there were often wide variations in the product range
available at different WFM stores. Sometimes, even two stores in the same city
carried different products. Store design also frequently differed from store to store as
store leaders were given considerable leeway in store design decisions. The store
leaders also set prices based on local standards, and the stores could conduct their
marketing and promotional activities at a local level.
WFM spent very little on advertising. The company gave each store a budget, and
encouraged employees to come up with ideas to attract customers within the budgeted
cost. This reportedly led to a lot of creative ideas. One employee at an Austin store,
for instance, suggested that the company open an ice skating rink on the store roof.
This decentralized approach was believed to be responsible for creating a strong
„entrepreneurial‟ culture at WFM. The authority to take decisions, and responsibility
for their outcomes allowed innovation and experimentation to occur at the store level.
Store leaders were highly empowered, and were encouraged to run the stores like their
own small businesses. Employees were also encouraged to share their ideas and
opinions with their team leaders. Christine Westfall, a former WFM employee, said
that this was a great motivator. “I had a sense of dignity. I felt my opinions were
heard,” she said.18
WFM‟s motto was that it was “Better to ask for forgiveness than for permission.”
Employees were encouraged to try out new things to improve operations, and to find
better ways to create customer value. Eventually, successful practices and ideas were
shared across the company and adapted by different stores according to their
requirements. Analysts said that WFM‟s approach to decentralization played an
important role in eliminating bureaucracy at the company. Therefore, although WFM
grew at a rapid pace, the company was not saddled with cumbersome rules and
procedures. Instead, checks and balances were incorporated into the system itself in
the form of peer reviews and competition between teams, stores, and regions.

The Benefits Vote


The extent of decentralization at WFM was demonstrated in 2003, when the company
put the entire benefits package, from medical plans to vacation time, up for a
company-wide vote. The employees themselves voted on what benefits they were to
get (generally a corporate-level decision) rather than have headquarters decide on the
package.
The full-time employees (87 percent of the workforce at that time) voted for a health
plan where the company paid 100 percent of their health premium with a higher
deductible. (Previously, WFM had paid between 50 and 100 percent of the premium,
depending on which of the three health plans each employee was on.) WFM also
issued “personal wellness cards,” which worked like debit cards, with a $1,700 limit.
Employees could use this card for their medical and dental expenses.19

18
“Whole Paychecks?” www.metroactive.com, September 3, 1998.
19
Michelle Breyer, “Whole Food's Vote to Unionize Upsets Libertarian Founder,” The
Austin American-Statesman, http://portland.indymedia.org, June 6, 2003.

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Whole Foods Market’s Unique Work Culture and Practices

Employees also decided on the bouquet of benefits that they wanted the company to
offer, and voted on them. In this vote the employees opted for benefits like tuition
reimbursement, full health insurance, and 401(k) contributions 20 in the package, and
voted down things like childcare reimbursement. Mackey was reportedly surprised by
the benefits that some employees wanted. For example, some of them wanted pet
bereavement assistance – a proposal which found favor with only 17 percent of the
voters, and was eventually not included in the final package. WFM also announced
that it would put the employee benefits to vote every three years, so that people could
choose the benefits package that suited them at each life stage.
WFM decided on this move as it realized that employees cared a great deal about the
kind of benefits they received, and were in a better position than a corporate level
committee to judge what they wanted. The company was a firm believer in the adage
that “Happy team members make happy customers,” and there was no question that
being allowed to choose the benefits that best met their needs kept the employees
happy.

Decision-Making
Company-wide voting was in keeping with WFM‟s decision-making philosophy that
decisions should be made as close as possible to the place where they would be
implemented, and that they should directly involve the people who would be affected
by them.
As WFM grew, the number of decisions that needed to be taken increased
considerably. Mackey said that he became fed up with people constantly coming up
and asking him about what to do in any situation. He said “When I would travel
around and talk to the team members, they‟re always asking me, „You know, John,
can we have this? Can we have that? What about this? Can we do this? And I realized
why don't we let them decide for themselves what we‟ll have?”21
According to Mackey, most of the decision-making at WFM was consultative or
consensual. Consultative decisions were those that the senior management or the store
leaders took in wide consultation with the group of people affected by the decision. At
the store level, these typically related to the store leaders‟ or team leaders‟ decisions
regarding what products the store would carry, where they would be sourced from,
and so on. Team members were consulted, but the final decision lay with the store
leader.
Consensus decisions, on the other hand, were those that were taken by the team
members themselves. The most common consensus decision at WFM related to the
hiring vote, where at least two-thirds of the team members had to vote in favor for a
person to be hired.
WFM had a National Leadership team consisting of Mackey and other members of the
top management. Mackey said that even at this level, most of the decisions were taken
on the basis of a consensus, and that he rarely, if ever, overruled the team members.
Command and control decisions, where Mackey or any other leader took a decision
unilaterally, were avoided as much as possible.

