What can we learn from a company that is a benchmark in ethics, purpose, and sustainability?
A review of the book “Let My People Go Surfing: The Education of a Reluctant Businessman” by Patagonia Founder Yvon Chouinard
Disclaimer: This review represents my take on this book. It is not a summary nor of course replace its reading. Its goal is to help us reflecting on key issues raised by the authors as well as encouraging more people to read?the full book - which I strongly recommend.
“I’ve been a businessman for almost 60 years. It’s as difficult for me to say those words as it is for someone to admit being an alcoholic or a lawyer.” This is how Yvon Chouinard begins “Let My People Go Surfing”, a passionate book that mixes his biography with the incredible history of Patagonia, a sports clothing company that is a reference in corporate sustainability.[1]
The opening sentence of the work demonstrates how unlikely it would be Chouinard, with a history completely outside conventional corporate standards, to become the owner of a successful company with half a century of existence and revenues of almost US$ 1 billion. As he himself acknowledges, “I grew up with disdain for big corporations. The typical young Republican’s dream of starting a business, growing as fast as possible, taking it public, and retiring to the golf courses has never appealed to me.”[2]
“I grew up with disdain for big corporations. The typical dream of starting a business, growing as fast as possible, taking it public, and retiring to the golf courses has never appealed to me.”
Starting with his humble origins. Chouinard was born in 1938 in Maine, a state in the extreme northeast of the United States. The French surname comes from his father, a French-Canadian with only three years of schooling who worked in varied manual activities as a carpenter, electrician, plumber and loom machine operator. One of Chouinard’s most vivid childhood memories is seeing his father in the kitchen drinking a bottle of whiskey and the proceeding to pull out some of his teeth with electrician’s pliers so he wouldn’t have to spend money on a dentist.
The love of adventure came from his mother. It was her idea to move to California in 1946. The family, consisting of husband, wife, and four children, sold everything they had and drove west in a station wagon. Somewhere along the famous Route 66, they came across an Indian woman with her hungry children. His mother decided to give her all the preserved corn they had prepared for the trip. As Chouinard recalls, “that incident was probably my first lesson in philanthropy”.[3]
From childhood, Chouinard displayed attitudes of disobedience to the status quo that could easily classify him as a misfit. He was averse to school and authority figures. From the age of ten, he regularly skipped classes to cycle and fish in the surroundings. School punishments for being a troublemaker were constant. The classes were just a time for imagining his next adventures.
Chouinard’s rebelliousness only increased over the years. As a teenager, he joined a group of friends to create a falconry club dedicated to training birds of prey for hunting. For Chouinard, this was the most formative time of his life. The climbs began in this period, with the aim of reaching the hawks’ nests.
To climb, Chouinard needed pitons, metal spikes put in the climbing surface that acts as an anchor for climbers. That’s when he started getting involved in the business world. In 1957, he learned to produce pitons on his own and to sell the surplus he didn’t use in the back of his car. Profits were pretty slim, around $0.50 to $1.00 a day. To survive, he fed on cat food, potatoes, squirrels, blue grouse, and porcupines. As he recalls, “I slept two days a year or more in my old army-surplus sleeping bag. I didn’t buy a tent until I was almost forty... The natural world was our home.”[4]
Chouinard’s life was so erratic that in 1962 he and a friend were arrested in Arizona for riding a freight train. They spent 18 days in prison, charged of “wandering around aimlessly with no apparent means of support.”[5] When they were released, with just 15 cents in their pockets, the cops gave them half an hour to get out of town.
The rebellion continued when Chouinard was called up for the draft. He unsuccessfully tried to fail by drinking a bottle of soy sauce to artificially raise his blood pressure. Soon after, he was sent to Korea. There, he created numerous troubles with his constant insubordination until he was assigned a bureaucratic task that gave him time to climb the Korean mountains. Two years later, in 1964, he was discharged.
Chouinard returned to producing his own climbing gear, this time with a partner named Tom Frost. They made a high-quality product whose demand only increased. Over the years, Chouinard Equipment materials have become a benchmark in the market for their strength, lightness, simplicity, and functionality.
By the late 1960s, his company had become the largest supplier of climbing equipment in the United States. Despite the growth, profit margins were very low. The company remained just a way for Chouinard to pay the bills and finance his adventures. It was during this period that the entrepreneur married Malinda Pennoyer, who played a key role in the creation and evolution of Patagonia.
