Word: mackey
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Their lives, though, continued along parallel paths. Both men dropped out after long undergraduate careers ("I crammed a four-year program into about eight years," Tindell jokes). Then, in 1978, both started businesses: Mackey, with his then girlfriend, opened a health-food store in Austin; Tindell, with a guy he had worked with at Montgomery Ward, opened a store in Dallas that sold containers...
From these beginnings have emerged two great retailing successes: Mackey's Whole Foods Market is the leading natural-foods supermarket chain; Tindell's Container Store has the storage-and-organization category it invented pretty much to itself. And lately, ceos Mackey and Tindell have reconnected--partly to bask in the shared joys of being rich former slackers ("You have a Frisbee golf course on your ranch too?!?") but mainly to discuss the approach they say has enabled their success. I got to sit in on such a chat at Whole Foods' headquarters in Austin. (A transcript is at time.com/mackeytindell....
...Simultaneously we hit upon the philosophy that I think will be the dominant philosophy in business in the 21st century," Mackey says. "It's this principle that the purpose of business is not primarily to maximize shareholder value...
...Mackey and Tindell both started out striving mainly to satisfy customers. What other choice is there for a new business? As their companies grew, the emphasis shifted to employees. Whole Foods and the Container Store pay better than most retailers, offer good benefits and entrust workers at all levels with sensitive financial data. The idea is that happy, empowered employees beget happy customers. Happy suppliers help too. All this stakeholder joy eventually redounds to the benefit of shareholders--but the magic fades if shareholders become the focus. "There's a harmonic effort that takes place, like a chorus...
This view of business as harmony doesn't entirely square with the ferocious competitiveness displayed at times by Mackey, who made headlines last year for posting pseudonymous Internet messages disparaging another supermarket chain. When I bring this up, Mackey tells me he thinks competitors are stakeholders too. "I want to beat them," he says. "But I also have a philosophical view that if we didn't have competitors, we wouldn't be as good a company...