Back in July Whole Foods CEO John Mackey was caught making inflammatory comments about a potential acquisition target and arguing optimistically for his own company under a pseudonym on a financial message board. He later apologized for his actions and slipped quietly back into corporate obscurity, albeit with a lot of egg on his face.

This wasn’t the first time we’ve seen social networking like forums or blogging get someone in trouble, and you can bet it won’t be the last. The interesting thing to watch here is how these mistakes are handled afterwards. The Whole Foods example is such a good one because we’re able to see exactly what he did, exactly what the public consequences were, and now, exactly how his company is dealing with it.

Whereas most of the attention will continue to be paid to corporate blogging and it’s risks and rewards, not as much attention is given to the fact that the advent of social networking means that all of a company’s employees now have a public identity, and like it or not these people and their opinions will absolutely reflect on the company they work for.

In John Mackey’s case, Whole Foods is following what looks like a pretty vanilla “CYA” plan of protecting themselves from something like this happening again. According to Terrence Russell of Wired, a source close to the matter says, “company executives can no longer post on blogs, message boards, or chat rooms about company matters — anonymous or otherwise.”

Unfortunately for Whole Foods and other companies following the head in the sand strategy, they’re not only fighting a losing battle but it’s a battle they shouldn’t be fighting anyway. In previous posts I’ve mentioned the wisdom of enabling and educating your employees rather than muzzling them but apparently one lesson in risk was enough to set the table at Whole Foods. As I see it there are two big problems with what they’re doing:

• As customers continue to provide feedback and suggestions online in forums of their own choosing, employees should be empowered to respond and trained to represent the company responsibly.
• As their employees continue to embrace social networking, Whole Foods has just forfeited the voice of their most passionate advocates in the most efficient and effective communications medium in history

These are not easily quantifiable risks, but potential opportunity costs. These problems wouldn’t result in Whole Foods being susceptible to embarrassment and an SEC investigation like Mackey’s faux pas did, but could very well result in them losing touch with their customers, losing market share to competitors and going out of business in a market where razor thin margins are par for the course. It seems like there ought to be some way to mitigate both sets of risks with a well thought out strategy that empowers employees while mitigating risk. Good thing for us companies like Sun are showing us how.