325: John Mackey, Co-Founder and CEO, Whole Foods Market
Right now, every company needs strong leadership to guide them through these challenging times. Thankfully, Whole Foods Market co-founder and CEO John Mackey is well versed on the principles of leadership and is launching his latest book, Conscious Leadership, this month to help other founders put those ideas into practice.
In addition to the book, people can see Mackey’s approach to leadership in action with Whole Foods. While Mackey is grateful that his stores are still in full operation during Covid-19, he doesn’t try to hide the fact that circumstances have been extremely challenging—from rapidly scaling its supply chain to accommodate the sudden demands of customers to generating almost no revenue as a result of all the sanitation products the business has had to invest in.
But these obstacles don’t bother Mackey. As a conscious leader, his priority is making sure that every single one of their 100,000 team members has access to the resources they need to stay safe at work. He has also raised every in-store worker’s pay by $2 per hour, provided two extra weeks of sick pay for those who have to quarantine, and is giving unlimited callouts during this time.
In this conversation, Mackey shares more about what it means to lead with love, how founders can attract and retain great talent in this challenging environment, and so much more. If there’s any other type of content you’d like to see that would be valuable to you during this time, please don’t hesitate to reach out at [email protected]
- An overview of Mackey’s best-selling book, Conscious Capitalism
- A sneak peek into Mackey’s latest book, Conscious Leadership, and what inspired him to write it
- The two most important pillars of leadership
- Why Mackey believes in leading with love
- How Mackey is putting conscious leadership into action during the pandemic
- The challenges Whole Foods has been dealing with from a supply chain and revenue perspective
- Why being an Amazon subsidiary adds a layer of complexity to the Whole Foods business
- How to attract and retain great people during these challenging times
- What Mackey has done to support Whole Foods employees during Covid-19
- Why Mackey believes in the win-win-win mindset, and how this attitude can guide your business decisions
- The importance of leading by example
Full Transcript of Podcast with John Mackey
Nathan: As you begin to build your company and build your team, you really start to understand the importance of leadership, and really how to influence others. And I have to say, this has to be one of my most favourite interviews that I’ve done in a while, where John and I just have candid conversations. Like, you’re going to learn how to influence people, what to do as your company grows. What if people are not growing at the speed that the company’s developing? And even how they’re handling this crisis and everything that he’s doing. I would have thought that Whole Foods would be booming during a time like this, but yeah, fascinating conversation. I hope you get a tonne out of it.
This was really, really fun. And if you guys are enjoying these episodes, please do take the time to leave us a review. It would help us more than you can imagine. And as you guys know, we’re on a mission to build a brand that helps tens of millions of people every single week, with our content to help you start or grow a business. Please do share this podcast, our work with your friends, check out our other trainings, our other videos, our other articles, we’re here to help serve you however we can. All right guys, that’s it from me, now let’s jump into the show. The first question that we ask everyone that comes on is, how’d you get your job?
John: I created my job, right? Entrepreneurs don’t really have jobs, they have passions. They have something they’re trying to bring to life, something they’re trying to create. So I’ve never thought of it as a job, I’ve always thought of it as more of a passion, a mission, a purpose, meaning for my life, largely. I’ve done Whole Foods for 42 years.
Nathan: Yeah. And how did that come about? How did it start? Everyone knows Whole Foods. My mom was excited. Every time I’d go to the States, she loves supermarkets, and she always wants to check out Whole Foods, because you’ve got… she finds it an interesting thing when you travel to a country. So very well known.
John: Obviously, I do the same thing when I travel. I go look at …, try to get some ideas. It’s always a tricky thing when you want to start an origin story, because you could go back to the big bang, right? And work our way forward. But in this case, we’ll just say that when I was about 23, I moved into this vegetarian housing cooperative, and I wasn’t a vegetarian at that time, but I was interested in all things counterculture. And I just thought I’d meet some really cool people, maybe some really cool women as well, in a vegetarian co-op. And I did.
