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Reputation Case Study, , , , , , , , , , , ,
Whole Foods interior

Whole Foods’ distinct—and even radical—approach to reputation management has been key to its success. Will that approach continue to work? We revisited our original case study about Whole Foods and analyzed the company’s online presence.

In January 2013, the Harvard Business Review Press published “Conscious Capitalism: Liberating the Heroic Spirit of Business,” a book examining Whole Foods founder John Mackey’s philosophy and the central role it has played in the grocery chain’s distinct reputation and success.  Business management expert Steve Denning also explores the implications of that philosophy in an in-depth Forbes article, but in practice it has involved a very active and innovative approach to reputation management.

While the organic food market continues to grow, Whole Foods has faced reduced earnings and threats from new competition. But the company has succeeded in creating a powerful reputation, and a strong online presence that reflects a large and loyal customer base. The foundations it has laid through effective reputation management, both online and off-, should see it through this difficult period.

Building a unique brand

The central component of Whole Foods’ reputation has been its professed commitment to a “higher purpose.” That is reflected in factors ranging from the company’s longstanding “Declaration of Interdependence” to its ban on unsustainable seafood. One early and important way the company established its reputation was by providing customers with “information and narrative, along with the food.” “It told stories about where the food came from, putting up displays by the seafood counter with photographs and descriptions of the real fishermen who had caught it all,” Nick Paumgarten wrote in his 2010 New Yorker  profile of Mackey. Paumgarten also cited the company’s decentralized management structure as a “key contributor to Whole Foods’ success, and to its reputation and self-image as a progressive business,” pointing out that the “high degree of autonomy” of regional divisions and individual stores has fostered “creativity and a sense of ownership.”

The manner in which Whole Foods maintains its core ideals throughout its operations helps explain its strong reputation. 

The challenges of managing a distinct reputation

But Whole Foods’ approach is not without its critics. Last February Daily Beast writer Michael Schulson scoffed at Whole Foods’ marketing and image in Whole Foods: America’s Temple of Pseudoscience.

In the New Yorker  profile, CEO of dairy company Stonyfield Gary Hirshberg described Mackey as Whole Food’s “greatest asset but also, at times, its greatest challenge.” Mackey’s perspective, principles and personality have been the source of the Whole Foods’ guiding philosophy. But a core challenge for the company—and for Mackey—has been adapting and maintaining its reputation. In 2007 an FTC investigation revealed that Mackey had anonymously attacked a competitor in online financial forums prior to Whole Foods’ offer to buy the company. That led to a realization, Mackey told Nick Paumgarten: “If I wanted to continue to do Whole Foods, there couldn’t be any part of my life that was secretive or hidden or that I’d be embarrassed [about] if people found out about it.”

Radical transparency has served whole foods well

Such radical transparency has generally served Whole Foods well, though there are exceptions, such as Mackey’s 2009 Wall Street Journal op-ed criticizing health care reform, which triggered a social media-fueled boycott. The response to that op-ed may have inspired Mackey to more closely examine the expectations that accompany his business’ progressive reputation. According to a Wall Street Journal article from last February, Whole Foods “doesn’t want to be known as the pricey grocery store for well-heeled, organic-food sophisticates.” So it implemented a “price perception” strategy to counter that reputation.

The outcry didn’t, however, move Mackey to recant his opinion on health care. “So many politicians and CEOs get to be sort of boring, because they end up suppressing any individuality to conform to some phony, inauthentic way of being,” he observed in Paumgarten’s profile. “I’d rather be myself.” Whole Foods posted a response statement on Facebook two days after the publication of the Op-Ed. The response qualified Mackey’s opinions in certain ways, but more importantly, it invited readers to post their opinions on the issue—an excellent example of Whole Foods’ effective use of online reputation management. With it, the company provided the forum for the discussion, while moving its focus from Mackey to the basic issue.

Surviving the storm

How will Whole Foods—and its reputation—weather this period of increased competition?

The financial community, for one, is not sure: CNNMoney assistant managing editor Paul R. La Monica recently described Whole Foods’ stock valuation as “rotting away.” Other analysts do not see increased competition from established brands like Walmart as a major threat: “Though increased competition could force Whole Foods to lower its prices … it is probably a stretch to assume that the upscale clientele normally found at an average Whole Foods store is suddenly going to flock to what is widely recognized as one of the sketchiest big-box retail stores in the country,” writes states Ethan A. Huff in Natural News.

Customer’s commitment to the brand reflected on social media

But what about Whole Foods’ customers? You can sense their commitment to the brand by visiting Whole Foods’ pages on Facebook (1.5 million likes); Twitter (3.72 million followers), Instagram (200,000 followers), Pinterest (191,564 followers) and Google + (60,000+ followers). As with any company’s social media platforms, you can glean insight its business from the nature of customer complaints as well as how they are handled. Nonetheless, one should assume that the most aggressive rants have probably been moved to some digital planet far away, however justified they may be.

Much is reported about the reputations of companies, but to get a balanced sense of consumer sentiment, clear your browser’s history, Google “Whole Foods” and skim the first five pages of results. Then run a comparison check of its competitors – and check out the quality and content of their social media platforms. This is an excellent way to gauge management style and how consumers regard a company.

It is clear that Whole Foods has succeeded in managing its reputation with its consumers, and that its image as a leader in the organic food market remains on firm foundations. As long as it has that strong reputation — its most valuable asset — the company will survive.