The start of activities in the clothing sector occurred by chance. During a trip to Scotland in 1970, Chouinard bought a rugby shirt, thinking it would make a great outfit for rock climbing. In addition to having a highly resistant fabric, the clothes had bright colors, something unusual for men to wear at the time. Upon returning to the States, all his friends asked where they could get one of those.
Chouinard, Malinda and their partner Frost then ordered a few shirts from Umbro in England. They sold straight off. Before long, they began placing orders with manufacturers located in other countries where rugby was popular, such as New Zealand and Argentina. According to the entrepreneur, that’s when they started to see selling clothes as something more promising than the equipment company.
Chouinard didn’t just become a reseller: he started to innovate. Taking advantage of his experience as a climber and blacksmith, he began to create functional, resistant, and simple clothing that stood out from the existing models for the practice of outdoor sports.
In 1973, they founded a separate company from Chouinard Equipment called Patagonia. The name was intended to bring back to memory remote places like Argentine Patagonia, which Chouinard had discovered after taking an incredible six-month road trip across America a few years earlier. To reinforce the link with the real Patagonia, they created the company’s iconic logo, virtually unchanged to this day, with a stormy sky and jagged peaks based on the famous Mountain Fritz Roy skyline, located on the border between Argentina and Chile.
It was from there that Chouinard realized that, even without meaning to, he had become a businessman. As he sums it up: “One day, after considering our responsibilities and financial liabilities, it dawned on me that I was a businessman and would probably be one for a long time. It was also clear to me that in order to survive at this game, we had to get serious”.[6]
“One day, after considering our responsibilities and financial liabilities, it dawned on me that I was a businessman and would probably be one for a long time. It was also clear to me that in order to survive at this game, we had to get serious.”
Despite the rebellious and relatively inconsequential life story, another side of Chouinard learned during his climbs became increasingly evident: that of a studious and meticulous person, who reflected in depth on the steps to be taken and the way forward. In 1978, for example, he published a book on ice-climbing techniques that had taken him twelve years to write. Chouinard might be an adventurer in the natural world, but not in the business world.
During the following years, the entrepreneur read many books and participated in numerous activities in the search for business knowledge. In particular, he studied the Japanese and the Scandinavian management styles in depth, discarding the American conventional management model from the beginning.
After this period of reflection and learning, Chouinard realized that he would never be happy playing by the conventional rules of business: if he had to be a businessman, then it was going to be by his own rules, values, and philosophy.
Chouinard decided that he would not give up on creating a friendly and fun work environment. A place where people would feel happy and self-motivated to do their best every day. In his words: “We needed to be surrounded by friends who could dress whatever they wanted, even be barefoot. We all needed to have flextime to surf the waves when they were good, or ski after a big snowstorm, or stay home and take care of a sick child. We needed to blur the distinction between work and play and family.”[7]
“We needed to be surrounded by friends who could dress whatever they wanted, even be barefoot. We all needed to have flextime to surf the waves when they were good, or ski after a big snowstorm, or stay home and take care of a sick child. We needed to blur the distinction between work and play and family.”
It was with this entrepreneurial mindset that Patagonia took off throughout the 1980s. During that time, its revenue simply increased tenfold, reaching $100 million. It is worth noting that, since the late 1970s, the company had been run by a CEO named Kris McDivitt, with Chouinard being responsible for constantly traveling and coming back with good ideas.
In the early 1990s, Patagonia faced its first – and to date only – financial crisis. A crisis that proved to be fundamental for the company to become the successful model it is today. In a perfect display of resilience, Patagonia not only survived adversity: it used it to become a better organization than before.
The crisis was self-inflicted. Similar to many fast-growing companies, Patagonia experienced a serious cash flow problem resulting from a reckless strategy of growing at the fastest pace as possible. With a history of uninterrupted profitability and double-digit growth since its founding, the company aimed to reach revenues of $1 billion in a few years.
In 1990, Patagonia geared its financial and production plans for another 40% growth. To avoid last-minute hiring, it hired more than 100 people in advance. In addition, it placed large orders with its suppliers. The problem is that the United States has entered a recession and growth has proved to be impossible to achieve. As Chouinard points out, “our sales crunch came not from a decline from the previous year but from a ‘mere’ 20% increase!”.[8]
Failing to achieve the intended goal, however, nearly bankrupted Patagonia. Dealers canceled orders and inventory began to build. Its primary lender, which was also in financial trouble due to the national recession, sharply reduced its credit line. To survive, it was necessary to cut expenses radically.
