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Whacked-Out About Whole Foods’ CEO Mackey

Just reading the headlines online this week about Whole Foods CEO John Mackey, you’d think he had been caught committing a felony, perhaps something particularly debauched. • The Motley Fool: “Rotten Behavior At Whole Foods” • Fortune: “Is Mackey Too Wacky to be CEO?”

Just reading the headlines online this week about Whole Foods CEO John Mackey, you’d think he had been caught committing a felony, perhaps something particularly debauched.

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• The Motley Fool: “Rotten Behavior At Whole Foods”

• Fortune: “Is Mackey Too Wacky to be CEO?”

• Seeking Alpha: “Whole Foods CEO Mackey is Out of His Organic Mind”

As first reported in the Wall Street Journal, and as now reported everywhere, the curmudgeonly Mackey has been posting messages for most of a decade on Yahoo! financial message boards about his own company, and smaller rival Wild Oats, using the pseudonym Rahodeb (his wife Deborah’s name spelled backwards, with the h and r at the end swapped).

Mackey was obsessively prolific: According to 24/7WallStreet, he posted 1,394 messages over seven years — four per week.

But the reaction to the revelation seems wildly out of proportion to the sin. Al Lewis, a financial columnist for the Denver Post, opens his denunciation of Mackey with this line: “Sounds like it’s time to bag the organic fruitcake running Whole Foods.” Clever. But resign? Mackey should resign? Actually Lewis has a better idea: Take on a different title at Whole Foods: “Whole Fool.”

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And no less a figure than Jeff Sonnenfeld, former dean of the Yale School of Management, told Fortune: “”It is time to boot this guy out, but I doubt the board will.”

I’ve written two stories about Whole Foods and Mackey, one from back when the company was young and tiny and revolutionary, and again three years ago, in July 2004, when I wrote that Mackey was “a man who has done more to improve the quality, sustainability, healthfulness, and purity of the food Americans eat . . . than anyone else in the past 25 years.”

Maybe it’s because I’ve spent hours talking to Mackey, and talking to people about Mackey, but the idea that Mackey should be demoted or fired, or should quit, because of anonymous internet postings seems absurd.

In my experience, Mackey is intimidatingly smart and naturally argumentative. He is both competitive and surprisingly defensive. He likes verbal and intellectual jousting the way some folks like a vigorous, elbows-flying game of basketball after work.

The combination of traits means that it’s easy to see why Mackey would find the message board universe appealing — it is the financial-argument version of a pickup basketball game. And Mackey has the kind of searching, perfectionist personality that would incline him to track down everything written online about Whole Foods, and be unable to let the least disparagement go unanswered.

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What Mackey did was silly and juvenile — there is apparently no one immune to the time-wasting blandishments of the internet. It was also risky and foolish. As CEO of a publicly traded company, Mackey has a primary duty to protect the financial interests of Whole Foods’ shareholders — and conducting undercover jousts on message boards is totally at odds with that responsibility.

The whole thing is a risk/reward problem, more really than an ethics problem. Mackey says he posted because it was “fun.” But whatever fun or insight he got from working the Yahoo message boards, the risk of damage — to the value of Whole Foods, to his own credibility, to his ability to continue to lead Whole Foods — those risks far outweighed the fun.

Not every stupid decision is an unethical one. And in terms of foolish moves CEOs make (how about GM laying off 45,000 employees in a single day last year after years of poor decision-making?), unless something dramatic comes to light, this one’s nothing more than dumb.

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