I feel a little weird about saying this, but I think in the end Whole Foods’ cultural transparency will lose out to Amazon’s cultural xenophobia. It has bothered me since the news about the buy out first broke that in a deal like this, the conscious capitalism of Whole Foods might be devoured by the “not-invented-here” culture of the Amazon business model.
No matter what anyone at Amazon says, it is unlikely that they will stay around in the long run. Just my opinion, but you can kiss fair trade, humane treatment of animal certification, and even the integrity of organics and the non-GMO project goodbye. Yep! I predict that eventually another entity will buy Whole Foods out of Amazon at less than 50% of what they paid, or about $6 billion. But that might be a good thing because at that point, when business xenophobia has taken half of the value of Whole Foods away, it might return to us as the transparent, giving, conscious Whole Foods that we know and love.
Corporate Culture: implied, not expressly defined, and developing organically over time from the cumulative traits of the people a company hires.
Xenophobia, which Wikipedia defines as the fear and distrust of that which is perceived to be foreign or strange, probably seems a unique term to use when referring to a business culture. But when one company acquires another, there seems to be this cultural backlash that exterminates programs developed in the acquired company. What is that if not a form of xenophobia?
In business, the basic fear system that creates a culture of business xenophobia is necessary for the survival of the company. From a business standpoint, it is necessary to excise the outdated, unfamiliar and strange to allow growth and change to occur. So what I am saying here is that business xenophobia may be the end to all of the Whole Foods programs we love, yes, but the notion of “Whole Paycheck” will be gone as well, and that’s a good thing.
I think each and every one of us has to realize that without business xenophobia we probably wouldn’t ever change the way we do things. We would not innovate, and it would be almost impossible to disrupt any traditional business model. So in many ways, business xenophobia is a very good thing, and we should embrace it.
Whole Foods was built on total cultural transparency, from its personnel to its farmer producers and growing methods. Amazon, in contrast, might be the most secretive big company ever–– even more so than Apple. Where Whole Foods has been doing good for mankind, supporting causes that need support and treating their people in a way that exhibits a higher mission, Amazon rarely shows up at conferences, never talks about any tactical or strategic issues, and is, in fact, mum on what it is going to do with Whole Foods. Hummm, a transparent company is being gobbled up by a secretive monster that controls 43% of online retail sales in the U.S., and Amazon’s North American sales increased 25.2% last year alone. Other online retailers, like Wal-Mart, whose growth was estimated at 3.3%, are understandably struggling to keep up.
An Internet Retailer survey of 500 US consumers last December found that 52% go directly to Amazon when they shop online.
Other seemingly culturally transparent issues can fall victim to business xenophobia as well. Take salary ratios, for instance, that are designed to define parameters such as the max a CEO may be paid. Jeff Bezos’ salary is $81,840, but according to the 2016 annual report, he holds 82.9 million shares of Amazon, close to 17.6% of the total outstanding shares, and his net worth is estimated at just shy of $90 billion. By contrast, Whole Foods co-CEO John Mackey decided more than six years ago to cut his yearly salary to $1 and opt out of any future stock options and bonuses. Including previously held stock and company perks, his yearly compensation is about $69,000. His estimated net worth is around $92 million, including $8 million he reported earned from the Amazon buy out.
This whole business xenophobia vs cultural transparency thing started me thinking about myself, my own reactions. I am often thrown into strange new company cultures. I meet new and different people all the time and I do feel sometimes I have a certain component of business xenophobia. Most of the time, it is a knee jerk reaction and not really a thoughtful response, but I believe that all of us have some component of xenophobia, especially in a new business venture. It’s just a matter of how we express it.
Now to be fair, while the cultural transparency of Whole Foods is one side of the coin, they have struggled with a terrible image problem––the perception that their prices are too high. If the xenophobia of Amazon could eliminate the stigma of high prices but maintain the virtues, values and programs of the Whole Foods we love, then the negative would suddenly become a positive, and the sales of Amazon would top the 16% compounded growth estimates and they would own the natural and organic fresh and packaged food business. It could happen…
Anyway, so glad to be able to address a paradoxical survival behavior like business xenophobia and introduce it as a concept for you to contrast with the idea of cultural transparency. I hope you will embrace it and use it to as a way to grow.
Do a deep analysis of your business and ask yourself, do you create cultural transparency or are you business xenophobic? Is this a positive or a negative? If the answer is negative, why? Could this be a growth opportunity or is it a matter of business survival?
As the digital experience and legacy brick and mortar businesses work to find an equilibrium, I am so glad I have a front row seat to watch all of this unbelievably exciting xenophobic disruption. It will be so much fun to watch the Amazon and Whole Foods cultures clash, and see how each reacts and changes.