20
The 401(k) plan is a type of employer-sponsored retirement plan named after a section of
the United States Internal Revenue Code. A 401(k) plan allows a worker to save for
retirement while deferring income taxes on the saved money or earnings until withdrawal.
21
“John Mackey: Not Your Average Grocer,” www.cbsnews.com, June 4, 2006.

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Enterprise Performance Management

Decisions on employee promotions were also made on a consensus basis. At WFM,


most of the team leadership vacancies were filled through internal promotions, and it
was very rare for outsiders to be brought in as leaders at any level. All leadership
positions were generally posted throughout the company, and employees could apply
for them. The applicants then went through an interview with the team, and the best
candidates were selected as leaders. In other words, the best departmental team
leaders became store leaders, and the best store leaders became regional managers.

Transparency

WFM voluntarily disclosed critical financial information to its employees. Every year,
the company released a vast amount of data giving the various operational metrics of
the business. However, unlike most other companies, this information was not
targeted at the press or the public, but at the employees.
WFM believed that providing employees with the necessary data would help them
understand the business better, and encourage them to improve their performance. The
company released a lot of sensitive information related to team sales, store sales,
profit margins, etc. Because of the amount of critical financial information accessible
to employees, the US Securities and Exchange Commission (SEC) even classified all
the employees as „insiders‟ for stock trading purposes. Mackey called this a „no-
secrets‟ management philosophy. “In most companies, management controls
information and therefore controls people. By sharing information, we stay aligned to
the vision of shared fate,” he said.22
A significant component of this philosophy was the „salary book‟. Every year, WFM
published a detailed document that listed the salaries and bonuses earned by each
employee of the company. This book was available at all the stores and every
employee had free access to it. The company believed that transparency about salaries
eliminated a major source of mistrust at the company about „who made what‟, and
promoted team spirit.
Mackey initiated the open salary book policy in 1986, when he realized that a lot of
employees spent their time speculating about how much the management was earning.
He then decided that disclosing the salaries of the top executives would put a stop to
the rumors. Eventually he realized that disclosing the salaries of all employees could
have several benefits for the company.
Over the years, WFM observed that the rank and file employees consulted the salary
book very rarely, as they knew that the pay at their level was more or less
standardized across the organization. However, people in leadership positions (like
store leaders) often kept track of the earnings of their counterparts at other stores, as
they were interested in knowing their earning potential at the company.
Mackey said that regional presidents and people in the top management often
challenged him when they felt that they were being paid less than their counterparts.
He disclosed that he often used earnings comparisons like a „carrot‟, to motivate his
managers to perform better. (Refer to Exhibit IX for the 2005 earnings of the top
executives at WFM).

22
“Whole Foods – A Disciplined Democracy,” www.freibergs.com.

254
Whole Foods Market’s Unique Work Culture and Practices

Exhibit IX
Compensation of WFM‟s Top Executives
Name and Other Stock
Salary Bonus
Principal Year Compensation Options
($) ($)
Position ($) Granted
John P. 2005 356,000 126,000 460,000 17,000
Mackey
2004 342,000 118,000 – 13,750
Chairman of
the Board and 2003 326,000 114,000 – 8,000
Chief
Executive
Officer
Glenda 2005 299,000 170,000 – 17,000
Flanagan
2004 277,000 128,000 – 11,500
Chamberlain
Executive 2003 264,000 94,000 – 8,000
Vice
President and
Chief
Financial
Officer
A.C. Gallo 2005 314,000 176,000 – 17,000
Co-President 2004 296,000 88,000 – 13,000
and Chief
Operating 2003 282,000 104,000 – 8,000
Officer
Walter Robb 2005 314,000 155,000 – 17,000
Co-President 2004 296,000 163,000 – 13,650
and Chief
Operating 2003 282,000 85,000 – 8,000
Officer
James P. Sud 2005 299,000 147,000 – 17,000
Executive 2004 277,000 128,00 – 11,500
Vice
President of 2003 264,000 94,000 – 8,000
Growth and
Business
Development
Lee Valkenar 2005 299,000 128,000 – 17,000
Executive 2004 268,000 97,000 – 19,250
Vice
President of 2003 255,000 106,000 – 6,000
Global
Support
Source: Annual Report 2005, www.wholefoodsmarket.com

255
Enterprise Performance Management

WFM also had a salary cap in place, where the CEO could make not more than 14
times the annual average salary of full time employees at the company. 23 This was a
notable fact in a business environment where CEOs were increasingly being criticized
for huge pay packets, which often bore little relation to performance. Another notable
fact was that all the full-time employees at WFM were eligible for stock options, and
the company reported that on an average more that 90 percent of the options issued
went to non-executive employees.