 
 
Reputation Case Study, , , , , , , , , , ,

A new book published by Harvard Business Review highlights how Whole Foods founder John Mackey’s philosophy has played a central role in the grocery chain’s distinct reputation and success.

Whole Foods’ “higher purpose” is reflected in everything from its longstanding “Declaration of Interdependence” to its recent ban on unsustainable seafood. One key way the company established its distinct reputation was by providing customers with “information and narrative, along with the food.” “It told stories about where the food came from, putting up displays by the seafood counter with photographs and descriptions of the real fishermen who had caught it all,” Nick Paumgarten wrote in a 2010 New Yorker profile of Mackey. Paumgarten also cites the company’s decentralized management structure as a “key contributor to Whole Foods’ success, and to its reputation and self-image as a progressive business,” and that the “high degree of autonomy” of regional divisions and individual stores has fostered “creativity and a sense of ownership.” Some stores, for example, have added bars serving craft beer and local wine, while the company’s Portland, Maine location sells live lobsters. Whole Foods’ strong reputation springs from the fact that its core ideals are reflected throughout its operations.

Mackey’s unique perspective, principles and personality have been the source of the Whole Foods’ guiding philosophy, but, as the CEO of dairy company Stonyfield Gary Hirshberg told Paumgarten, Mackey is “management’s greatest asset but also, at times, its greatest challenge.” In 2007 an FTC investigation revealed that he had anonymously attacked a competitor in online financial forums prior to Whole Foods’ offer to buy the company. That led to a realization, Mackey told Paumgarten: “If I wanted to continue to do Whole Foods, there couldn’t be any part of my life that was secretive or hidden or that I’d be embarrassed [about] if people found out about it.” Such radical transparency has generally served Whole Foods well, though there are exceptions, such as Mackey’s 2009 Wall Street Journal op-ed on health care reform, which triggered a social media-fueled boycott.

That response may have inspired Mackey to more closely examine the expectations that accompany his business’ reputation. According to a Wall Street Journal article from last February, Whole Foods “doesn’t want to be known as the pricey grocery store for well-heeled, organic-food sophisticates” and has implemented a “price perception” strategy to counter that reputation. The outcry didn’t, however, move Mackey to recant his opinion on health care. “So many politicians and C.E.O.s get to be sort of boring, because they end up suppressing any individuality to conform to some phony, inauthentic way of being,” he observed in Paumgarten’s profile. “I’d rather be myself.”

 
 
Branding, Social Media, , , , , , , , , , , ,
Republican National Convention: Remaking Romney Image?

The Republican National Convention kicks off at Florida’s Tampa Bay Times Forum today, a four-day extravaganza of brand and reputation management.  A recent New York Times article looks at how the party plans to use the convention to “accomplish something a year of campaigning has failed to do: paint a full and revealing portrait of who Mitt Romney is.” Romney’s team will aim to champion his business career and religion and “overcome perceptions that Mr. Romney is stiff, aloof and distant,” according to the Times.

Branding Experts Weigh In

Embracing those two core facets of Romney’s professional and personal life—his private sector experience and devout Mormon faith—could go a long way toward portraying him as a well-qualified and compassionate candidate as opposed to “Romney the Unknowable.” In a Harvard Business Review blog post branding strategist Dorie Clark recently said that Romney’s “selection of Paul Ryan as his vice presidential running mate is, from a branding perspective, a masterstroke.” The decision “draws attention to Romney’s North Star: no one has ever, ever doubted his belief in the salutary power of business,” Clark explains, adding that “when your brand is in doubt, it pays to play to your strengths.” The convention will give Romney a chance to build on that move and cement his brand. “It needs to be credible and defensible, but also aspirational, something Americans and the media believe and can believe in,” says branding strategist Howard Breindel.

Romney’s team will need to tread carefully, though, when it comes to presentation. While they have told the Times that they are “conscious of trying to make it not seem grandiose” and have crafted designs “to convey warmth, approachability and openness,” the convention’s $2.5 million stage and its 13 massive video screens have already been mocked as “smoke and mirrors” and an attempt to “humanize the Romneybot.” If such criticism rings true, Romney’s own hand in the convention’s design could make him seem even more out of touch.

Social Media Key to Convention

Social media, on the other hand, is allowing Romney and his party to reach beyond the pageantry and connect more directly with the millions of Americans who will be following the convention—a strategy University of North Carolina journalism professor Daniel Keiss told the Associated Press will be “viewed as more credible and more authentic.” RNC organizers have teamed up with Google to create a “customized YouTube page that will carry both the convention livestream and key videos, but will also have space for the Twitter conversation around the convention and for social metrics indicating what people are talking about,” according to BuzzFeed. While a recent Pew Research poll found that Obama leads Romney when it comes to social media numbers, Republican digital strategist Vincent Harris points out that “more people are actually interacting with content on Mitt Romney’s page.” The RNC’s YouTube-based “Convention Without Walls” could capitalize on that engagement while also helping prevent the party from losing control of the conversation.

The Republican National Convention will be a critical moment in this year’s presidential race. To maximize its effect, the party is working to perfectly balance of pomp with authenticity, and carefully crafted messages with the unscripted social media. Unlike in past conventions, the elaborate video displays may prove to be less important than the multitude of smaller screens glowing in front of Americans across the country.