Chouinard sums it up this way: “Looking back now, I see that we made all the classic mistakes of a growing company. We failed to provide proper training for the new company leaders, and the strain of managing a company with eight product divisions and three channels of distribution exceeded management’s skills… I wondered why, after all those years with growth of 30% to 50% a year, Patagonia was about to hit the wall.”[9]
“Looking back now, I see that we made all the classic mistakes of a growing company. We failed to provide proper training for the new company leaders, and the strain of managing a company with eight product divisions and three channels of distribution exceeded management’s skills… I wondered why, after all those years with growth of 30% to 50% a year, Patagonia was about to hit the wall.”
Until then, the company had never laid anyone off throughout its history. What seemed unthinkable became inevitable: by trying to grow too fast, the company had added too many people to do was turned out to be too little work. On July 31, 1991, Patagonia laid off 120 employees – about a fifth of its workforce at the time. For Chouinard, that day known as “Black Wednesday” was by far the worst day in the company’s history.
The crisis forced the company to review its priorities. Chouinard took a dozen top managers on a trip to the mountains of the real Patagonia in Argentina. There, they wondered why they were in business and what kind of company they wanted Patagonia to be. They carried out a series of in-depth discussions about the values they had in common, the culture they shared and what had driven them to dedicate their lives to Patagonia, Inc.
Chouinard and the other leaders understood that they needed to develop philosophical and inspirational guides that would allow finding the right answers to everyday challenges. Upon return, the company constituted its first board of directors. One of the advisers was Jerry Mander, an author and deep ecologist. At a board meeting where everyone was struggling to put into words the organization’s ideals, Mander skipped lunch and went off by himself. Hours later, he returned with a text that ended up being the basis of Patagonia’s first purpose and values statement.
Chouinard began to lead weeklong employee seminars at camps. The purpose of these long conversations, held under the trees, was to teach everyone about the company’s business and environmental ethics and values. In his memoirs, he states: “I realize now that what I was trying to do was to instill the lessons I had already learned as an individual and as a climber, surfer, kayaker, and fly fisherman. I had always tried to live my own life fairly simply... We decided that growth and expansion were not Patagonia’s core values. We need to be honest with ourselves. The sooner a company tries to be what it is not, the sooner it tries to ‘have it all’, the sooner it will die.”[10]
“We decided that growth and expansion were not Patagonia’s core values. We need to be honest with ourselves. The sooner a company tries to be what it is not, the sooner it tries to ‘have it all’, the sooner it will die.”
The entrepreneur realized that Patagonia had exceeded its limitations, becoming dependent on unsustainable growth. From then on, the organization would be inspired by the seven-generation planning of the Iroquois Indians. These natives have, as part of their decision-making process, a person who represents the seventh generation of their community in the future. Since then, Chouinard has established that all executives should make decisions as if the company would be in business for a hundred years.
The crisis was also crucial for Chouinard to understand clearly, 35 years after founding the company, why he was in the business world. Until then, he believed that his goal was just to generate money to contribute to environmental causes. That was true.
But more than that, what the entrepreneur really wanted with Patagonia was to create a model that could inspire other companies in their own quest for greater environmental stewardship and sustainability. Patagonia would be fundamentally driven by the quest to build the highest quality products at the minimum environmental impact, defined as the essence and purpose of the company.
Things have been going very well in Patagonia since the crisis of the early 1990s. Ever since, the company grows at a controlled rate of around 5%-10% a year. It regularly receives many awards for its cutting-edge practices in the social and environmental spheres. In 2019, for example, Patagonia won the “Earth Champion” award for its numerous environmental initiatives by the UN, the entity’s highest honor. Chouinard believes that facing a serious adversity was fundamental to success as it was the crisis that led them to articulate Patagonia’s philosophies and to become the reference they are today.
The philosophies mentioned by the entrepreneur are a central element for the functioning of Patagonia, a true expression of its values applicable to all parts of the company. It has eight core philosophies for design, production, distribution, marketing, finance, human resources, management, and the environment.