A Metrics-Based Culture

Everything that was done at WFM was measured. This measurement was not confined
just to the corporate level. At several individual stores, the previous day‟s sales,
broken down by team, were posted at a prominent spot in the store for all employees
to refer to. Some of the stores even listed the sales they had had on the same day the
previous year, to encourage comparisons by employees. Store sales broken down by
team were also shared periodically across the entire WFM system.
In addition, there were monthly profitability reports. The profitability report analyzed
the profitability of each store by taking into account its operating costs (wages and
salaries, product costs, etc) and the sales. This report was not circulated publicly, but
was freely available to anyone who wanted to see it. The profitability report was a
significant source of information for team leaders and store managers when they had
to make staffing and product ordering decisions.
WFM also conducted an annual employee morale survey across the organization, the
results of which were made available to all the employees. This survey was usually a
comprehensive exercise, which questioned frontline employees about their confidence
in their team leaders, store managers, and the top management. It also asked questions
about employees‟ fears and frustrations at the company, and whether they thought the
company seemed to be straying from its values.
Although some people questioned the wisdom of disclosing critical information to
employees, Mackey said that he was not worried about the disclosures, as WFM was
in the process of creating a „high trust‟ organization.

Competitiveness and Gainsharing


WFM‟s culture of teamwork and transparency promoted intense competition between
its different teams, stores, and regions, with each trying to outdo the other in service,
quality, and profitability. The company encouraged comparisons of performance and
competitiveness among the employees, and leveraged on competition to create a
culture of excellence. It did this by linking bonuses, rewards, and promotions directly
to the performance of the team or the store.
Competition existed across the entire WFM system. Teams competed against
themselves in terms of their own goals of sales, growth, and productivity. They
competed with other teams in the same store, and also with similar teams in other
stores and regions. Stores also competed against each other, and regional competition
too was common.
WFM‟s sharing of financial information played an important role in promoting
competition at the company, as people knew exactly how they were performing vis-à-
vis others in the system. All stores competed against each other regardless of size. For

23
“Declaration of Interdependence,” www.wholefoodsmarket.com

256
Whole Foods Market’s Unique Work Culture and Practices

instance, even if a small store could not match a larger store‟s sales numbers, it could
try to beat it on dimensions like growth rate, customer service, or employee morale.
WFM said competition created a greater sense of accountability among the employees
than would have been possible if targets and goals had been imposed on them from
headquarters. Teams set ambitious targets, and worked toward achieving them. The
company said that pressure for performance, which came from peers rather than from
headquarters, was an effective motivator for the employees.
WFM had a system of peer reviews, which was used to promote competition within
the company. Through peer reviews, teams benchmarked their performance against
that of other teams. One important peer review activity was the „Store Tour.‟
Periodically each WFM store was toured by a group of employees from another
region. The visiting groups were usually quite large (between 35-40 people) and
comprised regional leaders, store leaders, as well as team leaders from operational
departments within stores (like produce or bakery). The visits generally lasted two
days, and consisted of intensive rounds of reviews, performance audits, and feedback
sessions with the leaders of the store being reviewed.
The results of these reviews carried so much weight within WFM that employees
started going out of their way to spruce up their stores before a visit was due.
Reportedly, employees sometimes came in during the early hours of the morning to
clean the stores and prepare special souvenirs for the visitors. The management
eventually realized that this was getting too exhausting for the staff, and asked the
employees to tone things down.
Another important review tool was the „The Customer Snapshot,‟ known as the TCS
review within the company. Unlike the Store Tour, TCS was a surprise inspection of
stores. Each store was toured by a regional leader or someone from headquarters
every few months, and rated on various dimensions including cleanliness, layout,
customer service, and ambience. The TCS review generally lasted a full day, and
these ratings too were important.
The intensity of competition was one of the reasons why team members were tough
on new hires, and only voted in favor of people who, they thought, would improve the
team‟s productivity. All team members had a vested interest in the performance of the
entire team because of WFM‟s „gainsharing‟ program. Because of this program,
efficient workers meant monetary benefits for the entire team. This was a major
motivator for employees to perform better and also to ensure that their colleagues too
performed well.
WFM‟s gainsharing program tied team bonuses to sales per labor hour, which was the
most important measure of productivity at WFM. Under the program, every
department was given performance targets and a monthly labor budget within which
to achieve them. If a team met its goals without spending its entire budget, a part of
the surplus was divided among the members of the team. The idea was to encourage
employees to work more efficiently to increase their earnings. Therefore, in effect, the
employees had a stake in the profitability of the company.

