Patagonia

Patagonia became the first certified B Corp in California in January 2012. A B Corporation is a for-profit company with a specific social or environmental purpose. The board is obliged to protect these non-financial interests.

Where most brands use marketing to convert prospects into customers, Patagonia wants to turn customers into activists. Patagonia is famous for having run full-page ads reading, “Don’t buy this jacket.” The ads were part of its “Common Threads Partnership.” Patagonia reckons that many of us in the developed world have enough clothes in our closets to keep us warm for a lifetime. And yet we keep buying new clothes, which are environmentally harmful to produce and will end up in a landfill. The Common Threads Partnership takes a serious stab at reducing (making clothes that last longer), repairing (Patagonia repairs clothes for its customers), reusing (the company resells your used clothes on eBay or in their stores’ Worn Wear section), and recycling (you can return your old clothes to Patagonia and they recycle them). Will this initiative harm Patagonia’s growth in the short term? Yes. Every repaired and every reused jacket is one less jacket bought. Will it increase its growth in the long term, through higher customer loyalty? Perhaps. But Patagonia’s decision wasn’t driven by forecasts and financials. The company chose the path its purpose called for. For more on Patagonia’s marketing approach see, The Purpose-Driven Marketer: How Patagonia Uses Storytelling To Turn Consumers Into Activists.

Patagonia has gone beyond the boundaries of the organization with its "Footprint Chronicles". Information transparency has been extended to suppliers and customers. Customers can see where everthing is made, how it is made, what the conditions are like, what the impact of transportation and water usage is on the overall carbon footprint. A major part of the organization's purpose is served by employing this radical degree of honesty with regard to information and information flow when dealing with outside parties. Information exchange with suppliers and customers via email and internet is used to fuel continous improvement.

Yvon Chouinard founded what would later be called Patagonia in 1957 to produce climbing pitons. The California-based company has grown into a leading outdoor apparel maker, committed to being a positive influence on the environment.

In Patagonia hire is made slowly with interview from peers, as much as possible from withiɳ.

Patagonia embraced reduction of their environmental foot-print ― even at the risk of negative impact to the bottom line. Yvon Chouinard, Patagonia’s founder, gives this example:

"In the mid-nineties, we decided to change the packaging of our thermal underwear. We were using a thick, wraparound cardboard header inside a heavy Ziploc plastic bag... For the heavier-weight expedition underwear, we decided to go without any packaging at all and hang them up like regular clothing... For the underwear made of lighter-weight material, we just rolled them up and put a rubber band around them. We were warned to be prepared for a 30 percent cut in sales... we were competing with companies...extremely competitive with their packaging... We did it anyway because it was the right thing to do. The first year this practice kept twelve tons of material from being shipped around the world... and being dumped into landfills... it saved the company $150,000 in unnecessary packaging... (and) brought us a 25 percent increase in thermal underwear sales. Since they weren’t hidden away in a package and had to be displayed like the regular clothing, people could feel the material and appreciate the quality. And since they were displayed like the other clothes, we were forced to make our underwear look like regular clothing, to the point that now most Capilene underwear tops can be worn as a regular shirt, fulfilling our goal of making clothes that are multifunctional."

Most strikingly, Patagonia resolved in the summer of 1994 to replace all conventionally grown cotton with organic cotton... The raw material cost three times more, and the cotton product line was reduced from 91 styles to 66. It was a big risk. And yet Patagonia felt there was no alternative... cotton fields that covered only three percent of the world’s farmland were responsible for 10 percent of the worldwide use of pesticide and 25 percent of the use of insecticides. Against all expectations, Patagonia’s organic cotton program turned out to be financially beneficial. More importantly, it has convinced others in the industry to follow suit.

