Why John Mackey Was the Most Over-Rated CEO in Retail History

The keyword here is: over-rated. What I’m about to say stems from internal and external sources gathered over the years but primarily emerges from my interpretation of Whole Foods’ fundamental role in modern food culture and modern retail. As many of you know already, I’m not a big believer that founders should take too much credit for their success. Customers build brands. Not founders. You feed them something memorable and keep it available, which is an enormous challenge, yes.

Too often, in my experience, the founder/CEO gets in the way so much, it decelerates growth with myopic decisions that don’t follow the consumer. I believe Whole Foods is an example of the founder continually getting in the way.

Here’s where Mackey got in the way as an otherwise brilliant and visionary retail founder:

1. He insisted that Whole Foods had been and would be built on a growing desire for healthy eating in America, when, in reality, it is the hedonic and culinary genius of Whole Foods’ perimeter departments that built the brand and the business’ profits. He wouldn’t let go of the original mission from the health-food-store-land.
2. He insisted on becoming “America’s grocery store” when the smarter positioning to own was America’s specialty grocer – using the rising upper-middle-class desire for artisan everything to maximize profits. Walmart is already America’s grocery store which requires you to be mediocre. It was a stupid objective unless your goal was ideological conquest.
3. He refused to let unprocessed or near-natural market leaders in select, traffic-driving categories (Lay’s chips, Triscuit, Nature Valley, etc.)  onto the shelves with his ideological merchandising strategy. This artificially reduced traffic and basket size and perpetuated a mainstream stigma of the chain as a cult.
4. Mackey’s Ayn Rand-style libertarian politics demoralized staff.
5. He encouraged a cultish attitude at work that was seen as snobby to prospective customers in the early years.
6. He refused to launch any rewards program for customers despite the proven logic for doing so in the supermarket industry, and the brand-building goodwill would have generated for early, loyal consumers (who complained the most about ‘whole paycheck’ in my research).
7. He’s a notoriously abrasive, combative, and non-collaborative person who should work alone, not inside a high-growth organization. Consequently, he alienated many of his top lieutenants, no doubt leading to all sorts of underperformance and turn-over that reduced the organization’s actual topline potential. 
   

That’s my ‘hot take.’ It will be interesting to see how much Amazon can accelerate some of the above recommendations. Their Amazon Fresh grocery stores reveal that they agree with much of my above critique.