And I had a food awakening at that point. I learned about healthy eating and natural foods and organic foods. I learned how to cook while I was there. And for the first time I realised really, I mean, I knew if… because I’d always been a bit of an athlete, so I knew that if you worked out you’d feel better, but it never occurred to me that what you ate… I always thought that was more like fuel, right? Fuel the machine. But it’s actually, obviously, a lot more complicated than that. And your health, your vitality, your energy levels, are very dependent upon what you ate.
And I learned that for the first time when I moved into that cooperative. So I became the food buyer for that cooperative. And then I went to work for a small, natural food store. Learned about retailing, came home to the co-op and talked to my girlfriend one night and said, “Renee, what do you think if we open up our own store?” And she loved that idea. And so we did that together and co-founded the company back in 1978.
Nathan: Yeah. Wow. Yeah, you guys are massive. Very, very well-known. So-
John: Part of the success, if you’re going to build something great, part of it is your creativity and having the right idea and building a good team, and all those things that we’ll probably talk about, but it didn’t hurt that the world was starting to move this way. And we were just early to the party. You could say that’s true of almost all the really successful entrepreneurs. Bill Gates got into software, right when there was a personal computer revolution. And Steve Jobs, he wasn’t the first personal computer, he was the one that saw the potential of it being such a great tool. So I think that’s true for so many stories.
Nathan: Yeah. That’s true. So you wrote a book, it’s called, Conscious Leadership. Funnily enough, Conscious Capitalism, when I went out and started Foundr, one of my mentors, he said, “Yeah, look this is a big thing. You’ve got to read this Conscious Capitalism book.” And they’ve used a lot of the principles behind Conscious Capitalism for their company. You might know it. Do you know Intrepid Travel?
John: I’ve heard that name before, but I don’t know the business.
Nathan: Yeah. They’re one of the largest adventure travel companies in the world. So yeah, that book-
John: Are they an Australian company?
Nathan: Global, but based in Australia. Yeah, the HQ’s in Melbourne Australia. But yeah, so well-known book, you’re releasing a new book called Conscious Leadership. What compelled you to write that book, and what is the premise?
John: Well, conscious capitalism basically has four pillars to it. So the first pillar is purpose. Every business, every organisation has the potential for a higher purpose that, besides just maximising profits, making money is essential to business, but it doesn’t logically follow that that’s why the business exists. We think that’s a myth and we argue against it in conscious capitalism. Secondly, there are stakeholders in a business and they all matter, and they’re somewhat interdependent. Customers, employees, suppliers, investors, the communities that we’re a part of. They’re all trading with the business voluntarily, and they’re all gaining from it. So stakeholder philosophy is a second pillar of conscious capitalism.
Third is we need a different kind of leadership. One that is more of a servant leader, that serves the higher purpose of the organisation, serves the stakeholders, is attempting to make the organisation… optimise the organisation. And fourth we need cultures that human beings can flourish in. That’ll lead to more successful business, but we spend a lot of time of our lives at work. It might as well be something we enjoy doing and that we don’t hate it. I mean, a lot of statistics show that only about 30% of the people that work in a job, at least in the United States, are particularly engaged in it. It’s just a paycheck for them. And so creating a conscious culture is one where people flourish.
So you’ve got purpose, stakeholders, conscious leadership and purpose. And that was a very successful book. It’s been printed all over the world. And when I go talk about it, I got a lot of questions about the leadership. Because who’s going to go hear somebody, a business guy talk about conscious capitalism? Are mostly people that are leaders and interested in how they can be more effective leaders. And we have two chapters in the book on leadership. And that’s where I got the most questions. And so I realised we could go so much deeper on this than we went in Conscious Capitalism.
