Monday, August 13, 2012

Whole Foods and Google

My friend, who is actually an acquaintance, lost her job at Google yesterday. That was because she was part of Motorola Mobility when it was acquired by Google. And that is the essence of capitalism: For the greater good, we have to go through the lesser bad. Google employs more than 50k people and they decided to fire 4000 employees from a hefty, non-performing Motorola. 
Google is one of those great organisations which strives for human progress and innovation for the sake of innovation (and some money). And as goes with great organisations, Google is an American company.

A company most people in Asia would not have heard of is Whole Foods. Higher priced, superior quality produce for people who care about what they eat. This is a great post on Whole Foods, do watch the video on the page. The co-CEO talks simply and oddly, he knows quite a bit about how repurchases are a better bet and how they are not as good at a high price (like now); he talks of how technology and education is going to change the way people will shop and how people will become more aware and inquisitive. I love it. Here seems to be a CEO who understands his niche, who understands why it is difficult for someone else to do what his company is doing and goes to show that even in a mature market like the US, there is always scope for innovation and a superior product offering.

This is just one of the things that makes the US special - the country enables entrepreneurs and the entrepreneurs strive to deliver and become rich in the process. Oddly, this is what he says:

"John and I are capitalists. We are free-market people. I think the power of business is the greatest possible change agent in the world. But there are limits. There are people who are giving business a bad name. There are stories every day, the insider trading, there’s this Libor thing, for crying out loud. Where is the ethical compass? It’s just stunning to me. If you happen to believe, like I do, that business is the way that we’re going to grow and create jobs and create more prosperity in this country, business has a responsibility to do that, and to begin to take a wider circle of responsibility around employment and taking care of folks."

"There’s a cap on how much you can earn vs. how much store employees earn, correct? 
That salary cap, which is 19 times the average worker pay every year, is a hard cap. We’ve had that for years. Long before the Wall Street meltdown. It’s a governance standard that helps us keep faith with one another. Why should John or myself or anybody else on the executive team make 400 times more than the people working in the store? We don’t have company cars; we don’t have company planes; we all live by the same rules."

Isn't this amazing? I believe that when businesses are run with clear intentions which are focused on a greater good, there is more long term value to be added to each stakeholder. Naïve?

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