Leader vs. CEO, with Whole Foods Co-Founder John Mackey

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

2:00John Mackey has some titles you will definitely recognize. Co-founder, longtime CEO, Whole Foods. But in the early days of his business, John Mackey was called something else, too, and it wasn't meant as a compliment. It was this, Wacky Mackey. Wacky Macky, that really, that nickname came from one of the co-founders, Mark Skiles, who had been a really close friend of mine. That is Wacky Macky himself, John Macky. I wanted to grow the business, and we had the first store was so successful, and Mark really didn't want to grow. He really just wanted to milk that one store. But that wasn't the reason that co-founder called him Wacky Macky.

2:39Wacky Macky was a reference to John Macky's lifestyle. To his doubters, Mackey seemed like an unserious leader for an increasingly serious business. He started the company when he was 24, having never attended a business class. He meditated, he took psychedelics, he had many spiritual pursuits. He looked like a long-haired hippie. And while Mackey liked who he was, the skeptics ate at him. He wondered if he could grow into the fully respected leader he wanted to be while also still being himself. This is something he, of course, prevailed at. He built and ran Whole Foods for 44 years until his retirement in 2022, and that rude co-founder left the business decades earlier.

3:22Mackey chronicles all of this and more in his new book. It's called The Whole Story. It's really great. It's just a great retelling of the origin of Whole Foods, but really, it's a chronicle of a leader trying to find himself. And that, I think, is so relatable to everybody, anybody who's in a leadership position. Here's me reading a little bit of the book back to John to really dig into that point. There's this moment in the book where you meet a guy named Chris Hitt, and you guys really connect, and you write in the book, it was a relief to meet someone who liked both Wacky Macky and CEO Macky and understood how they could be the same person.

4:07And when I read that, I started to think about the tension that new leaders often feel. How much of themselves are they bringing to this role? Who are they if they are both themselves, but also this new character that they need to be, this leader that they hadn't been before? And then once I was thinking about that, I just kept seeing that show up again and again in your book. There's another moment where you say, I'd grown into my role as CEO. You write, I was learning all of these lessons, even as I was trying to become more skilled at balancing the inevitable authority of my leadership position with my desire to collaborate and share.

4:48I see this tension that you were navigating and that now you are reflecting upon. And I think it would be really useful to hear from you, for other entrepreneurs who are feeling that, what that was like. and how you started to find who you were as a CEO and leader. Jason, this was one of the intentions in writing the book. I had many goals in writing the book. But one of the goals was that since I had started this company, I was really young. I was 24. My girlfriend Renee was 20. And I had no background in business. Certainly many other people over the years told me they thought I was crazy because I didn't behave.

5:32I didn't really know how CEOs were supposed to behave. And I never was trapped by that. I never, I always, I was always able to bring myself. I remember, I'll tell you a story. It's not in the book. Sure so. A woman was leaving Whole Foods Market and she was very persistent because we have an open door policy. She really wanted to tell me, I didn't know her. She really wanted to speak with me on her way out. and she was very persistent. So finally I granted her interview for her to come in and she came in to my office and she basically told me that, you know, that she just, you're not like a CEO supposed to be.

6:12And I said, how's a CEO supposed to be? And he says, well, you know, more serious, you know, more business-like. You dress, you know, a hippie. You don't dress like a business person. You're wearing shorts, you have long hair. You're not, you're just not a good CEO. And I said, the company is doing really well. So why do you say I'm not a good CEO? He says, we just don't act like a CEO. And I said, I don't know how a CEO is supposed to act. I just act like I am. I'm an authentic person. I'm not trying to be a CEO and not myself. And I'm sorry you couldn't reconcile that. But if you look at our results, they're really good.

6:50And she really had no answer for that. So she went on her way and I never saw her again. But I think that kind of sums up what you're trying to get at here. I've always been myself and I show up as who I am. And I never wanted to change, to conform to somebody else's belief of how a CEO should behave and act and be. This question of what a CEO is and should be and what a leader is and should be and how the two are the same but also very different is at the core of how John thinks about leadership. It's really interesting and it's something that we're going to dig into more in the conversation on this episode.