Mackey‟s Influence on WFM‟s Culture


Like other companies whose cultures have been shaped by their founders, WFM was
also significantly influenced by Mackey and his leadership style. Mackey, by his own
admission, was a maverick who took a variety of courses – mainly in philosophy and
religion – at college, but failed to get a degree. He dropped out of two different
colleges to „search for the meaning of life‟. After dropping out of college he lived in a
commune and became a hippie. This was when he learned about vegetarianism and

257
Enterprise Performance Management

natural living. Mackey said that he was a libertarian 24, and always voted for the
libertarian candidate in the US elections.
Mackey‟s unorthodox leadership style was believed to be responsible for transforming
WFM into one of the most highly valued companies in the extremely competitive
retail industry. (At the end of 2005, WFM was valued at around $9 billion).
Although he did not receive any formal business training, and initially found it
difficult to cope with the demands of business, Mackey seemed to have innate
business sense and a way with people. This was apparent even in the early years of his
business career. When Mackey decided that he would do better to merge Safer Way
with Clarksville Natural Grocery, he reportedly went up to Weller and Skiles and said,
“We‟re gonna open a 10,000-square-foot store about a mile from here. Wouldn‟t it be
a lot more fun to join forces together? Rather than compete? When our store‟s gonna
be four times bigger than yours?”25 This apparently convinced Weller and Skiles to
join with Mackey.
Mackey‟s approach to running WFM was quite informal. Reportedly, he regularly
wore shorts and hiking boots to work, sometimes even to business meetings, and often
signed his company-wide emails “Love, John,” according to a posting on a blog. 26
In contrast to the archetypical CEO, Mackey eschewed most of the trappings of his
position. He traveled in the cheapest rented cars and flew on commercial flights. A.C.
Gallo and Walter Robb, co-presidents of WFM, regularly stayed at Mackey‟s house
when they went to Austin on business trips, sometimes even helping with the
domestic chores. According to some company insiders, Mackey was not a manager in
the traditional sense. “He‟s an anarchist,” said one former WFM employee who had
reported to Mackey when he worked at the company. 27 Mackey was also a keen
observer, and frequently visited WFM stores at different locations to get the „pulse of
the business‟.
This casual attitude and sense of informality pervaded the entire WFM system. Many
employees sported tattoos, body piercings, and spiked hair. All of them also shared a
passion for food, especially organic products, and were always ready to answer any
queries customers had about natural and organic foods.
WFM‟s culture was nurtured by Mackey as well as the company‟s employees. It was
said that all the business meetings at the company ended with a round of
„appreciations,‟ where each participant said something complimentary about the
others at the meeting.
WFM also took care to see that the strength of the company‟s culture was not
attenuated as the company grew. Whenever the company opened a new store it
ensured that at least one-third of the employees in the new store came from existing
stores. Old employees were already familiar with the company‟s culture, and in
Mackey‟s words, provided the „starter culture‟ at the new stores. It was an effective
way of transferring the company‟s values, according to analysts.

24
Libertarianism is a political philosophy advocating that individuals should be free to do
whatever they wish with their person or property, as long as they do not infringe on the
liberty of others. Libertarians hold as a fundamental maxim that all human interaction
should be voluntary and consensual. They maintain that the initiation (or threat) of
physical force against another person or his property, or the commission of fraud, is a
violation of that principle.
25
“John Mackey: Not Your Average Grocer,” www.cbsnews.com, June 4, 2006.
26
www.kottle.org
27
Charles Fishman, “The Anarchist‟s Cookbook,” Fast Company, July 2004.