So we basically just took that pillar of conscious leadership and we’ve expanded it into book form and gone into much deeper. It’s something I felt like I had to write. It’s part of why Whole Foods has been successful. And it’s my philosophy of how you build a company, how you lead a company. I mean, the very thing that your organisation founder’s trying to do, we talk about that in the book.
Nathan: Yeah. And I’m curious, during times like these, we’re both in lockdown, it looks like you’re at the office.
John: I’m in my office. I am.
Nathan: But yeah. So it’s starting to lift. It’s late May, 2020. This is like history in the making. I’d love to hear, what is your take on leadership? How do you lead a company during times like these?
John: I’ll tell you, it’s been difficult. It really is. And Whole Foods is part of the Amazon now. So what we’ve learned is that there’s probably not a company in the entire world that’s more under the microscope than Amazon. I mean maybe Apple or Google, but Amazon’s right up there. They are just… Everything Amazon, the media just pours over. So we’ve learned the hard way that, as Whole Foods now being a subsidiary of Amazon, that anything Whole Foods does that might reflect badly on Amazon, or the media could blow up and make a big deal out of, we have to be careful. And so that means a lot of things that Amazon does, they want Whole Foods to do. And a lot of things they don’t do, they don’t want Whole Foods to do. Because of the potential blowback that can occur, which makes perfect sense if you think about it.
So that’s been difficult in this crisis because we have to think about what’s best for Whole Foods, but we also, at the same time, we should be thinking about what’s good for Amazon. And when you’re in crisis, like we are, I mean, think about it, our stores, all our team members are wearing a mask every day. We’re disinfecting the stores. We’re giving masks to customers, encouraging to were a mask, we’re social distancing six feet apart. That’s not the way Whole Foods was just a few months ago. We were packed stores. And we limit the number of people in our stores so people won’t get too close together. It’s been very crazy. Our prepared foods stuff we would sell, like our salad bar, our [inaudible 00:13:03] bars, those have been shut down. And at the same time our sales have exploded in other categories. So we’ve had supply chain challenges.
So it’s about how do we keep our customers healthy? How do we keep our team members healthy? How do we get the supply that we need to sell to our customers? And also home delivery and pickup. Those have exploded. I mean, it went up 400, 500% from what they were a year ago, and systems weren’t geared up to handle that. So we had to get over some crashes, and we’ve had to queue people up before they could become customers, and adding additional capacity on. It’s been it… I mean, it hasn’t been fun. Except for one thing, we are in business. We were not shut down. So I think people that were operating restaurants or businesses that government shut down will have much sympathy for me talking about how stressful it’s been, because we’ve had a busy time. It’s just sort of every day is a new crisis. Something’s going wrong somewhere that we have to deal with. But I suppose I prefer that to basically sitting around twiddling my thumbs, hoping the government will let us open.
Nathan: So obviously you guys are in kind of the five or 10% that have been able to thrive just due to this economic change.
John: I mean thrive. Let’s think about that for a minute. Our sales are doing really well, but we’re not making any money. So I’ll go into-
John: Oh yeah, no. We’ve raised our pay. We raised our pay $2 an hour off of a high minimum wage starting pay of $15 minimum. Plus we’ve… Think about this for a minute. Just think about it. Just to give you an idea. So we have 100,000 team members that work for our company. And you get a new mask every day, or multiple masks, because maybe you’re going to throw that mask away. You might use three or four masks. So think about it. Each mask costs us about 80 cents. So every single day we’re going through several hundred thousand masks at 80 cents a pop. Every day. Every single day.
Just on mask alone. And then we’re having to… We give an extra two weeks of sick pay. Anybody that contracts COVID-19, or has to quarantine. So we’re paying that time for people as well. And the amount of powerful disinfectants we’re using to sterilise our store every day. When Amazon just reported their quarter, for example, they had a record sales, but Jeff Bezos announced, “We’re going to spend $4 billion next quarter trying to keep our stores and our facilities safe or safer.” So it’s a profitless time because of the additional costs that were unanticipated.
