One of my readers alerted me to this article in the April 1996 issue of Fast Company about the open culture of Whole Foods, a company that was approaching $1 billion in annual sales back then. The author called their approach “the future of democratic capitalism.”
Today the company’s market cap is $9 billion and sales will exceed $5 billion this year. This company is doing a lot of things right. Its non-heirarchical open culture is fascinating. Here’s a quote from the 1996 article:
The Whole Foods culture is premised on decentralized teamwork. “The team,” not the hierarchy, is the defining unit of activity. Each of the 43 stores is an autonomous profit center composed of an average of 10 self-managed teams — produce, grocery, prepared foods, and so on — with designated leaders and clear performance targets. The team leaders in each store are a team; store leaders in each region are a team; the company’s six regional presidents are a team.
Whole Foods supports teamwork with a wide-open financial system. It collects and distributes information to an extent that would be unimaginable almost anywhere else. Sensitive figures on store sales, team sales, profit margins, even salaries, are available to every person in every location. In fact, the company shares so much information so widely that the SEC has designated all 6,500 employees “insiders” for stock-trading purposes.
Whole Foods now has more than 39,000 employees. For nine consecutive years it has been listed as one of the Top 100 companies to work for by Fortune magazine.
Does anyone know of any other companies that act like this? Why wouldn’t other companies follow suit, with a model that makes such happy and productive employees?
Has anyone ever seen any scholarly research on how this kind of openness and transparency affects productivity, interpersonnal relations, etc? What about office politics and jealousy when some people are paid more than others? Obviously this open culture works incredibly well at Whole Foods. I wonder how it would work in a high tech company.
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