7:30So today, I'm talking with John Mackey, inspired by his new book, The Whole Story, about leadership and how to find who you are, not just as a leader, but as a person, and how those can both still be, in one way or another, the same thing. Coming up after the break. Entrepreneurs, we all love a problem solver. So did you know that Hertz Rental Car has a free membership program to help small and mid-sized businesses save whenever they hit the road? It's called Hertz Business Rewards. Sign up in minutes and save at least 20 % every time you rent a car. Work trips, client meetings, industry conferences.

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9:23WNBA's Kathy Engelbart, and Khan Academy's Saul Khan. From the team behind the award-winning Masters of Scale podcast comes Rapid Response. Search for Rapid Response wherever you get your podcasts to listen and subscribe. All right, we're back. I'm talking with John Mackey, co-founder and former CEO of Whole Foods, related to his book, The Whole Story. And let's just pick up where we left off. John was talking about how he never wanted to conform to someone else's belief of how a CEO should behave and act and be. You had to figure out how to be a CEO. I had to figure out how to be a good leader.

10:03Yeah, to be a good leader. Let me understand that distinction in your mind, because it sounds like you're thinking of a CEO as an archetype in some way that you didn't want to follow. But a leader is something that every organization needs, and you needed to figure out how to grow into that. And in that answer that you gave me, I heard these two things that maybe just came at different times, but I'd love for you to unpack them for me. Number one was the recognition, a really important one, that you had to grow into the leader that your company needed at any given time. The other was a real comfort in who you are as a person and therefore the kind of leader that you could be.

10:44One is a recognition of change, of necessary change. The other is a self-confidence that you don't need to change too much. Were those there for you at the same time? Or did you have to develop that confidence and also that awareness of what needed to change? Yeah, I definitely had to develop the confidence. That's the theme throughout the book. As time passed and I matured more and hopefully it was more successful, I got more confidence until I became extremely confident, very confident. And from being socially awkward and not confident at all, unsure of myself, not knowing really what I was doing.

11:21What builds that confidence? Excuse me? What builds that confidence? I think success builds that confidence. I think success builds that confidence and making mistakes and learning from them and then navigating situations the next time with wisdom and making good decisions. You're only allowed so many bad decisions before you either fail as a business or you're taken out because you just seem to be not competent enough. So I'm a good learner. I don't know how else to put it. I learn quickly. I will tell you something I left out of the book that I was just thinking about that I should have put in the book.

11:58So you're getting a scoop on this one. Love it. And that I ask myself a question all the time. And I think entrepreneurs should ask this question. If you're going to be a builder and not just a serial entrepreneur, I'd always distinguish between two kinds of entrepreneurs, those who start companies and then sell them and start another company versus those who want to build a company. I was clearly a builder. And I was always asking myself this question, what does the company most need me to do now? That's an important question for an entrepreneur. if you have a growing business, the things that I see happen to other entrepreneurs all the time is that you get good at something.

12:37There's something you're really good at and there's something you really like to do. So you keep doing it because you enjoy it and because you're good at it. And what I found is I had to let go of doing things that I was good at and I enjoyed doing because the company no longer needed me to do that. I'll give you an example. In the early days, the most important decisions we could ever make were really, besides hiring good people, was the locations. I actually headed up the real estate team for several years. I visit every potential site. I visited. I toured all the cities. I canvassed the neighborhoods because if we made mistakes there, the capital was going to be sunk.

13:17You're going to have this long operating lease. And I watched other natural food businesses make bad real estate decisions, And that really stopped their growth because they didn't, they couldn't raise money after that. And they didn't, and they were making less profits. So they had less retained earnings. So I paid a lot of attention to real estate and I was good at it and I liked it. But then, and it was something that eventually it was like, that's not what the company needs me to do now. That's not the most important thing it needs me to do now. And is it, it, and so I had to let it go and I had to have, no, I stayed.

13:52I still was part of the team that made the final real estate decisions, but I stopped traveling to the cities. I stopped canvassing the neighborhoods. I didn't spend the same amount of time on it because it wasn't the highest and best use of my time any longer. And that happened again and again where, and that, and I was always being forced into these new situations where it's what the company needed me to do. Like the company needed me to be more involved in PR is the face of the company. So I had to, I made a lot of mistakes in PR. I always like to make a joke that I failed media training like five or six times before the school.