Nathan: Yeah. Wow. You wouldn’t think that, right?
John: No. You wouldn’t think it, but that’s the reality. I think that’s true for a lot of businesses, by the way, not just Whole Foods. I think a lot of the supermarket companies are experiencing similar things. Higher labour costs, higher cleaning costs. Some parts of their business aren’t doing well. Also, delivery is a less profitable business when people shop in the stores, because you do so much labour for them. You’re picking it in the stores and you’re packing it, then you’re delivering it to somebody’s home. If you’re a Prime member, you’re getting all that service for free, part of your membership package. So we’ve seen sales transfer over from in-store to more delivery and pickup. It’s just been a very interesting time. Without a doubt, there’s been no year of my life like 2020. I think I can speak for almost everybody on the planet, right?
Nathan: Yeah. No, it’s weird.
John: A weird time.
Nathan: Yeah, no, it’s been crazy. Coming back to the leadership piece, I guess, how do you lead during a time like this? Should you be open and honest with how the business is going, with your team?
John: Yeah, absolutely. You have to be, you have to tell… I think you should be open and honest with your team all the time. I think that’s just fundamental integrity, which is one of the leadership principles we talk a lot about in Conscious Leadership. If you want to build trust with people, you have to tell them the truth. Sometimes you can’t tell people things because the media might blow it all up and make it into a big deal. So sometimes you have to be a little cautious in what you share, but you don’t ever deceive people. Because telling lies is just unethical for one thing, but it also destroys trust, and if you want to be a good leader, people have got to trust you. They’ve got to believe that what you say is true.
Nathan: Yeah. Should you open up, like how honest and open should you be around your profitability, revenue? Because you don’t want to scare people either. They might be looking somewhere else or looking for another job.
John: No, our sales are strong and we’re not laying our people off. In fact, we give unlimited call-outs during this time, so anybody that doesn’t feel like coming to work for any reason… maybe they got a childcare issue, maybe they’re just nervous about COVID-19, it could be for any reason at all, it’s you want to take a day off… we’re having unlimited call-outs. We value our team, and we’re holding everybody together. Fortunately, our sales are strong enough to be able to afford to do that. I think a lot of companies that have been shut down, they’ve had to lay people off. They’ve had to, at least temporarily. I know that we haven’t had to do that. I’m thankful for that.
Nathan: What are some of the other principles from your latest book, The Servant Leader, that they’re relevant to people during this time?
John: Conscious Leadership. That’s the title of the book. It’ll be coming out on September 15th. That’s a publication date. Some of the other principles, one is integrity, and also purpose, I talked about purpose. I think a conscious leader has a strong sense of purpose, and he or she is able to communicate that purpose to people on their team, and purpose tends to unite people together. It brings them together. People need to feel that their work is making a difference in the world, that they’re creating value for other people.
In any business, practically any business… you can think of some exceptions… but 99% of what business does is creating value for other people. So your purpose lies in your value creation, whatever that might be. I talked about integrity. Also, the second chapter in the book is called Lead with Love. We think love is very important in business. It’s in the closet, it’s in the corporate closet for the most part, primarily because most of the metaphors people use to think about business are hyper-competitive metaphors. Whether they’re war metaphors, “Let’s roll over those guys”, “Let’s [crosstalk 00:00:04:52]-”
Nathan: “Kill or ….”
John: “Destroy them,” or they’re sports metaphors, “We’re winners. They’re losers. We’re the champions,” or they’re Darwinian metaphors, “Survival of the fittest. Only the paranoid survive. It’s a jungle out there.” Those metaphors, if we think of business that way, then we don’t really have a place for love. Yet love is the glue that holds the organisation together. Love is what will keep customers coming back again, and again, and again. So we think love needs to be let out of the corporate closet. It requires us to begin thinking about the business differently. Not in terms of this hyper-competitive metaphors.