The philosophies are a set of general guidelines, not specific rules. As Chouinard points out, “although they are set in stone', their application to a situation is not. The methods of conducting business may constantly change, but our values, culture, and the philosophies remain constant.”[11]
Patagonia has eight core philosophies. The philosophies are a set of general guidelines, not specific rules. They are a central element for its functioning, a true expression of its values. As Chouinard points out, “although they are 'set in stone', their application to a situation is not. The methods of conducting business may constantly change, but our values, culture, and the philosophies remain constant.”
The philosophies allow employees to work with greater autonomy. With them in hand, they come to know the criteria for making decisions without waiting for orders from a boss or having to follow a rigid pre-established plan.
An example is the product design philosophy. The first part of Patagonia’s mission is “Make the best products.” Chouinard says that the product is the company’s raison d'être and the cornerstone of its business philosophy: “Having high-quality, useful products anchors our business in the real world and allows us to expand our mission”.[12]
Chouinard demands Patagonia clothing to be the best of its kind. Not just one of the best, but the best. To make this objective concrete, its design philosophy lists a series of objective criteria to be considered in the decision to launch each product, such as:
The obsession with quality, durability, and functionality is recognized by the public. Take Japan, a country with extremely detailed and demanding customers. The country is Patagonia’s second market worldwide. In Tokyo, there are stores solely dedicated to selling vintage models from Patagonia. Many clothes increase in value over time to the point where they are auctioned off for small fortunes.
Another Patagonia philosophy is to develop long-lasting and healthy relationships with quality suppliers. According to Chouinard, “If you decide to make each of your products the best of its kind, you cannot hand off your pattern or blueprint or model to the lowest-bid contractor?and expect to get anything close to what you had in mind”.[13]
“If you decide to make each of your products the best of its kind, you cannot hand off your pattern or blueprint or model to the lowest-bid contractor?and expect to get anything close to what you had in mind.”
Patagonia seeks to work with as few suppliers and contractors as possible. For many companies, this would not be a good strategy, as it increases the risk of becoming overly dependent on some factories. Interestingly, this is exactly the position Patagonia wants to be in: by becoming mutually dependent, the company and its suppliers have their successes connected. Mutual vulnerability, in other words, foster the development of trust relationships.
What Patagonia looks for most in its suppliers is quality. Its leaders are aware that factories that promise the lowest cost would hardly make the best products, provide good working conditions for their employees, and comply with the most modern environmental standards.?
On the other hand, suppliers that have a genuine commitment to high technical standards and healthy working conditions know that they will find on the other side a company willing to pay a fair price, establish long-term partnerships, and keep their sewing machines running at a good pace even in adverse market conditions.
Patagonia’s supplier selection is a thorough process that involves an audit to assess how employees are treated, interviews with representatives of civil society and other stakeholders to check if the factory has a positive reputation, and regular external inspections. Patagonia is a founding member of the Fair Labor Association, an organization founded in 1999 to monitor workplaces around the world.
The importance given by Patagonia to the relationship with its suppliers is part of a systemic perspective of the company. Its leaders believe that, by promoting fair treatment of workers in its production chain and better environmental practices, everyone will gain over time.
As Chouinard summarizes: “I think of Patagonia as an ecosystem, with its vendors and customers as an integral part of the system. A problem anywhere in the system eventually affects the whole, and this gives everyone an overriding responsibility to the health of the organism. We try to teach everyone who works with us to think like we do: that the entire supply chain should be seen as a functioning, interconnected system.”[14]
“I think of Patagonia as an ecosystem, with its vendors and customers as an integral part of the system. A problem anywhere in the system eventually affects the whole, and this gives everyone an overriding responsibility to the health of the organism. We try to teach everyone who works with us to think like we do: that the entire supply chain should be seen as a functioning, interconnected system.”
Patagonia’s environmental philosophy also deserves an obvious mention. For many, the company is simply the biggest global benchmark in corporate sustainability, an organization that is always on the frontier of best practices on the subject.
One of the elements of its environmental philosophy is to lead an examined life. That means having the courage to ask tough questions about environmental impacts and acting on the answers you get. For Chouinard, “most of the damage we cause to the planet is the result of our own ignorance. One of the hardest things for a business to do is to investigate the environmental effects of its most successful product and, if it’s bad, to change it or pull it off the shelves. Most companies don’t want to create ‘unnecessary’ problems to deal with”.[15]
“One of the hardest things for a business to do is to investigate the environmental effects of its most successful product and, if it’s bad, to change it or pull it off the shelves. Most companies don’t want to create ‘unnecessary’ problems to deal with.”
