Yvon Chouinard on Patagonia Inc.’s radical management style

Below are some excerpts from an Outside Magazine article about Yvon Chouinard’s contrarian management book, Let My People Go Surfing.

Source: Outside Magazine, October 2005

Ventura, California–based Patagonia Inc., maker of technical outdoor apparel and gear, is an ongoing experiment. Founded in 1973, it exists to challenge conventional wisdom and present a new style of responsible enterprise. We believe the accepted model of capitalism, which necessitates endless growth and deserves the blame for the destruction of nature, must be displaced. Patagonia and its thousand employees have the means and the will to prove to the rest of the corporate world that doing the right thing makes for good, financially sound business.

Patagonia’s mission statement: "Make the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis." …our mission statement says nothing about making a profit. In fact, Malinda and I consider our bottom line the amount of good that a business has accomplished over one year. At Patagonia, profit is not the goal, because, as the Zen master would say, profits happen when "you do everything else right." In many companies, the tail (finance) wags the dog (corporate decisions). We strive to balance the funding of environmental activities with the desire to continue in business for the next 100 years.

No matter how diligent we are at Patagonia, everything we make causes some waste and pollution. So our next step is to pay for our sins until such a time that we hope to stop sinning. Since the early eighties we have donated $22 million in cash and in-kind donations to activist groups committed to environmental causes. In 1996, we pledged to give 1 percent of our total sales to environmental causes, meaning that whether we turned a profit or not, whether we had a great year or a bad one, we had to give. Last year this meant donations of $2.4 million. In 2001, we helped start 1% for the Planet, an alliance of 148 companies committed to giving at least 1 percent of their sales to saving the planet.

Our efforts, and those of others who work toward similar goals, are making an impact. The organic-food industry is growing at a rate of more than 20 percent a year. Worldwide demand for organic cotton has tripled in the nine years since we changed over. As this drives costs down, large companies like Nike buy organic cotton to blend in with their industrial cotton as a way to support the cause but not price themselves out of the market. Some of the fiber mills we work with, at our prodding, are actively researching ways to eliminate toxic materials like antinomy and methyl bromide in polyester.

If Patagonia can continue to be successful operating under the constraints of our environmental philosophy, then perhaps we can convince other companies that green business is good business, and they can gain the confidence to take a few steps in the right direction.

Our success and longevity lie in our ability to change quickly. Continuous innovation requires maintaining a sense of urgency—a tall order, especially in Patagonia’s seemingly laid-back corporate culture. In fact, one of the biggest mandates I have for my managers is to instigate change. It’s the only way we’re going to survive in the long run.

The American dream is to own your own business and grow it as quickly as you can until you can cash out and retire to the golf courses of Leisure World. The business itself is really the product, and it doesn’t matter whether you’re selling shampoo or land mines. When the company becomes the fatted calf, it’s sold for a profit, and its resources and holdings are often ravaged and broken apart, disrupting family ties and the long-term health of local economies. The notion of businesses as disposable entities carries over to all other elements of society.

When you get away from the idea that a company is disposable, all future decisions in the company are affected. The owners and the officers see that, since the company will outlive them, they have responsibilities beyond the bottom line. Perhaps they will even see themselves as stewards of the earth.

Patagonia will never be completely socially responsible. It will never make a totally sustainable, nondamaging product. But it is committed to trying. We simply don’t have any other choice. As the late environmentalist David Brower once put it, "There’s no business to be done on a dead planet."