Oh, make that two ways. According to The Associated Press (AP), John Mackey, CEO of Whole Foods Market Inc. (Whole Foods), found that posting under the anonymous name “rahodeb” was a pretty good way to satisfy the needs of stakeholders as well.
According to the story, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share. But unfortunately, this comes after “rahodeb” posted the stock was overpriced; predicted the company would fall into bankruptcy; claimed it would be sold after its stock fell below $5 per share; declared Wild Oats' management "clearly doesn't know what it is doing;" and that the company "has no value and no future."
Obviously, “rahodeb” must have miswrote because Wild Oats does have value: $18.50 a share, which is sharply steeper the $5 per share that “rahodeb,” er, Mackey, um, "rahodeb" had hoped for as the masked Wild Oats stock vandal.
In fact, Wild Oats is so valued by Mackey, he has taken to misappropriating his company's public relations and social media communication to flame the Federal Trade Commission (FTC). Apparently, he is not happy they made his anonymous comments public in an attempt to block the merger nor does he accept that the FTC is trying to prevent the elimination of another competitor.
"As previously announced, we set an intention as a company to be as transparent as possible throughout this legal process, and this blog entry is my first detailed effort at transparency," said Mackey in a news release that neglects to reveal how posting anonymous comments on Internet financial forums for seven years might be transparent.
“I provide explanations of how I think the FTC, to date, has neglected to do its homework appropriately, especially given the statements made regarding prices, quality, and service levels in its complaint. I also provide a glimpse into the bullying tactics used against Whole Foods Market by this taxpayer-funded agency,” Mackey continues on his blog. “As stated in our initial press release about Whole Foods Market's challenge to the FTC's complaint, we set an intention as a company to be as transparent as possible throughout this process. This is my first detailed effort at transparency.”
Hmmm ... I suspect if there is any "whole truth" that could potentially win a fruit basket then “this is my first effort at transparency” must be it. Unfortunately, had Mackey done his homework, the best time to be transparent is before one damages personal credibility. So, what this all means is the happiness factor of Whole Foods (where I shop sometimes) is about to be spoiled.
How do I know? Well, some of the writing is already on the blog. Mackey, just days before this seven-year ethical breach came to light, published the graphic above for one of his more colorful, but long-winded posts, Conscious Capitalism: Creating a New Paradigm for Business. He says the image represents “a common view of the good, altruistic non-profit organizations versus the evil, selfish, greedy corporations.”
Overall, I don’t subscribe that the notion that this is really the "common view." It seems more likely to me that each company is charged with its own reputation management. And, with this responsibility, each is free to nurture positive public opinion in any it feels fit, starting with the behavior of its CEO.
But then again, if the "common view" is that corporations are “evil, selfish, and greedy,” it seems to me that any CEO who would attempt to drive down the stock prices of a competitor, under the veil of anonymity, certainly isn't helping this perception go away.
In sum, Mackey wants us to accept that there are truths, half-truths, and now “whole truths.” And while that might sound all fun and amusing (enough to start a living case study), the SEC isn’t laughing.
10 comments:
Excellent post, representing your company as a bastion of transparency and then getting caught in the act of bashing the competition anonymously is pretty low. What does this do for employee morale and the trust with the customer, not much I think.
As usual, Rich, an excellent post.
This one's pretty bad. In my mind, he should simply resign. There's no coming back from this crises, as he's basically been caught red-handed cheating.
An apology may work and he may keep his job, but from here on out while Mackey runs Whole Foods, they will be regarded as little shady. Just like Martha Stewart. The only way to recover is a prompt resignation forced by the board. Further, Mackey should be brought up on charges for by the SEC and treated as a criminal. The best amends he can make is community service.
Thanks John and Ami,
It is an interesting case to be sure, and I hope to find some relevant information that goes beyond the obvious in the days ahead. I too find it ironic that those with their hands caught in the cookie jar are the first to talk transparency.
Geoff,
I'm not sure. Whether Mackey resigns or not will not halt the FTC lawsuit nor the SEC investigation. Thus, doing so now, will not likely help either. (Though he might consider resignation based on the outcome of either ruling).
Mackey is also under the impression that he has curried enough support to split public opinion, and there is evidence that effect. While this doesn't sit well with some, including me, there is no mistaking that unlike Martha Stewart, he has one of those odd personal brands where people are already attempting to justify his actions.