It’s not that competition doesn’t exist in business, of course it does. It’s not that you can ignore that, but it doesn’t mean that’s the definition of what business is, winning, or killing the other guy, the competitor. It’s about creating value for your customers. You provide jobs for your employees. You trade, you have suppliers that you’re trading with, you’re creating value for them. They’re creating value for you. You have investors that you’re trying to give good returns on their investment for. You have communities that you live in, and you’re a good citizen in those communities. We have these greater responsibilities.
So love is at the essence of what business is, and yet business is disliked and mistrusted by most people because it’s seen as just greedy and selfish, and exploitative. That it’s a bunch of greedy bastards running around, just lining their own pockets. So business is oftentimes condemned as somehow or another almost unethical. So getting love and putting it at the forefront of what you’re doing, we think is a very important aspect of conscious leadership. Those are three qualities. We talk about looking… for example, I’ll give you a fourth one… finding win-win-win solutions.
We have a tendency to think win-lose. I win, you lose; or you lose, I win. But business is not about that. It’s really not. That’s getting back to that competition metaphor. Because customers are trading with you for their own benefit, right? Nobody takes a gun and sticks it to their head and says, “You have to trade.” They’re doing it because they believe it’s in their best interest to do so. Right? Same thing. Nobody forces people to work for you. If they don’t like their job, they can go find another job. Most of the time, maybe not right now in this massive layoffs that have occurred, but in general, there’s competitive alternatives out there.
So if you don’t pay your people well enough, or you don’t treat them well, they have alternatives in the marketplace. So you have to create value, a win for the employees, win for the customers, win for your employees or ‘team members’, at Whole Foods we call them. Suppliers, they don’t have to trade with you either, and you don’t have to buy from them. You make a trade and you’re both winning. So business is about win-win-win. Once you start to use that as a framework, it almost serves as a complete ethical framework. Because you can begin to think in every situation, “Is anybody losing here? Are any of my stakeholders losing?” And if somebody is losing, then maybe you don’t have the best strategy there. What’s a strategy that everybody can win at, where everybody’s better off for these trades being made? So a conscious leader is always looking for that win, win, win. Good for you, good for me, good for the larger community that we’re all part of.
Nathan: I see.
John: Conscious leaders, I can keep going on, conscious leaders got to think long term, just making the short-term win will not pay off for very long. You have to manage your business for the long term. And by the way, that’s one of things I love about being part of Amazon because they think really long term. And that was, when Whole Foods was independent, but a public company, it was a lot harder. We were under that quarterly earnings pressure that you hear so much about it. It really is real.
Nathan: When you say long term, how long term, and like would it be difficult for many companies during times like this, right?
John: Well, you can’t ignore the short term. It’s not like you… But I think you have to make decisions that if you sacrifice the long term for a short-term gain, it will eventually blow up on you. So you have to be looking for strategies that win in the long term, but don’t kill you in the short term. So you make investments that you think will pay off in the long term. For example, right now, in this very moment, we’re living in what used to be considered the long term. And the companies that are really successful today made investments in the past that are really paying off today, because they invested for the long term.
And I’ve seen this for companies. A lot of companies go public. They start chasing those quarterly earnings, trying to get the stock price up and they start making bad long-term decisions. Oh, we can’t miss the quarter here. So they do something that they know is stupid to do over the long term, but is going to help them right now get past this earnings. They might sell off a good business, make a profit so they can report that on their income statement. But that was a good business, and they’re not going to have those profits in the future. So you got to think long term and we go into that in some depth. And we give a lot of examples of how thinking long term pays off.
Nathan: And when you say-
John: You’ve got to continuously learn and grow, that’s another principle that we talk about in the book. That in some ways you can view life as an opportunity to continue to learn and grow. Every day if we’re not learning something new, if we’re not growing, if we’re not taking advantage of the opportunities, then I think we’re falling behind. Life is this adventure. I see life as an adventure. This will come natural to all people from Australia. Life’s a darn adventure, and we should make the best of it. And that’s when to make it an exciting adventure is to keep learning, keep growing, keep evolving, keep challenging yourself to be better and better and better. It’s continuous improvement.