When the company moved its warehouse from California to Nevada, many colleagues moved too. Some realized that Nevada has lots of wild country and federal land, but very little of it was protected as wilderness. Four employees took the initiative. They got support from company leaders in the form of salries and facilities. They built a broad coalition, went to Washington, and lobbied. As a result, 1.2 million acres of wilderness were protected. ^[2]

Patagonia, the outdoor apparel maker, is 100% owned by its founder, Yves Chouinard and his wife.^[3] Mr. Chouinard can therefore presumably do whatever he wants with Patagonia, and this no doubt has given him great freedom to guide the company into a Teal organization. Interestingly though, Patagonia has gone to the trouble of attaining benefit corporation status, perhaps as a result of Chouinard’s desire to give the company some protection from potential future owners or perhaps out of a desire to make a symbolic gesture. Patagonia has gone even further by becoming the first Californian company to achieve “B Corp certification” at the beginning of 2012 (while often confused, “benefit corporation” and “B Corp” are not the same). B Corp certification is a private certification issued by B Lab, a global non-profit, to companies which meet its standards of “verified, overall social and environmental performance, public transparency and legal accountability.”^[4]

At its headquarters in Ventura, California, Patagonia hosts a Child Development Center for employees’ children, from a few months up to kindergarten age. Children’s laughter and chatter are among the regular sounds at the office, coming from the playground outside, from children visiting their parents’ desks, or from kids joining parents and colleagues for lunch at the cafeteria. It is not uncommon to see a mother nursing her child during a meeting. Relationships change subtly but profoundly when people see each other not only as colleagues, but also as people capable of the profound love and care young children inspire. When colleagues have just played with a baby over lunch, it’s that much harder to fly at each other’s throats when they sit in a meeting.^[5]

Yvon Chouinard, the founder and owner of Patagonia, didn’t set out to create a business at all, initially. Probably one of the people most unlikely to become a business founder, he stumbled on the purpose that would turn into a $540 million company employing 1,350 people.

As a kid, he spent every free minute outdoors— rock-climbing, diving, and training hawks for hunting. A misfit in school, Chouinard remembers that the classroom was mostly “an opportunity for me to practice holding my breath, so that on weekends I could free-dive deeper to catch the abundant abalone and lobster off the Malibu coast.” When he left school, he lived with no income, finding shelter in shacks on the beach or near the mountains, hopping on freight trains in pursuit of the next climb or dive. In 1957, he bought a used coal-fired forge from a junkyard and taught himself blacksmithing to make his own climbing pitons. When a few friends asked him to produce pitons for them, he found a way to sustain his simple lifestyle. For years, he would fabricate pitons in the winter months, making just enough money to spend April to July on the walls of Yosemite, devote the summer to the mountains of Wyoming, and then go back to Yosemite in the fall until snow fell in November. He wouldn’t have been considered a businessman by anybody, least of all himself. Now, as the owner of a multimillion-dollar company, he has turned into one, but he hasn’t lost sight of the lights and shadows of the profession:

"I’ve been a businessman for almost fifty years. It’s as difficult for me to say those words as it is for someone to admit to being an alcoholic or a lawyer. I’ve never respected the profession. It’s business that has to take the majority of the blame for being the enemy of nature, for destroying native cultures, for taking from the poor and giving to the rich, and poisoning the earth with the effluent from its factories. Yet business can produce food, cure disease, control population, employ people, and generally enrich our lives. And it can do these good things and make a profit without losing its soul."^[6]

Chouinard’s defining experience as a businessman came as he climbed up a mountain in 1970.

"After an ascent of the Nose route on El Capitan, which had been pristine a few summers earlier, I came home disgusted with the degradation I had seen. The repeated hammering of hard steel pitons, during both placement and removal in the same fragile cracks, were severely disfiguring the rock. Frost [his friend and partner in the forge] and I decided we would phase out the piton business. … Pitons were the mainstay of our business, but we were destroying the very rocks we loved."^[7]

Chouinard and Frost found an alternative to hard steel pitons: aluminum chocks that can be wedged by hand and leave the rock unaltered. Two years later, Chouinard edited his first product catalog, and within a few months, the piton business was done; chocks sold faster than they could be made. Yvon Chouinard stumbled upon a need of the climbing world when he found a way for the activity he and others loved not to create environmental damage.^[8]