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Summary:

Isn’t anyone going to stick up for poor Vic – er, I mean, John Mackey? You know, the volatile CEO of one of the decade’s biggest retail success stories whose renegade, loose-cannon style spurred the growth of Whole Foods before leading to his professional unraveling via […]

mackey and shieldIsn’t anyone going to stick up for poor Vic – er, I mean, John Mackey? You know, the volatile CEO of one of the decade’s biggest retail success stories whose renegade, loose-cannon style spurred the growth of Whole Foods before leading to his professional unraveling via some anonymous – well, supposedly anonymous – postings on Yahoo’s message board.

It’s a classic tale of hubris for the Internet age: Mackey’s fatal error was thinking the Internet would enshroud him in anonymity like an invisible cloak. And yet recycled screen names, IP addresses, Google searches – eventually there’s a way to tie your true identity to your anonymous dispatches.

The more time we spend on the Net the more we realize there is no such thing as anonymity anymore. The old New Yorker cartoon about how no one on the Internet knows you’re a dog is so 1990s. These days, people know about you online to the degree they’re willing to dig up the dirt. If no one knows you’re a dog in 2007, it’s probably because no one cares.

In Mackey’s case, it was – improbably – the federal government who dug deep enough. The Federal Trade Commission, which roused itself from its usual napping state to protest Whole Foods’ proposed takeover of Wild Oats on antitrust grounds, brought the eight-year-long deception to light. Mackey was posing as “rahodeb”, an anagram of his wife’s name, while talking trash to Wild Oats and touting Whole Foods.

The FTC’s complaint is on the Wall Street Journal‘s site, and the infamous footnote outing rahodeb is on page 4. Why the FTC is troubled by this merger and so few others, I’m not sure. But the entire complaint is worth a read as a masterful exercise in turning a CEO’s public (and less than public) statements against his own goals. All journalism should be this biting. The Journal, in turn, did an excellent job of cherrypicking the most damning bits from the Yahoo archives: rahodeb’s absurd “$800+” price target and her narcissistic assertion that Mackey is “cute.”

So it may be a fool’s errand to say a few words in favor of John Mackey, but maybe I’m a sucker for a lost cause. It’s not that I want to exonerate Mackey for his stupidity, but I do think a couple of obvious points concerning the Internet are being overlooked in this story.

First, Yahoo’s stock boards have long been accompanied by the deafening sound of grinding axes. Spend enough time there and you probably won’t come back: The most frequent posters are either touting a stock in hopes of sparking a short squeeze or ratcheting the price high enough for a profit; or they’re hedge funds mercilessly dissing a stock toward $0. And yet, if you stick with it long enough, you may get a sense of which way the wind is blowing a particular stock.

Given that, the SEC can easily find enough sound bites in rahodeb’s comments to nail Mackey, but it would be ignoring that broader context: a sort of chaotic and no-holds-barred context, but in the end a messily democratic one.

Then there’s a point brought up by TheStreet.com’s Aaron Task: more CEOs and especially lower-level executives are just as guilty of anonymous postings. If the SEC goes after Mackey, it had better go after the other corporate employees who have been surely doing the same thing. Fair, after all, is fair. (Dislcosure: I am a contributor to TheStreet.com).

What’s more, Mackey’s gambit is classic public relations, employing a third-party authority, however manufactured, to push your brand. Look at this video of PR pioneer (and Sigmund Freud’s nephew) Edward Bernays, who corralled 5,000 doctors into promoting the health benefits of a high-cholesterol, bacon-and-eggs breakfast. (You need RealMedia to see the video; you can also try the audio at NPR.)

Is persuading a phalanx of doctors to push your client’s PR message more ethical and less illegal than adopting an anonymous persona on Yahoo? Should it be? I myself doubt it, but maybe you can use your PR skills to make your case in the comments section.

I hate the old cliché about the Internet changing the rules, but it applies here. In an era where there’s no true anonymity on the Internet, where the truth will out whenever necessary, our only recourse is a form of micro-PR: managing the spin to meet our personal version of reality. That’s what we do when we blog – or when we comment on blogs. And in that sense, we are all John Mackey.

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  1. Jesse Kopelman Thursday, July 12, 2007

    “If the SEC goes after Mackey, it had better go after the other corporate employees who have been surely doing the same thing. “

    Isn’t that all that needs to be said? Rather than try and defend Mackey, I say congratulations to the SEC on this bit of good work, but now step it up!