And since we, everything we do in business, we do with a team. Then one of the chapters we have in the book is, how do you upgrade your team, constantly upgrade your team? How do you develop the team and make it better and better and better? Because ultimately you’ll be no better than your team. If your team sucks, so you’re going to suck too. And if your team is really good, if you hire great people and make sure they’re well-trained and you empower them and they’re creative, they make you look really good. A lot of my success in business has not come from me being some kind of specially wonderful genius. I just hired a lot of great people and together we’ve built a really successful business.
Nathan: Yeah, I agree. Let’s talk about team, because I think that is something that a lot of people don’t talk about. They talk about the shiny tactics and strategies, but what have you done over the years to attract great talent? And what do you look for in a person? Do you have a set of rules or principles when you’re looking to hire?
John: I do actually. And I’ve gotten better at it over the years. Like any skill, the more you practise it, the better you tend to get. I will also say that almost all the worst mistakes I’ve made in business, not all of them, I made some other boners, but most of the worst mistakes were people. Bad people decisions. Promoting the wrong person or hiring the wrong person or being slow to recognise that somebody wasn’t working out and keeping them too long. I think those are the tough decisions that a leader has to make. But what does, and answering your question, I think, again, there are several things that I look for. Since I think purpose is so important, I am looking for people that tend to align with the purpose of the company, that have passion for it.
That this is something, they’re not in it just to say, “Wow, when I worked for Whole Foods, this is a step up from me. I’m going to make more money.” I’m looking for people that are excited about what Whole Foods is doing, what our purpose is, what our mission is, and they want to get onboard and help us fulfil that mission better. So I’m looking for purpose. Obviously I think you’ve got to look for intelligence, not just analytical intelligence. I consider you got to hire smart people that’s kind of an ante to get into the game.
But also emotional intelligence, because increasingly it’s all about relationships, and people that are jerks, they’re not going to fit well in your culture. By the way, that adds to the next thing, which is, will they be a good cultural fit? Because I found a culture in an organisation is a bit like an immune system. People that don’t, that are … The immune system, when something comes into the body that the body doesn’t… That recognises this as invader, the immune system is activated to destroy the invader. Similarly, cultures will begin to try to repel elements that come into it that are dissident to the culture. It tries to protect itself. So cultural fit.
I did something recently. I did a calculation. That the last 16 executives that I’ve hired at senior levels, eight of them washed out because of culture. Half of them, only 50% made it. And they were all smart and they all were passionate. And a lot of them were aligned with our purpose. They just didn’t fit into Whole Foods’ culture and the culture rejected them and pushed them out, so. Cultural fit is very important. And finally, I’d say I look for integrity. If you can’t trust somebody, they’ll screw you in the end eventually. So somebody that’s honest, truthful, and wants to do the right thing. And if you surround yourself with people that will cut corners, eventually they’re going to cut a corner on you too and hurt the organisation.
Nathan: Yeah. I love that. You talked about something that I think will resonate with leaders, and that is keeping someone too long. Because it’s the hard thing to make that realisation. Like, what do you do there? How do you avoid that?
John: That’s such a good question, Nathan, and any organisation that’s successful and growing will outgrow some of its people. That’s just inevitable. And what I’ve learned is that oftentimes somebody gets promoted because they were doing a good job at their previous job. So they get promoted, but then they’re not doing such a good job. They’ve gotten promoted over their heads. And what the organisation generally does is fire them. And I just think that’s such a terrible thing. Here’s somebody who’s worked for you for 10 or 15 years or whatever. They’ve done a good job, they’ve been promoted maybe multiple times, but then they’ve gotten a job now that they can’t quite handle. You can work with them. You can try to help them, do some leadership development work with them, or maybe you get them a coach or you send them to a seminar to train. But even then maybe they can’t cut it.