258
Whole Foods Market’s Unique Work Culture and Practices

The Criticism
Although WFM was widely praised for its strong culture and positive work
environment, the company also came in for some severe criticism on its anti-union
stand. Mackey believed that unions were the „bane of business,‟ and that they created
more problems for the workers than they solved.
Based on this belief, WFM discouraged unionization at its stores. This earned Mackey
a lot of flak from unions as well as other activists, who thought that he was somehow
serving his own ends by preventing workers from getting a voice at the company.
Mackey countered this allegation saying that there was already a high level of
empowerment at WFM, and he did not think that WFM employees needed the support
of unions to make their opinions and needs known to the management. “We‟re not
anti-union. We‟re beyond union,” he said. 28
However, some people felt that WFM‟s talk about „empowered employees,‟ when it
actually did not allow employees a voice, was hypocritical. They said that the concept
of empowerment at WFM seemed to mean that the company would only listen to
employees who said what it wanted to hear. Apparently, union supporters felt a strong
need for a union at WFM, because of the company‟s lower than average wages at
some locations, and the absence of a legally binding grievance procedure, among
other things.
It was alleged that WFM prevented unionization by systematically firing all the
people who showed signs of wanting to form a union. Workers at several WFM
locations alleged that the moment the management spotted signs of unionization, it
either warned employees of drastic consequences, or fired them on some trivial charge
or the other. WFM, however, denied these allegations.
Union supporters alleged that whenever WFM acquired a new company, it replaced
all union workers with non-union employees. In 1997, when the company bought two
Westward Ho stores in Los Angeles, it was alleged to have fired 70 unionized
employees and replaced them with new recruits. 29
In July 2002, when employees at the Madison WFM voted to become the first
unionized store in the WFM system, the management refused to recognize the vote.
After the union vote was passed, the company‟s lawyers reportedly postponed a
meeting between the union officials and the management for several months, saying
that the top management was “too busy to pencil in a meeting.”30
When the meeting finally happened, the management rejected all of the workers‟
proposals outright and did not bring any alternative proposals to the table. Managers
at other stores portrayed the arrival of the union as a „tragedy‟ engineered by „outside
organizers‟. This made some observers question the company‟s claims of democracy
and empowerment. Supporters of WFM however argued that the company was only
against unions, and that it empowered workers in every other way.
Labor‟s right to organize was a right protected by federal law in the US, and WFM
said that its employees were free to join a union if they chose. However, it added that
unions did not fit in with WFM‟s ethos. “If our team members ever felt that they
needed to pay a third party to represent their interests with the leadership of Whole

28
Wendy Zellner, “Whole Foods Market: Moving Tofu into the Mainstream,”
BusinessWeek, May 25, 1992.
29
“Beyond Unions?” www.metroactive.com, September 3, 1998.
30
Mark T. Harris, “Welcome to „Whole-Mart‟: Rotten Apples in the Social Responsibility
Industry,” Dissent, Winter 2006.

259
Enterprise Performance Management

Foods, then we have fallen grossly short in upholding a core value of the company,”
said president Peter Roy.31
WFM‟s gainsharing program also met with some criticism. Detractors of the program
said that gainsharing was a sham, and that it took undue advantage of employees. At
WFM, small departments with profitable products (like meat and vitamins) fared
better than departments with unprofitable or slow-moving products. Small
departments with lower workloads were able to achieve their targets with fewer
employees. However, teams like cashiers and kitchen staff were always under
pressure because of the hectic nature of their jobs. Because of the gainsharing
program, even the busy departments tried to manage with fewer employers (to lower
their labor cost), and eventually ended up over-taxing existing employees.

Conclusion

Despite the criticisms against its stand on unions, WFM was acknowledged to be one
of the most successful businesses in the US retail sector. At a time when retail giants
were facing low margins and almost zero same store growth rates, WFM stood out
prominently as a success, said analysts.
In the early 2000s, several mainstream grocers, encouraged by WFM‟s profit margins,
started adding organic and natural products to their product line. For example, as a
part of its restructuring program in the early 2000s, Safeway set up several Lifestyle
stores across the US. These stores differed from regular Safeway stores in ambience,
and were thought to have been modeled on the lines of WFM, where great emphasis
was placed on food presentation. Many of the Lifestyle stores carried a bigger range
of natural and organic products than traditional Safeway stores.
In early 2006, Wal-Mart Stores Inc.32 announced that it would increase the number of
organic products it carried in its stores by the end of the year. Around the same time,
Publix Super Markets33 also announced its plans to open new stores called Publix
Greenwise Markets at some locations in the US. These new stores were to focus on
natural and organic foods. Analysts however, said that WFM succeeded because it
was more than a mere niche retailer – the company‟s unique culture played an equally
important role in its success.
In the 2000s, the biggest challenge that WFM faced was its ability to sustain the
unique elements of its culture as it grew in size. According to analysts, at 184 stores,
WFM was still a fledgling in the retail industry. Therefore, it was too early to say
whether or not the company would be able to sustain its culture as it grew bigger.
However, Mackey said, “One of the keys to understanding this company is that the
people who started it did not know how they were supposed to do it. This is the way
our culture has developed.”34