Patagonia itself has gone through a process of self-education. In 1994, just two years after the Eco-1992 and when the sustainability debate was still in its infancy, the company commissioned an independent assessment of the environmental impact of the four fibers mostly used in clothes – cotton, wool, polyester, and nylon.
To everyone’s surprise, the most polluting product was not a synthetic fiber such as polyester or nylon: it was traditionally grown cotton. Chouinard put the employees on several buses and took them to witness on the spot the damage caused to the soil, groundwater, atmosphere, and on workers involved in the cultivation of cotton.
In the fall of the same year, the board of directors unanimously determined that Patagonia should stop using all conventional cotton by the beginning of 1996. It was a courageous decision entirely based on its values. As Chouinard points out, “not to do so would have been unscrupulous. It would have violated our basic principle of making the highest quality products while causing the least possible environmental damage.”[16]
From a commercial point of view, the decision was a highly risky gamble. At that time, sportswear made from cotton accounted for 20% of the company's total revenue. In addition, organic cotton supply-chains were incipient, the raw material presented several technical challenges for the production of quality clothes, and its cost was three times higher than traditional cotton.
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The loss of revenue and profits in the short term was certain, while the results in the medium and long term were a big unknown. Patagonia had to eliminate a third of its cotton garment line, including several successful models. The company also reduced its profit margins so that the final price of its products increased by only $2 to $10 from previous prices.
Many of the contractors they worked with refused to participate in the process of switching to organic cotton, fearing reduced production volumes. The production team had to go back to the bottom of the supply chain in order to find enough raw materials. At the same time, they had to relearn how to make clothes with cotton that did not use chemical products that made them easier to make and handle.
In the years that followed, the decision to completely switch to organic cotton proved not only ethically sound, but commercially smart as well. As sustainable products have gained popularity, pioneering the development of a reliable supply chain and expertise in handling organic material to produce high-quality clothing has become another major competitive advantage for Patagonia. As Chouinard says, “every time we’ve elected to do the right thing, it it’s turned out to be more profitable.”[17]
Patagonia’s relationship with finance is another relevant topic. Profits are obviously not the measure of a company’s success. What really matters is what it does to fulfill its mission. Chouinard is very clear on this topic by saying that: “We measure our success on the number of threats averted: old-growth forests that were clear-cut, mines were never dug in pristine areas, toxic pesticides that were not sprayed.”[18]?It wouldn’t be an exaggeration to say that Patagonia is not a company with a cause; it is a cause that contains a company.
“We measure our success on the number of threats averted: old-growth forests that were clear-cut, mines were never dug in pristine areas, toxic pesticides that were not sprayed.”
In particular, what Chouinard and the other leaders are most proud of is that they have donated more than US$ 100 million to organizations dedicated to environmental preservation throughout the company’s history. Since the mid-1980s, Patagonia has allocated 10% of its pre-tax profits to these entities. In 1996, it decided to increase her contribution. From then on, it started donating 1% of its gross income or 10% of its profits, whichever is greater.
This means that, regardless of whether it has a profitable year or not, Patagonia must contribute. For Chouinard, it’s not about charity. It is an “Earth tax”, a self-imposed tax for living on this planet, using its resources and being part of its problems.
The initiative went further. In 2001, Chouinard founded “1% For The Planet”, an entity made up of companies that pledge to donate at least 1% of their revenues to efforts to protect and restore the environment. Each company makes its own contributions directly to one of thousands of registered groups. Currently, 1% For The Planet has more than 3,400 companies from 64 countries that have donated almost US$ 300 million.
Patagonia also changed its bylaws and legal constitution to expand the fiduciary duties of its managers so that they would be obliged to consider the interests of all stakeholders in decisions and to publicly report a set of performance indicators on the environmental and social dimensions. On January 4th, 2012, the date that a new law came into effect in California allowing companies to change their legal status to broaden their purpose, Chouinard personally delivered the documents that made Patagonia the first “Benefit Corporation” of the state.
Although profits are not part of the concept of success, Chouinard is aware that they are necessary so that Patagonia can not only survive, but also fund its cause and show other companies that it has a business model worth following.