Well, if they’ve been loyal to the company and they’ve worked hard, the rational thing to do is not toss them overboard, but to recycle them. Find another job for them where they can be successful again, because they’re loyal, they care about the company, they’re aligned with your culture and your purpose. They’re just over their heads. Don’t leave them in a position where they’re going to fail. Just recycle. And that’s what Whole Foods does.
Now, some people’s egos can’t handle being demoted back to a position, but most can, if you let them save face. If you let them make a move that’s not… Obviously they’re not being punished or made to look to be a failure to the rest of the organisation. And I think the culture, when you do that too, people are willing to take some chances, when they’re not sure of, because they know the organisation has their back and it’s not going to just throw them overboard if they don’t do well. They’ll get another shot.
Now that being said, there are times when you have to move people out, because they’re obviously incompetent and they just fail and fail and fail, and you just have to move them out. Or there could be a breach of integrity or they’ve done something dishonest. And oftentimes the culture just begins to select people out or get rid of people. And I found one of the most valuable tools, I talk about this in the book some, that will really help you be a more effective leader, is do 360 reviews with people and do a 360 review of yourself.
In a 360 review, you’re going to get feedback from their peers, from their people that report to them, and also from their bosses or the people above them. And some people manage their subordinates well, but don’t manage their peers well at all. Or some people kiss the ass of the person they’re reporting to, but is a monster towards everybody else. So a 360 review helps the leaders see how other people see the people that are reporting to them.
So I’ve seen people make major changes in their leadership style and their performance by just getting that feedback from everybody around them. You can always explain away one criticism by saying, “He doesn’t like me. He’s got it in for me.” So you’re learning nothing, because you can just dismiss that. But if when you get feedback from a variety of people and you hear something consistently from several people that you like and respect… You don’t know who they are, it’s anonymous, but it’s from your peers. You know what’s coming from your peers. You know what’s coming from your subordinates. That’s a real wake-up call. So that can really help people to learn and grow and advance.
But you’ve got to learn how to fire people too. And that’s always painful. If that ever becomes not painful, then you’ve kind of become an asshole, I think. You’ve got to check yourself in the mirror. I still, when I have to fire somebody, it’s not fun, but you’ve got to think about what’s the right decision for the organisation. You can’t let the whole team suffer because somebody is holding it back. You have to have the whole team flourish, and hopefully you can recycle somebody or put them somewhere else. Whole Foods is a big company. There’s a lot of different opportunities for people. In a smaller organisation that might not be possible. But I do think it’s important that you get good chemistry and you’re continually making the team better.
Nathan: Yeah. That 360 review is gold.
John: It really is. Have you done that before yourself?
Nathan: No, I haven’t.
John: You should do it, man. You’ll learn a lot about yourself and the people that are on your team will learn a lot about themselves too. It is gold.
Nathan: It made me think as well, kind of… We’re going to have to work towards wrapping up, but I’m really enjoying this conversation. But around getting people to self identify, the 360 review would really help with that, because if you’re just telling somebody, this is where you need to improve, this is where we need to focus on and areas of development, versus having to go down that hard conversation path. How do you get people to self identify? Or is that something that you focus on as a leader, when you’re trying to teach and lead?
John: Let’s make something really clear. The best teaching you’ll ever do is just how you show up every day. Whether you like it or not, if you’re the leader, everybody’s watching what you do, what you say. So you have to lead by example. You have to be the role model. And do never believe for a second that people are going to pay much attention to what you say, if you’re inconsistent with your actions with what you’re saying. They’re going to dismiss you. We pay attention to what people do a lot more than what people say.