31
“Whole Paychecks?” www.metroactive.com, September 3, 1998.
32
Wal-Mart was the largest retailer in the world. In fiscal year ended January 2006, the
company had sales of more than $315 billion and employed around 1.8 million people
around the world.
33
Publix Supermarkets was a Florida-based privately owned chain of supermarkets.
34
“12th Annual Business Ethics Awards,” Business Ethics, November/December 2000
Volume 14 #6

260
Whole Foods Market’s Unique Work Culture and Practices

Additional Readings & References:


1. Wendy Zellner, “Whole Foods Market: Moving Tofu into the Mainstream,”
BusinessWeek, May 25, 1992.
2. Charles Fishman, “Whole Foods is all Teams,” Fast Company, April 1996.
3. Charles Fishman, “Whole Foods Recipe for Team Work,” Fast Company, April 1996.
4. “Whole Paychecks?” www.metroactive.com, September 3, 1998.
5. Eric Bates, “Minding The Store,” Texas Observer, Septmebr 11, 1998.
6. Katherine Noyes, “Catch 'Em Napping,” CIO Magazine, August 15, 1999.
7. “Whole Foods Market Ranked as One of The „100 Best Corporate Citizens,‟”
CSRWire, March 23, 2001.
8. “Whole Foods Market Reminds Consumers That How Their Food Tastes Has
Everything to Do With How It Is Grown,” CSRWire, January 3, 2003.
9. “Whole Foods' John Mackey Honored as Winner in Retail/Consumer and Overall,”
http://entrepreneurs.about.com, November 22, 2003.
10. “12th Annual Business Ethics Awards,” Business Ethics, November/December 2000
Volume 14 #6
11. R. Michelle Breyer, “Whole Food's Vote to Unionize Upsets Libertarian Founder,”
The Austin American-Statesman, June 6, 2003.
12. Charles Fishman, “The Anarchist‟s Cookbook,” Fast Company, July 2004.
13. “An Organization Based on Love Instead of Fear,” www.crainc.com, July 21, 2004.
14. Amanda Griscom Little, “The Whole Foods Shebang,” Grist, December 17, 2004.
15. Seth Lubove, “Food Porn,” Forbes, February 14, 2005.
16. Walter Robb, “Our Competitive Weapon is our Culture,” Enlightenment Magazine,
March – May 2005.
17. Mark T. Harris, “Alternative Media Quietly Sells Out to Whole Foods Market,”
www.zmag.org, April 28, 2005.
18. “The Winning Ways of Whole Foods Market,” Brand Autopsy, October 16, 2005.
19. “Eating Too Fast At Whole Foods,” BusinessWeek, October 24, 2005.
20. Ryan Underwood, “Employee Innovator Runner-up: Whole Foods Market,” Fast
Company, October 2005.
21. Min Sim, “Whole Foods tycoon imparts wisdom to students,” The Wharton Journal,
April 17, 2006.
22. “Greenest Grocer,” BusinessWeek, Summer 2006.
23. Matthew Boyle, “Tomorrow‟s Wal-Mart‟s?” Fortune, June 2, 2006.
24. “John Mackey: Not Your Average Grocer,” www.cbsnews.com, June 4, 2006.
25. Jon Springer, “United Seeks Whole Foods Pact,” Supermarket News, June 12, 2006.
26. Bruce Horovitz, “Supermarkets copy Whole Foods' shopping list,” USA Today, June
28, 2006.
27. “Mimicking Whole Foods Market,” Brand Autopsy, June 29, 2006.
28. “The Winning Manager: Putting People First,” June/July 2006.
29. Connie Glaser, “Mackey changed whole idea of grocery stores,” Atlanta Business
Chronicle, July 14, 2006.

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30. Paula Lavigne, “Is organic food the real deal?” The Dallas Morning News, July 17,
2006.
31. “Whole Foods – A Disciplined Democracy,” www.freibergs.com.
32. “What WFM is Saying About Unions,” www.wholeworkersunite.org
33. www.amazon.com
34. www.hoovers.com
35. www.klru.com
36. www.wildoats.com
37. www.safeway.com
38. www.wholefoodsmarket.com

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