  2. Jeff Mowatt Friday, July 13, 2007

    Well he doesn’t speak for me, which is ironic from one who endorses John Mackey’s vision of Conscious Capitalism. Let me illustrate, in a similar scenario, from the perspective of a victim.

    For the past year, a colleague and I have been under attack for our own ethical business stance. It began, as many of these things do with a minor disagreement when our detractor began by insinuating drug abuse. It moved up to the level of fraud allegations when we published NGO reports of “Death Camp, For Children” in Ukraine and the smear blog began with a vengeance. Though he’s a would-be politician we can’t name him because a UK barrister defends his anonymity with threats of legal action and Google the blog medium will not respond to complaints.

    Most recently, it’s escalated to insinuations of child molestation on a discussion forum, where fortunately, he’s been monitored.

    What our detractor objects to is that we want to do something about those without a voice, and that we advocate applying ethical business to help the disabled children in institutional care who are mistreated and condemned to die and the able bodied children whose outlook is one of prostitution, HIV infection, crime and suicide. That doesn’t tally with our detractors political objective, preserving the status quo.

    In a stroke, John has not only undermined the principles of the ethical paradigm we both endorse, but he’s also stepped straight into the same camp as the most odious campaigner, he who would have us shut our eyes to voiceless and least empowered, should they obstruct his personal agenda.

    John wouldn’t endorse this, I know, if he only understood what goes on elsewhere. Otherwise where does this playfulness end?

  3. Uh, when the FTC decides to lop off the corporate lobbying and musical jobs for Congressthugs – waltzing to the tune of corporate America, Pharmcos, weapons suppliers, Insurance industry, the Oil Patch Boys, etc. – then they might be doing something to justify their cushy chairs.

    I ain’t holding my breath, waiting.

  4. That Mackey’s behavior was irresponsible is without a doubt. Whether it was also criminal is the issue. Mackey deliberately used his anonymous attacks to hurt his competitor, and likely to drive down the value of a stock Whole Foods would try to acquire.

    Will the blogosphere’s defenders of transparency rush to condemn this unethical behavior by a supposedly “good guy company” with the same fervor that was directed against other larger corporations? Don’t you think Wal-Mart’s “flogging across America” was pretty tame by comparison?

    What will blogs become when they grow up? Join the conversation at http://jon8332.typepad.com/force_for_good/2007/07/what-will-blogs.html

    Jon Harmon
    http://www.forceforgoodcom.com

  5. Clearly Mackey is an idiot for those actions…but can someone explain the actual basis for opposing the merger? Who would a combined Whole Foods/Wild Oats actually threaten? Wal-Mart? Please….there are plenty of examples that probably deserve more scrutiny than this: the rebuilding of AT&T, Oracle buying up (well, everybody), and on and on.

  6. Michael Katcher Friday, July 13, 2007

    “or they’re hedge funds mercilessly dissing a stock toward $0″

    Talk about your blatant, false stereotypes. I cannot imagine any hedge fund manager spending his time on a Internet message board in hopes of talking down a stock. More to the point, you cannot ‘diss a stock toward $0′. If a company really is overvalued, it deserves to see its share price fall. If it isn’t, then no amount of talking will keep a stock down.

    I challenge you to find me a single example of that ever happening… that is a healthy company’s share price falling because of ‘hedge fund dissing’.

  7. Anybody who doesn’t know how to post anonymously on the net is incompetent and deserves to be outed.

  8. Cult of Mac » Blog Archive » Rumor: Fake Steve = Andy Ihnatko? Sunday, July 15, 2007

    [...] Andy, if it’s you? You’ve been doing a great job. Keep up the good work – or get John Mackey to do it for [...]

  9. ‘Rahodeb’ is actually an anagram for ‘Abhored.” Mackey loathed using a sock-puppet on Yahoo!

  10. Laurie Siegel Tuesday, July 24, 2007

    Don’t ya just love anagrams? I know I do, especially when all the letters are used to form a new word, or words spelled correctly. The anagrams that I see in RAHODEB are:
    BAD HERO
    DO REHAB
    HE BOARD
    I suppose there is no substitute for genuine lack of preparation.
    John Mackey may have exhibited a bit of indiscretion in recent behavior, however, his name is synonymous with some of the most brilliant and highly regarded corporate leaders. Whole Foods is one of the worlds leading retailer of natural and organic food, and with Mackey as it’s leader, continues to be an outstanding investment opportunity.

    meta4lor

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