For the entrepreneur, profitability is a kind of vote of confidence of its customers showing that they approve what they are doing. In his words, “making a profit is not the goal because the Zen master would say profits happen when ‘you do everything else right’. Our philosophy does not hold that finance is the root of all business. We recognize that our profits are directly tied to the quality of our work and our product.”[19]?
For Chouinard, profitability is a kind of vote of confidence of its customers showing that they approve what they are doing. In his words, “making a profit is not the goal because the Zen master would say profits happen when ‘you do everything else right’.”
Going public is totally out of the plans. Every week, Patagonia get approached by prospective buyers interested in acquiring its control and selling its shares on the stock exchange. For Chouinard, however, “being a publicly held company would put shackles on how we operate, restrict what we do with our profits, and put us on a growth/suicide track. Our intent is to remain a closely held private company, so we can continue to focus on our bottom line: doing good.”[20]
Another theme that differentiates Patagonia and constitutes one of the bases for its success is its culture. The founder has always been concerned with creating an organizational environment characterized by happiness and respect for people. For him, “if you care about having a company where employees treat work as play regard themselves as ultimate customers for the products they produce, then you need to be careful whom you hire, treat them right, and train them to treat other people right.”[21]
“If you care about having a company where employees treat work as play regard themselves as ultimate customers for the products they produce, then you need to be careful whom you hire, treat them right, and train them to treat other people right.”
One of the consequences of this vision is the company’s famous flextime policy called “Let My People Go Surfing”. Aware that it is not possible to predict when the weather will be good for the practice of certain sports or to solve life’s contingencies, employees are free to go surfing, spend an afternoon climbing, take a course or do some activity with their children. Chouinard believes this flexibility is very important as it allows retaining valuable people.
Patagonia does not look for “stars” in the market nor attend job fairs at MBA programs. Its collaborative and egalitarian culture does not tolerate people who want to be the center of attention. The company seeks to hire authentic users of its products, people committed to environmental causes and an outdoor lifestyle.
Working in Patagonia is a dream for many. On average, the company receives around 900 resumés from qualified people for each job opening. Hiring is carried out extremely carefully. Candidates are interviewed by all the potential colleagues they will have a relationship with, and the hiring decision is made by listening to all.
The trainings are long and detailed. They include an experience at various areas of the company. Chouinard sees it this way: “Our practices often require extra-effort in the short term: leaving a position unfilled while we scour for the right person, taking the extra time to work with someone who may not share your language, etc. In the long run, this extra effort pays off.”[22]
Diversity is another key theme in Patagonia. Chouinard’s naturalistic lifestyle made him aware of its importance: “We value diversity in all its aspects. I learned throughout my life that nature loves diversity. And that it hates monoculture and centralization.”[23]
“We value diversity in all its aspects. I learned throughout my life that nature loves diversity. And that it hates monoculture and centralization.”
Diversity was already part of the company’s first declaration of values in the early 1990s, a period when very few organizations paid attention to this issue: “It is our policy to employ people who share the fundamental values of this company, while representing cultural and ethnic diversity. Hiring people with different life experiences generates flexibility of thinking and openness to new ways of doing things”.[24]
More than half of all positions in Patagonia, including leadership, are held by women. The company has had two women as CEO for nearly half of its history. The most recent, Rose Marcario, remained in the role from 2013 to 2020. Not coincidentally, Patagonia created a set of women-friendly practices that made the “career versus children” choice simply nonexistent at the company. It was the first in the United States, for example, to pay paid maternity and paternity leave of at least 60 days for both sexes.
In 1984, at the initiative of Malinda, Chouinard’s wife, Patagonia created a childcare center called the Great Pacific Child Development. The center takes care of babies from eight weeks old to children with twelve-year-old (in this case, a van picks up the children from school and brings them to the center, saving parents from picking them up). It is not a day care center: it is a place made up of educators with excellent training who aim to provide high quality education. The issue is so important to the Chouinards that they believe that “the excellent kids we raise are our best ‘product’”.[25]
The center seeks to have children raised by a whole village. Babies, for example, are cared for by different educators and go through many laps constantly. Children get used to interacting with people of all ages. That’s why, according to Chouinard, “when a stranger says hello to them, they don’t run and hide behind their mothers’ skirt”.[26] Children are also encouraged to climb, fall, and scrape themselves. They are often considered by teachers to be the most confident and polite kids in class.
