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Communication Questions Color Whole Foods Facebook, Mackey Moves

Whole Foods Market (WFMI) has announced a new social networking initiative fast on the heels of news that founder John Mackey has given up his post as chairman of the company's board, developments can be viewed as related to the challenges the retailer faces.

Calls for changes in corporate governance at Whole Foods became more vocal after revelations that Mackey was anonymously posting on Yahoo! Finance message boards. His online commentary about Whole Foods developments and those at rival Wild Oats raised concerns that Mackey was influencing investor opinions unethically.

Online media hasn't been Mackey's only problem in terms of his communication style. An opinion piece he wrote in an August issue of The Wall Street Journal that touted the superiority of Whole Foods' market-based approach to health care was perceived by many of the retailer's customers as an attack on President Barack Obama's health care initiative. As Whole Foods has a clientele that tends to lean toward the Left, the result was a call for a boycott and criticism from investors about the negative results of Mackey's incursions into the public sphere, anonymous and otherwise.

Yet corporate activists had been hounding Whole Foods to separate the chairman and CEO titles for quite a time. As far back as 2000, the company created the position of lead board director in response to questions about governance and asserted that many of the chairman's powers had been shifted to it. Clearly, as Mackey himself admitted in his blog on the subject, the activists weren't appeased.

Those activists recognized that it's difficult to separate Whole Foods from a founder who also is CEO and chairman. So whatever pronouncements Mackey insisted on making -- or might make in the future -- even if uttered in an unofficial capacity, naturally prodded the activists to insist on the his formally relinquishing one of his major titles and creating a bit more distance between himself and the publicly traded company he leads.

In some ways, Whole Foods' Facebook initiative has a familiar ring, even if it is the first such effort the company has made on the social networking site. It's interesting in that the initiative features a charity component, which, potentially, provides a better fit with the community orientation inherent in social networks than is the case with straightforward commercial approaches.

The Whole Foods Facebook initiative, announced on Dec. 28, takes a New Year's resolution approach, asking participants to complete the statement: This is my year to--

Then the retailer offers three ways to finish up the statement, each with a charity attached. Selecting a statement can increase the contribution to the corresponding charity.

One charity is Growing Power a non-profit and land trust that provides healthy, safe and affordable food through community-based systems that emphasize sustainable agriculture and distribution. The statement completion that goes with Growing Power is: share my plate.

The second charity is Mission Organic 2010, an organization with a goal of increasing organic food's portion of the total edibles market from three percent today to 10 percent by 2010's end. The statement completion that corresponds with Mission Organic 2010 is: choose organic.

The final charity is The Non-GMO Project, a non-profit collaboration of manufacturers, retailers, processors, distributors, farmers, seed companies and consumers that has the stated mission of ensuring the sustained availability of grocery products that don't use genetically modified food sources. A quick review on the group's web site reveals that the retailers involved include a long list of independent natural food stores and food co-ops, and Whole Foods as the rare major chain. Central to the organization's function is the development of a standardized verifiable non-GMO labeling system.

So two of the resolutions serve Whole Foods commercial interests thoroughly and the third does so in the details. Which brings us back to Mackey and his decision to step down as chairman of Whole Foods. It's not that Whole Foods isn't a good company. It runs stores effectively and has managed to fashion a supermarket environment that appeals both to affluent shoppers who like service and less affluent consumers who are satisfied with self-service at lower price. It has adjusted to the soft economy after being roughed up as the recession and generally wins a high place in the annual Best Companies to Work for rankings.

Yet, sometimes Whole Foods management seems so focused in its own world that it isn't aware that what its doing might raise concerns among investors and shoppers alike. Certainly, despite the charitable framework of the company's Facebook initiative, the effort is sufficiently self-serving to appear essentially commercial in nature. As with Mackey's pronouncements, it's difficult to separate what is supposed to be the social good intended from the promotion of what's good for Whole Foods. To state it differently, those who admire Whole Foods for what it does well can't help but be concerned that, sooner or later, the Mackey-led management team, no matter titles, is going to do more than shoot the firm in the foot.

Oh, and by the way, one of the ways that critics tried to organize a Whole Foods boycott this summer was through a Facebook initiative, one that's still active.

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