But if we show up every day and if we’re a good role model and we have integrity, and we’re also kind and caring, people are going to pay a lot more attention to what we say, too. And they’re going to develop trust with us over time. So that’s the first thing, is if you want to be an effective leader, you have to be an effective person. Meaning you have to be a caring person with integrity, with a strong sense of purpose. Three things I talked about, first read chapters of our book.
After that, how do you help people learn and grow? You develop that trusting relationship with them so they’re not afraid of you. If people don’t trust you, they’re going to have their arms crossed. They’re going to be on their guard. You can’t get people to do very many things from fear. You can get compliance from fear, but if you really want people to get better, they can’t be afraid. You have to pull them along rather than push them through coercion or fear.
So I think the really good leader just helps people naturally to become… Just like a good parent does with their kids. I mean, you lead by example, you give them feedback when they need it, you take corrective actions. I don’t think you should treat your team as like their kids, because they’re adults. You’ve got to treat them with respect. But you’re also helping them all the time to develop. And I think it’s one of the most important tasks a leader has, because you’re no better than your team. And you have to help your team get better. If you’re going to be an effective leader, you’re going to be a good coach. I just think that comes with the territory.
Nathan: But in terms of coaching, it’s leading by example.
John: Well, that’s the most important thing. It’s not the only thing, but if you don’t get that one, the rest is not going to make that much difference.
Nathan: Yeah. True. Okay. Well look, John, we have to work towards wrapping up. Super mindful of your time. You’ve been very generous. Two last questions. One, any words of wisdom that you would like to kind of share with our audience of early stage startup founders, and then two, where’s the best place people can find out more about conscious leadership?
John: So the first question, well, I can answer the second question first. The book is available, it’s going to be released at least in the United States, it will be released on September 15th, and Amazon I’ll say that’s a good place to buy it from. If you go to Whole Foods’s market store, it’ll be sold there too. And obviously I think most major bookstores will have it. And then what was your first question again, Nathan?
Nathan: Just kind of just words of wisdom that you’d like to share during this time period for early stage startup founders and leaders during this time.
John: During this time or just in general? Are we talking COVID-19 time or just?
Nathan: Yeah, let’s talk about this because at any point in time as a leader, you’re going to face adversity in some shape or form, whether it’s COVID-19, whether you’re backed up against the wall. Yeah.
John: I think this situation is a great reminder of what many entrepreneurs have forgotten because so many venture capitalists are so focused on just growing the top line and you can always do another series B, series C, series D. You can raise more capital, and at higher valuations, it doesn’t matter. If you’re growing, you can get a higher valuation. At a time like this, it’s a great reminder. Cash flow matters. One of the things that I learned early on because I didn’t do tonnes of venture capital and financing. We got some VC money 10 years after we’d been in business, and we were profitable. We learned very early on if we wanted to grow, the best way to grow was to make money and then plough it back into the business.
So cash flow generation was really important, and I’ve seen that disappear. And the younger generation seems to be like, “What’s your cash burn rate?” And I was thinking at Whole Foods, what was my cash burn rate? It was nothing because we made money. I mean, that was the whole point of it to make money so we could open more stores with our cash flow. And I just think at a time where you can’t count on a series C or D or E because look at the kind of environment we’re in. It’s harder to raise money right now.
So my word of wisdom – don’t let the venture capitalist or the financiers convince you that producing cashflow is unimportant. The coronavirus, COVID-19, is teaching us and reminding us make money, reinvest that money in your business and grow it. And you’ll be less dependent on outside finance areas too and you won’t lose control of your business and you’ll have a bigger equity stake so if you ever do go public or sell the company, you’ll make more money in the end. So that’s my final word of wisdom on this one.
Nathan: Amazing. Well, look. Thank you so much for your time, John. You’ve been very generous and yeah. Really enjoyed this conversation.
John: Thanks, Nathan. I hope we meet in person sometime. You take care.
Nathan: You too. All right. Have a great day.
John: Thank you. Bye-bye.
Key Resources From Our Interview With John Mackey
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