14:29You're not the only one. And the school of hard knocks taught me painfully. I'm not going to say that again. That gets you into a lot of trouble. And so there've been many times over the years. And so if the CEO, if the entrepreneur will ask him or herself that question, what is the company most, not what I'll, what do I like to do? Not what am I really good at? But what is it that most needs me to do now? And that will change as time passes. Depends on, it'll be unique to each company in each situation. One of the reasons I was able to grow as a leader is because I kept asking that question and I had the courage to go into unfamiliar, uncomfortable situations that I might not be very competent at and learn how to be good at that particular thing.

15:14That question forces you to let the company lead you. And it forces you to be rigorous about how you, even if you are the leader, even if you are the CEO and co-founder of a company, how you are in service of the company. In my other books, like Conscious Capitalism, Conscious Leadership, we talk a lot about the servant leader. So from the very beginning of the company, I saw myself in service to the purpose of the business. And then later as I got the language for stakeholders, I was in service to the stakeholders and in service to Whole Foods flourishing. And what did it need me? What did it need for me to help it to flourish?

15:57So I served that. And I just think that's a very useful way to think as a leader, as a CEO, most CEOs, I mean, and I'm making a distinction by the way, between CEO and leader. All CEOs are not leaders. I want to talk about that because you've made that yet. And all leaders are obviously not CEOs. Yeah. Can you explain that distinction before you keep going? Well, a CEO is a position of authority. It's a role. You're the person in charge of the company if you're a CEO, chief executive officer, but you may not be a good leader. You may have just played a good game and you got promoted and you became the CEO, but you were a bad choice because you're really not a leader.

16:40And leaders are those who ultimately other people want to follow. A good leader is somebody that inspires people because it has integrity and that people trust. And we trust people that have integrity. We trust people we know that are in service to the business that aren't in it just for themselves, that aren't in it just to make as much money as possible. One of the things that happens frequently in large corporations is you have people that are playing that game to get up to higher positions in the authority structure with the ultimate goal to become the CEO of either that company or some other company because they want to be the CEO.

17:16They want to be in charge. They want to make the most money possible for themselves. And the problem is most CEOs, they don't get there until they're in their 50s normally, or even their 60s. So their stint as a CEO of a large public company may not be that long. It may be seven years, five to 10 years, someplace in that range. And oftentimes their goal is they're not thinking long-term. They're not thinking about how do I serve the company best. They're thinking about how do I get that stock price up so I got a big chunk of stock options or RSUs when I got promoted here. How do I get that stock price up so I can make a lot of money?

17:56And that's not how a leader would behave, you might say, but that is how a CEO might behave. So that's another distinction. So that's, now I understand that anecdote that you had shared a little earlier better because what you were saying to that woman who had said you're not like a CEO is you didn't care about the qualities of a CEO, but you did care about the qualities of a leader. And you were always interrogating what it took to be a good leader. and you didn't really care about what it looked like from the outside. She had certain expectations, but it wasn't my job to live up to her expectations.

18:38My job was to serve the company and help it to flourish and be successful. And if she had judgments about, that was her problem. It wasn't my problem. Let's talk about this point that you made about how you had the courage to go into different parts of the job, to evolve into different areas of the business, to push yourself as a leader into places that you didn't totally know that maybe you weren't comfortable with. I'm curious if you had some guides for yourself or some way to navigate those moments. Because as the business grew, So I would imagine you felt an increasing pressure to be the right leader for that moment.

19:28And there's a frustration, John, that happens as people grow. In some way, it's easy to evolve at the earliest stages when you say, I don't know anything. I'm not supposed to know anything. I'm going to learn. I'm new at this. But at some point, you're a more seasoned leader, a more seasoned entrepreneur. and you're still being asked to step into areas where you have less competence and to start in some ways from scratch. That's hard. That almost gets harder as you get older and more experienced. Was there something that you told yourself? Was there something that you understood about yourself?

20:06Was there some process by which you entered these new arenas that helped you maintain that focus, as we said a moment ago, that you are in service of the company and that you just needed to do this. You mean, how was I able to do that? Yeah. How were you able to? You talked about the you talked about having the confidence to go into these areas that you didn't necessarily know. That's not always just built. That's learned. That's a thing that you learn. And it's not just about being successful about it one time and then another. It's about having some kind of mental structure that you built for yourself to say, this is how I learn.