The childcare center has an intimate bond with the functioning of Patagonia. From the office, it is possible to hear the laughter and chatter of children. At lunchtime, families meet in the cafeteria. The little ones can even frequent the worktables. It is common, for example, to find a mother breastfeeding her baby during meetings.
Interestingly, what looks like social awareness also makes sense from a business perspective. The people who work in Patagonia are highly qualified. Replacing each employee costs an average of $50,000, including selection, training, and lost productivity costs. By having incredible 100% of mothers returning to work after pregnancy (versus a much lower percentage observed in most companies), the childcare center is considered by Chouinard to be a highly profitable investment.
As everything is done with leadership, Patagonia naturally pays special attention to this topic. For starters, Chouinard likes to point out the difference between managers and leaders. For him, the manager tends to avoid risks, while the leaders take risks, have a long-term vision, and encourage change.
Daily example and openness to change are the aspects most valued by Patagonia’s leadership. On leading by example, Chouinard and Malinda have office spaces similar to other employees, pay for their meals in the cafeteria, and do not have special parking spaces. The best spaces are reserved not for senior leaders, but for the most fuel-efficient cars, no matter who owns them.
The attitude of top executives toward change is particularly important. As Chouinard puts it: “The leadership of a business that they want to be around for the next hundred years had better to love change. For us, the most important mandate for the manager in a dynamic company is to instigate change… A wise leader knows that you move when everything is going too well. If you don’t move now, then you may not be able to move when the real crisis happens... Only businesses operating with a positive sense of urgency, dancing on the fringe, constantly evolving, open to diversity and new ways of doing things, are going to be here one hundred years from now.”[27]
“The leadership of a business that they want to be around for the next hundred years had better to love change. For us, the most important mandate for the manager in a dynamic company is to instigate change… Only businesses operating with a positive sense of urgency, dancing on the fringe, constantly evolving, open to diversity and new ways of doing things, are going to be here one hundred years from now.”
Patagonia, in short, is a great experiment. An inspiring experiment that demonstrates that it is possible to create ethical, sustainable, profitable companies that provide their employees and other stakeholders with a feeling of fulfillment and belonging. A feeling that they are part of a community on a mission for the common good.
Patagonia’s enormous success in all dimensions should serve as a motivation for other companies to follow in its path. A world full of “Patagonias” will be a much better world for all of us.
Book review by Alexandre Di Miceli.
Prof. Dr.?Alexandre Di Miceli?is a professional speaker, author, business thinker and founder of?Virtuous Company, a top management consultancy providing cutting edge knowledge on corporate governance, leadership, business ethics, and future of the work.
He is the author of “The Virtuous Barrel: How to Transform Corporate Scandals into Good Businesses” as well as of the best-selling books on management, corporate governance and business ethics in Brazil, including “Leadership Pills: 10 Essential Readings for Building Organizations of Excellence in the 21st Century”, “Resilient Companies: Thriving in a World of Uncertainty”,?“Corporate Governance in Brazil and in the World”, “Behavioral Business Ethics: Solutions for Management in the 21st Century”, and “Corporate Governance: The Essentials for Leaders”.
[1] Chouinard, Y. (2016). Let My People Go Surfing: The Education of a Reluctant Businessman--Including 10 More Years of Business Unusual. Penguin Books. 270 p. Portuguese Version: Chouinard, Y. (2015). Li??es de Um Empresário Rebelde. WMF Martins Fontes. 288 p.
[2] Ibid., p. 1.
[3] Ibid., p. 4.
[4] Ibid., p. 13.
[5] Ibid., p. 16.
[6] Ibid., p. 38.
[7] Ibid., p. 41.
[8] Ibid., p. 60.
[9] Ibid., p. 59-60.
[10] Ibid., p. 66.
[11] Ibid., p. 74.
[12] Ibid., p. 77.
[13] Ibid., p. 111.
[14] Ibid., p. 115.
[15] Ibid., p. 190-191.
[16] Ibid., p. 194.
[17] Ibid., p. 194.
[18] Ibid., p. 70.
[19] Ibid., p. 151-152.
[20] Ibid., p. 155.
[21] Ibid., p. 158.
[22] Ibid., p. 162.
[23] Ibid., p. 162.
[24] Ibid., p. 64;162.
[25] Ibid., p. 163.
[26] Ibid., p. 163.
[27] Ibid., p. 172-173; 228.?
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