As an eccentric, he has a greater chance of recovery than the perfectionist. So while I don’t condone his actions nor do I think any positive outcome would be just, the possibly exists that he could survive depending on what he does in the days ahead. Of course, there is considerable risk in that his continuance, despite his transgressions and depending on how he moves forward, could damage Whole Foods Market, Inc. in the long term.
To be certain, the old sacrifice rule in playbook you’re citing is relevant, but doesn’t go deep enough not is flexible enough. But then again, I don’t think JetBlue has recovered nearly as much as some of my communication peers seem to think, nor do I think their use of social media as a crisis communication strategy was wound, nor do I think that the dismissal of David Neeleman was all that bright on their part.
Maybe this could be our first debate after launching the myRagan group despite the fact that I would not defend Mackey, but rather remain objective in that resignation is not necessarily the only option (though it is certainly the most ethical one) given he hasn't even conceded what he did was wrong.
All my best,
Rich
Very well put. Mackey's behavior was certainly terribly unethical; the FTC and others will decide if it was criminal. But you have to be amazed at the brazen ego this guy must have to trumpet his "transparency" days before it is revealed that for seven ears he cowered behind an alias while talking up his compnay's stock and traching a competitor's stock, that would soon become his target in a hostile takeover. Actually, the media and much of the blogosphere is letting him off remarkably easy. For more, see:
http://jon8332.typepad.com/force_for_good/2007/07/whole-foods-ceo.html
Hey Car,
Your post lends very well to the discussion. While I am not amazed by his brazen ego, I am fascinated by it in that I believe it is the reason we see some split among public opinion and even media opinion. While I don't recommend or condone it, he seems very adept at joining those who are near exempt from criticism because they choose to play by different rules, which is continually reinforced by the public as a privilege of self-defined rank.
Frankly, I don't see how anyone can mistake what he did as anything but possible insider trading, though that is best determined by the SEC. By Monday, I'm hoping to have more collected to make new observations, as this type of behavior, I hope, will be discouraged by business leaders rather than embraced simply because it is easier.
Let's hope the new fad for some is not faux transparency (though sometimes I think that is the direction in which we are trending).
All my best,
Rich
From Scatterbox:
Despite the PR and social media pundits, there’s not much to learn from the Whole Foods fiasco.
Great post Steven. I'll include some comment on it today because, mostly, I agree with you.
It's also why my focus isn't so much on what has happened, but how things are handled going forward because I think beyond the concept that smart people sometimes do stupid things simplification, there is what Mackey might do, Whole Foods Market might do, etc. I won't toss out any giveaways, but Mackey, as ridiculous as it seems, is still in recoverable position, even if they give up or are forced to give up Wild Oats.
So while it might be easy to say adios, the tactic does not always work as well as some people might think, not there is any defendable position on what was done. In that way, oversimplifying seems precisely like how it is defined.
All my best,
Rich
We're reminded of another colorful, big-ego public company CEO--and serial poster on stock message boards (including Yahoo! Finance) in the late '90s--with whom I, and many, many others, had spirited debates.
The contrast is striking. This CEO neither promoted nor bashed stocks. His mantra was lampooning "old media," talking up the future of the 'Net, promoting his vision of social and economic justice, and insisting that his company would make a difference. He was never without opinion and always wore a smile. A gracious, engaging guy--and everyone's fraternity brother.
His handle was, well, his real name: Mark Cuban, an authentic, self-made legend. Not long thereafter, he and cohort Todd Wagner sold their brash start-up, Broadcast.com, to Yahoo! The price? $5.8B.
If we asked Mark to comment on the Mackey affair, he'd probably frown and quote PR blogger Steven Silvers:
"If you don’t understand why you should not do these things, resign now. You have serious issues."
"And you’re not fit to be your company’s leader."
A CEO's job is not about living a double life. It's about leadership. In Mackey's case, sadly, a screw is missing.
Nice work on this story, Rich.
--BAM
I appreciate it BAM.
You raise an interesting point in terms of leadership requiring authenticity, which Mackey does not seem to have presented well. Something I'll certainly keep in mind as the case study moves forward.
Without question, Whole Foods has taken an interesting position in being aggressive in its pursuit of Wild Oats in the face of an SEC investigation and internal investigation, which requires, roughly in their words, self censorship.
Best,
Rich
Post a Comment