On Wednesday 22 January, Walter Robb, co-CEO of Whole Foods
Market, explained how the company focused on community stakeholders
from Detroit in order to open a successful store in the city's
Midtown section - despite naysayers and skeptics who thought it
would never be profitable.
appearance kicked off the 2014 session of the University of
Virginia Darden School of Business
Leadership Speaker Series addressing the theme: Leaders
Who Inspire Innovation, Collaboration and Growth.
Garrett Wilson, president of Darden's
Net Impact Club, which co-sponsored the talk, introduced Robb.
R. Edward Freeman moderated a discussion with Robb
following his presentation on how Whole Foods Market lifted a once
ailing Midwest community.
The key to their success, according to
Robb, was sticking to Whole Foods' core value - using business
"to put something good into the world" and not to focus on profits
alone. Their first step was to reach out to the people of Detroit,
listen to them and learn from them.
"We had to start all over again," said Robb. "Many had a bad
taste in their mouths from everything that's happened in Detroit
over the last 10 to 15 years. Companies had come in, extracted,
burned them and had not kept their promises. I realized that it was
all about - like with any relationship - trust."
The company emerged from the listening sessions with agreements
to hire 70 percent of the store's employees from within the
community and use local contractors to build the new store, which
opened this past summer.
"This was a 3 1/2 year journey," said Robb. "This journey of
rediscovering the community stakeholder led to this result of
feeling the full power of humanity. This store represents a
collaboration between a community and a company," added Robb, who
believes that great things are now happening for Detroit.
Participants from the listening sessions held by Whole Foods
evolved into a group called Equitable Detroit, which now helps
other businesses integrate into the city.
Proving the Skeptics Wrong
The decision to open a new store in Detroit was met with
skepticism. The Wall Street
Journal asked if the venture was "A business plan gone
off the rails?"
In reality, the new store is earning two times more than what
When Whole Foods performs, Robb said, it tends to silence the
In addition, Robb explained during the Q&A session that
while Whole Foods did have to lower its pricing structure and look
to conventional produce instead of all organic produce for its
Detroit store, it did not sacrifice its high-quality standards.
"We're never going to compromise on quality," said Robb. "The
whole point is we're not going to Whole Foods to do 'half foods.'
The community made it very clear: 'We want who you are.' We aren't
going to dumb ourselves down. That would be an insult to the
community," Robb added.
A Transferable Business Model
During the moderated discussion with Freeman, Robb addressed the
Whole Foods business model and how it can be applied to other
He told Freeman, "It has to start with a company's core
He explained that many companies are talking about versions of
Whole Foods' business model - conscious capitalism - and that the
principles are transferable. They include a strong company purpose
and set of core values. For Whole Foods, this means:
- Team Member Happiness
- Partnerships With Suppliers
- Community And Environmental
- Motivated Investors
- Satisfied And Delighted
Additional principles of conscious capitalism include:
- Stakeholder Integration
- Conscious Leadership
- Conscious Culture And
"In its finest form it's a cathedral for the human spirit," said
Robb about business. "It's a place where human beings can express
themselves, can create and use their intelligence."
Robb also credited Freeman with the emergence of the company's
business model, which directly attributed to stakeholder
theory, a business management and ethics theory that puts forth
methods to help companies equitably address the needs of all of
their stakeholders - not just shareholders.
"We have to thank you for stakeholder theory, because we learned
it at your knee," said Robb. "We decided to take it out for a
According to Robb, Whole Foods' team members were "incredibly
proud" of the store's actions to open the new Detroit location, and
they developed an even deeper relationship with the company.
Rob further described Whole Foods as a $13 billion company that
pushes boundaries, and in some cases, may be ahead of its time.
"There is oftentimes an ideology that big companies have to be
bad. I would challenge that," said Robb in response to an audience
question about Whole Foods' magnitude and intent. "It's not that
big companies or small companies are bad, it's what you do that
matters." He added, "Being big gives us the opportunity to do
things we could have never done before."
Institute for Business in Society also supported this
The well-attended talk proved energizing for an MBA student body
with a growing interest in mission-driven careers that create value
and produce profits.
About the Darden School of Business
The University of Virginia Darden School of Business is one of
the world's leading business schools, offering MBA, Ph.D. and
Executive Education programs. The unique Darden experience combines
the case study method, top-ranked faculty whose research advances
global managerial practice and business education, and a tight-knit
learning environment to develop responsible and complete leaders
who are ready to make an impact.
About the Institute for Business in Society
The Darden Institute for Business in Society (IBiS) aims to be a
leading, global catalyst and convener of thought, information and
action at the interface of business and society; and to promote the
development of leaders to positively impact society; and to promote
the development of leaders to positively impact society through
their roles in business.
For questions or information, contact Abena Foreman-Trice or a member of the Communication team.
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