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Leadership Lessons from Whole Foods’ Journey to Amazon

Founded in 1978 in Austin, Texas, Whole Foods Market is a leading natural and organic foods supermarket, boasting the distinction of being the first national “Certified Organic” grocer.

With more than 87,000 team members and 460-plus stores, the international chain has consistently been praised as a great place to work. In fact, according Jena McGregor’s article, “Five telling things the Whole Foods CEO said about the Amazon deal in an employee town hall,” Whole Foods is known for its long-standing generosity to employees – store discounts, low-cost healthcare plans and benefit voting rights, among them. McGregor notes that this is built on the mantra, Treat employees right, and they’ll in turn treat customers well, leading to higher profits.

Clearly, something in this notion has worked well, considering the supermarket chain’s sales soared to $16 billion in fiscal year 2016.

While current Whole Foods Market CEO John Mackey intends to maintain this core value after the acquisition by Amazon, he also intends to embrace several changes and leverage new strategies based on Amazon’s strengths, including:

  • Become more customer-centric – Mackey intends to make significant investments in the customer experience without sacrificing employee benefits like rollover paid time off. Leadership lesson learned: Mackey was wise to let people know that one positive change doesn’t have to be at the expense of another. That is to say, he set the stage for casting the new customer-centric vision as it aligns with, rather than supersedes, the employee-centric vision to which employees have been accustomed for many years.
  • Become ‘one large tribe, one large family’ (with Amazon) – Mackey asserts that culture change is inevitable but that change “doesn’t necessarily mean a bad thing.” Leadership lesson learned: Mackey set the tone for embracing change rather than running from it.  This was wise, as Whole Foods Market employees are likely questioning “what life will be like” after the acquisition is finalized. In this way, Mackey modeled a willingness to Take Interpersonal Risks (a dimension of Learning Agility) so as to learn from others.
  • Allow new “formats” to evolve – Although Mackey insists that the high-quality standards for which Whole Foods Market is known will remain after the deal with Amazon goes through, he also acknowledges that, over time, “new formats that wouldn’t carry the Whole Foods brand” could emerge. For example, Amazon could decide to add a new brand with lower prices as a way to bring in new customers. Leadership lesson learned: Given the importance of brand recognition, particularly in the midst of change, Mackey is smart to acknowledge that there may be some “growing pains” as employees and customers see a shift in the supermarket chain they have grown to love. Further, Mackey’s own learning agility is evident as he demonstrates a willingness to Experiment and take risks, even when the supermarket chain has done well, in order to remain competitive and continue to thrive and grow.
  • Boost and leverage technology – Although they have squelched rumors of layoffs and automation, both Amazon and Whole Foods Market plan to leverage Amazon’s successful use of technology within the supermarket industry, as well. What that will look like remains speculation at this point (e.g., drone deliveries, comparison shopping reductions, etc.), but Mackey makes it clear that he intends for the chain to go from “class dunce” to “the industry’s valedictorian” when it comes to technology. Leadership lesson learned: Mackey demonstrated an ability to “think outside the box” when discussing how a relationship between Amazon and Whole Foods Market could be mutually beneficial.  Despite the chain’s long-standing success, he was not afraid to Reflect on (dimension of Learning Agility) and acknowledge a shortcoming – in this case, technology – and demonstrated a willingness to learn from other’s success in this area.
  • Move beyond short-term quarterly earnings and consider long-term value – Mackey applauds Amazon’s “authenticity” and willingness to create strategic long-term solutions rather than “selling out” – literally – as some investors believed Whole Foods Market should have done. Leadership lesson learned: By staying on as CEO after the Co-CEO’s departure in fall 2016, and again through the acquisition by Amazon, Mackey demonstrated considerable Performance Risk Taking (dimension of learning agility).

In light of the five strategies and lessons learned above, Dr. Rebekah Cardenas, vice president of business development and assessment solutions at EASI·Consult® concludes that Mackey’s ability to think strategically – coupled with his willingness to take risks and embrace change – positions him well to successfully enable and inspire Whole Foods Market employees through what may prove to be one of the more successful acquisitions of our time.

To read more about Whole Foods Market’s journey, click here.

Rebekah Cardenas, Ph.D., is vice president of business development and assessment solutions at EASI·Consult®.  EASI·Consult® works with Fortune 500 companies, government agencies, and mid-sized corporations to provide customized Talent Management solutions. EASI·Consult’s specialties include leadership assessment, online pre-employment testing, survey research, competency modeling, leadership development, executive coaching, 360-degree feedback, online structured interviews, and EEO hiring compliance. The company is a leader in the field of providing accurate information about people through professional assessment. To learn more about EASI·Consult, visit www.easiconsult.com, email ContactUs@easiconsult.com or call (800) 922-EASI.

 

 

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