20:44This is how I'm going to tackle these subjects. How do you do that? There's a few points that come out here. The first one is that, of course, as I point out in my book, that the first 16 years of Safer Way and Whole Foods existence, I had a mentor, my father, who was a very good, excellent businessman. And I really didn't make major decisions that I didn't clear with him. And I always say that saved me from wrecking the company when I was trying, I was, you use a car metaphor, I was trying to learn how to drive this car. But I always had my dad to take over the wheel, so to speak, when I was getting near a cliff.

21:21So I didn't drive it off the cliff. But then 16 years out of 44 is relatively a short period of time. It's only about a third of it. And after that, after I fired him from the board, I've always been very, also very team oriented. And I had a great executive team and I try to give them a lot of credit in the book. People like Walter Robb and Glenda Flanagan and A.C. Gallo and others. I trust the wisdom of that intimate team. We would argue about things. We'd debate things and we'd make better decisions as a group. because all the issues would get talked about. I wouldn't make arbitrary decisions.

22:03I didn't have so much self-confidence that I thought I was smarter than the whole team. I didn't think I was smarter than the whole team. Quite the opposite. I thought there was a collective intelligence of which I was part of that collective intelligence had a unique perspective, but together we would make really good decisions. And so I learned from my team and I was dependent on my team. And I could count on one hand the number of decisions over all those years that I just went against the team and said, you know what, we're going to do it this way. I'm sorry. You have not persuaded me. I really feel like it's important to do this.

22:40And I'd say on half of those decisions, I was proven wrong. There were a few that I was smarter than the team. But most of the time, and I didn't do this very often, but I remember some of the times when I went against the team. and the team was proven right. That's humbling. It is humbling. And it also makes you grateful to your team for the collective wisdom. And you have to have a team that has a high degree of trust because people need to be able to speak their own mind and opinion without fear that somehow or another it's going to harm them personally in some way or people think they might be hurt, they keep their mouth shut.

23:20So I think that enabled me to have courage because I wasn't doing it alone. I wasn't just this lonely, heroic entrepreneur CEO who had to, I think the media oftentimes portrays people like Steve Jobs and Elon Musk and Jeff Bezos and some of these heroic CEOs as supermen or superwomen. And I promise you, if you read those biographies of those guys, what Steve and Jeff and Elon, one of the things they all have in common is that they're able in their own unique ways to build great teams, inspire people, even though oftentimes they'd be hard on them, inspire people to excel and get the very best out of them for the good of the collective whole.

24:07And that's just not talked about enough. There's the collective intelligence of the team, no matter how brilliant somebody like Elon Musk or Jeff Bezos or Steve Jobs or anybody else is Bill Gates is that they're backed by a brilliant team. And that team is, they're making a lot of these decisions collectively. I just don't think that's well understood because, and I think it's probably the media's fault because it's hard to give a face to a whole team. And it's a lot easier to take the heroic individual and puff him or her up into sort of a super, a Superman or superwoman role. And it's, I just don't think it's that accurate most of the time.

24:46Yeah, you said this, I'll talk about often enough. So maybe we just spend our last few minutes together talking about it. I'm curious what you found builds the kind of relationships you said a little bit there, trust, people knowing that they're not going to get harmed for having an opposing viewpoint. But you clearly built a great team. You built a team of people that you trusted who were supportive of each other and were the most important things that you or the team did to create that environment? It's a word I use a lot in my book. It's definitely one of the themes of the book. It's love, Jason.

25:24People on my team knew I cared about them, knew I loved them, and then shared purpose. We were trying to get to the same goals together. We had similar visions about how we wanted the world to be, how we wanted our stores to be. And they knew I cared about them and they knew I'd listen to them. And they knew that sometimes I'd back down and they were right. And I didn't care who got the credit. You build that team and that collaboration through purpose and love. Those are the two most important things. And not having a massive ego, it takes all the air out of the room. So nobody else ever gets any credit.

26:02I'll ask you one final thing building off of that. I think that what you just gave is a wonderful answer. It's also an answer you don't hear much about in business. I don't hear the word love a lot in business, which isn't to say that people who I talk to are cold-hearted. I think it's just that they don't think of the word love as associated with business. It's a squishy word, but it's also a very personal word. And sometimes business is business. And people will sometimes say you got to leave emotions outside. You have to make sure that the things that a company needs trump maybe personal feelings.