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Whole Foods market is the nation’s number one chain of natural foods supermarkets, operating more 350 stores under the names

CASE

Week 13 – Chapter 14 

Case 14-1:

Whole Foods Market:

 Using Teamwork as a Recipe for Success

Whole Foods market is the nation’s number one chain of natural foods supermarkets, operating more 350 stores under the names

  • Whole Foods Market
  • Bread & Circus
  • Bread of Life
  • Fresh Fields
  • Merchant of Vino
  • Wellspring Grocery

The stores are much different from the small “health food” stores that sprang up in the United States in the past. They are complete supermarkets with an emphasis on organically grown produce, fresh baked bread, wholesome deli foods and other health food products. Conspicuously absent at Whole Food Stores are

  • soft drinks in plastic containers
  • coupon dispensers for laundry detergent
  • salted potato chips
  • sugared cereals
  • other high sugar or high fat products

Now you know what the customer sees: a company that is passionate about health food and the people who buy health food products. But there is more to the Whole Foods story, which is the part that the customer doesn’t see. In the midst of the aging supermarket industry, Whole Foods has created a new approach to managing its employees – an approach based on teamwork and employee empowerment. Here is how it works.

Each Whole Foods store is an autonomous profit centre composed of an average of 10 self managed teams. A separate team operates each of the departments of the store, such as produce, canned goods, the bakery, and so on. Each team has a team leader and specific team goals. The teams function as autonomous units and meet monthly to share information, exchange stories, solve problems, and talk about how to improve performance. The team concept is present throughout the organization. The team leaders in each store are a team, store leaders in each geographic region are a team, and the leaders of each of the company’s seven regions are a team.

Why teams? There are two primary benefits that Whole Foods believes result from its emphasis on teamwork.

  1. First, it promotes cooperation among the firm’s employees. The teamwork approach facilitates a strong sense of community, which engenders pride and discipline in the work ethic of the employees.

An example of this is Whole Foods hiring practices. The teams, rather than the store managers, have the power to approve new hires for full time jobs. The store leaders do the initial screening, but it takes a two-thirds vote of the team, after what is usually a 30 day trial period, for the candidate to become a full time employee. This type of exclusivity helps a team bond, which facilitates a cooperative atmosphere.

Another example of how teamwork promotes cooperation amongst employees is evident in the Whole Foods team meetings. Each team holds a team meeting at least once per month. There is no rank at the team meetings; everyone is afforded an equal opportunity to contribute to the discussion.

  1. The second benefit that Whole Foods realizes from its emphasis on teamwork is an increased competitive spirit among its employees. The individual teams, stores, and regions of the company compete against each other in terms of quality, service, and profitability. The results of the competitions determine employee bonuses, recognition, and promotions. To facilitate competition, the company is extraordinarily open in terms of team performance measures.

For example, at a Bread and Circus store in Wellesley Massachusetts, a sheet posted next to the time clock lists the previous day’s sales broken down by team. A separate sheet lists the sales numbers for the same day the previous year. This information is used by the teams to determine “what it will take” to be the top team for the store for the particular week. This type of competition also exists at the next store level. Near the same time clock, once a week a facsimile (fax) is posted that lists sales at every store in the Northeast region, broken down by team with comparisons to the same week the previous year. There is one note of caution that Whole Foods has learned through experiences. Sometimes competition between tams can become too intensive. As a result, the company has had to “tone down” the intensity of the competition between tams and stores on occasion.

The overall results of Whole Foods management practices have been encouraging. The grocery industry is intensely competitive, and Whole Foods decision to use teamwork as a “recipe for success” represents a novel and innovative approach to management.

 Discussion Questions:

  1. Do you believe that Whole Foods emphasis on teamwork is appropriate for the grocery store industry? Why or Why not?
  2. What is your opinion of Whole Foods practice of sharing team performance data with all company employees? Do you believe that this practice risks creating “too competitive” a spirit among the firms employees? Explain your answer
  3. Would you enjoy working on a team at Whole Foods? Why or Why not?

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