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Hubris and Hiding Poke a Hole in Whole Foods

Hubris and Hiding Poke a Hole in Whole Foods

by Frank Roche on July 17, 2007

in Business, Communication, Companies

I’ve hesitated to write about this for a few days.

Regular readers of KnowHR Blog will know that I’ve written glowing articles about Whole Foods and their CEO, John Mackey. I thought their HR practices and executive pay decisions were among the best in the U.S. I still think so. But, oh how the mighty have fallen.

John Mackey, the CEO who talked so much about transparency and honesty and integrity, posted 1,300 entries on financial message boards using a pseudonym. Ben McConnell of Church of the Customer Blog summarizes the “whole” mess in one pithy paragraph:

That’s why Whole Foods founder and CEO John Mackey, in my book, was knocked off the rebel ladder today when the WSJ revealed that he’d spent eight years hiding behind an online facade astroturfing his company. Posing as just an everyday investor on the Yahoo Finance message board for Whole Foods, he cheered his company’s financial results. He demonized the competition. Using his alias, he even astroturfed himself, defending criticism of his haircut.

It gets worse. Mackey doesn’t think he’s done anything wrong. His response to the criticism that the CEO of a major company was posting unwaveringly bullish comments anonymously in financial bulletin boards reminds me of that scene at the end of A Few Good Men, when the Marine, after being dishonorably discharged, shouts, “We didn’t do anything wrong! Hal, what did we do wrong?! We didn’t do anything wrong!” That movie scene made me uncomfortable; Mackey’s “defense” of his actions makes me even squirmier, especially his “I didn’t do it, my hand did it” defense:

  1. I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms.
  2. I never intended any of those postings to be identified with me.

What’s Wrong with this Picture?
There are a few HR lessons to be learned here. Sure, Whole Foods HR wasn’t involved in John Mackey’s decision to become “Rahodeb” and post on financial bulletin boards. But now they have an ethical quandary to get out of. How do you tell your employees to think and act ethically when your CEO didn’t use the good sense that God gave a Kindergartener? I mean, I thought passing anonymous notes went out in grade school. Here are some things that HR should learn from this fiasco:

  1. They always find out. Remember when you were a kid and it was so amazing that your parents just *knew* what you were up to? Well, in this internet age, they have ways of finding out. And when they find out, everyone knows. It’s like getting yelled at by your mom with all the windows open in the house and your friends standing outside. Only, in 2007, it’s like there are millions of friends standing outside. And they all can hear every word.
  2. Transparency is the new secrecy. Keeping secrets is part of doing business, right? I mean, that’s how the Man in the Gray Flannel Suit would have done it. Well, it’s now the era of the dude in the black t-shirt. And he knows the real deal. Complete and utter transparency is essential these days, whether as a CEO or in HR communications. Tell them what you know, what you don’t know, and when you’ll know more. Transparency is more than honesty, it’s honesty and ethics all mixed together with a little vulnerability. It’s knowing that adults can see through things whether you want them to or not.
  3. If you make a mistake, own up to it. Gosh, this is starting to sound like All I Ever Needed to Know I Learned in Kindergarten. Maybe it’s just that. Mackey’s defensiveness about his actions don’t come off as owning up, they come off as “I got caught but they don’t like me.” C’mon, that doesn’t work when you’re a kid, why would it work now? Note to the Communication and PR folks: When you get called on to write a crisis speech for your CEO, write honestly and authentically. Don’t “spin.” Don’t think people need to hear it “a certain way.” If you make a mistake, say so. It’s what adults do.

Yeah, I’m a little peeved about this whole thing with Whole Foods. It’s harder when the good ones fall. I still think the company is good and their practices are outstanding. I think their thousands of employees are truly excellent people who want to do good. I just wish that they didn’t have to go home and explain to their families and friends why their CEO made 1,300 bad decisions to write anonymously on financial bulletin boards. That’s wrong, and it’s the complete HR lesson for today: Don’t ever do things in HR that would make your employees have to explain away a story or be put on the spot. Doing the right thing is always the right thing to do.

If You Just Can’t Get Enough of the Anonymous CEO Story
You can read a lot more about this story in USA TODAY’s analysis of what John Mackey wrote as “Rahodeb.” John Moore’s “Mackey’s Kinky Business Behavior” is a great summary of the elements. MSNBC’s “Whole Foods CEO’s Anonymous Life” is another good summary.

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