#21 The Friday Digest — A Patagonian Purpose

Photo by Malik Skydsgaard on Unsplash

In the nearly fifty years since they were founded, when confronted with inconvenient facts about the harm of some of their products they have consistently chosen to do the right thing, despite considerable short-term losses to their bottom line.

Their values are;

  • Build The Best Product
  • Cause No Unnecessary Harm
  • Use Business To Protect Nature
  • Not Bound By Convention

Most companies have an ethical purpose and set of values.

In reality, many are unwilling or unable to accept the pain & impact involved in bringing these values to life.

For example, Enron’s values were:

  • Communication — We have an obligation to communicate
  • Respect — We treat others as we would like to be treated
  • Integrity — We work with customers and prospects openly, honestly, and sincerely
  • Excellence– We are satisfied with nothing less than the very best in everything we do (Enron, Annual Report, 2000, p. 29)

If you want a TL;DR on what happened at Enron, click here or here.

Examples of Patagonia walking the talk

Founded in 1973 by Yvon Chouinard. An avid mountain climber and self-taught blacksmith, he began making his own climbing pitons, the metal spikes climbers hammer into rockface when climbing. Eventually, other climbers wanted him to make theirs too, and the company that would become Patagonia was born. Eventually, however, Chouinard and his partner realized that their pitons were destroying climbing surfaces due to the repeated need to hammer them into rockface and then remove them. They found a viable alternative: aluminum chocks that could be wedged in by hand rather than hammered in and out of crevices. The switch from pitons to chocks — intentionally sunsetting a successful business for an untested one — was Chouinard’s first step in creating a company committed to doing what was right even when it was hard.

Photo by Blake Cheek on Unsplash

Since 1985, the ever popular outdoor brand has donated 1% of sales ($100m) to the preservation and restoration of the natural environment.

In 1991, employees in their Boston store began getting sick with headaches. An investigation discovered that workers were being poisoned by the formaldehyde on Patagonia’s cotton clothes, added by the mill that supplied them to prevent shrinkage and wrinkling.

If this was happening to retail workers thousands of miles removed from the cotton harvest, they could only imagine what things were like where the cotton was being grown. So they went to the fields themselves, taking key stakeholders along with them. They soon learned that conventional cotton growing, “despite only representing 2.5 percent of cultivated land, ingest[ed] 15 percent of chemical insecticides used in agriculture and 10 percent of pesticides,” according to Chouinard’s 2012 book, The Responsible Company.

By the fall of 1994, Patagonia committed to switching over its entire line of cotton clothing to organic cotton within 18 months. They and their partners had to innovate across the entire supply chain of cotton production, but by 1996, they did it: every piece of Patagonia’s cotton clothing was made from organic cotton.

In November 2018, the company gave the $10 million in profits made after President Trump lowered corporate tax rates to grassroots organisations focused on fighting climate change.

Most recently, Patagonia announced that they would stop putting additional logos on their clothing because “people tend not to pass logo’d gear down to their kids, and not everyone wants to be an advertisement on weekends, even if they’re proud to go into work on weekdays.” The result? Perfectly good gear ends up forgotten in the closet — or worse, gets tossed in the trash.”

The result is that this reduces the lifespan of a garment, often by years. In their announcement, they say, “In 2018 alone, 11.3 million tons of textiles ended up in landfills, and we’re not okay being a part of that. Knowing how deeply you care about your colleagues, family and fellow humans, we don’t think you are either.”

They acknowledge that this will likely cost them business. But Patagonia has a history of making hard trade-offs for the longer term good of the purpose they so deliberately and unashamedly serve.

Photo by Jamie Street on Unsplash

Wrapping up.

Patagonia’s revenue grew 25% in the middle of the 2008–2009 financial crisis, and a company statement said profits tripled between 2008 and 2014. In 2018, their revenue grew from $800m to $1b.

An example of how doing the right thing can become the foundation of lasting success?

If purpose & values don’t influence behaviour and decisions, they become nothing more than a set of platitudes. Culture evolves based on what is tolerated and culture isn’t just ‘top-down.’ It has to come from all over the company and be in everything you do.

Ultimately, the question to ask each day is how am I bringing our purpose & values to life?

Photo by Snowscat on Unsplash

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