What's Next?

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Arno Balzarini/AP

What’s Next for Patagonia?

August 22, 2008
by Liz Colville
Patagonia is one of the leaders in outdoor equipment, gear and accessories. It’s also a pioneer in human resources and sustainable merchandising, which has contributed to the company’s success. How is Patagonia reshaping corporate America, and what are its next moves?

Humble Beginnings on a Mountainside

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Patagonia, named after the mountainous region in Argentina and Chile, was founded by Yvon Chouinard in the 1970s. Chouinard started making tools for climbers in 1957 after his experiences climbing. He evolved his craft into a company called Chouinard Equipment, took up “clean climbing” practices that would prevent damage to rock face in the 1960s, and by 1972 had developed the Patagonia clothing line, where climbers could find tough, appropriate apparel as reliable as Chouinard Equipment’s climbing tools.

Redefining the Word ‘Job’

Steven Greenhouse, author of the 2008 book “The Big Squeeze: Tough Times for the American Worker,” describes Patagonia as an American company  that “prides itself on letting its employees take their play every bit as seriously as they take their work.” Environmentally conscious and dead serious about the quality of the products it sells, Patagonia encourages its employees to act as product testers and offers paid internships at environmental organizations to 40 of its employees every year. One percent of its annual profits are donated to environmental groups. Greenhouse ranked the company, along with Costco, as one of the movers and shakers of present-day corporate America.
Even lunchtime is revered at Patagonia. In a 2005 article in Transworld Surf magazine, Justin Cote notes that the company has also been recognized by Fortune magazine as one of the best places in America to work, and its culinary practices don’t disappoint. The cafeteria at the time of printing was “about 80 percent organic,” and offered “a new entrée every day.” After eating, employees “aren't hurried back to their cubicles. In fact, they’re encouraged to participate in an after-lunch yoga class, play a game of volleyball, or do some aerobics—all free of charge.”
In 2006 BusinessWeek profiled Scott Robinson, an employee of Patagonia who was converted to the company’s cause after reading Yvon Chouinard’s book “Let My People Go Surfing,” the founder’s “memoir and manifesto” on sustainable business. Robinson was attracted to Chouinard’s pioneering efforts in sustainability, a term that today has gained a lot of currency, and by his term “MBA,” or “managing by absence.” Chouinard is still the CEO, but allows himself and every employee to “get out” as much as possible.
In an excerpt from the book published in Outside magazine, Chouinard explains that while he is still a “reluctant businessman,” he doesn’t “jump into things without doing my homework. In the late seventies, when Patagonia was really starting to grow some legs, I read every business book I could find, searching for a philosophy that would work for us. I was especially interested in books on Japanese and Scandinavian styles of management, because I wanted to find a role model for the company; the American way of doing business offered only one of many possible routes.”
Chouinard adds that the company’s philosophies are just “guidelines.” Profit isn’t the company’s chief goal; achieving profit by “do[ing] everything else right” is. Furthermore, Chouinard reinforces the idea of need vs. want in approaching customers; their advertising is modest and even evasive. “We want customers who need our product, not just desire it.”

Next Steps: Organic and Recyclable Products

In 1996, Patagonia converted all of its cotton apparel to organic cotton and has enforced this practice ever since. On their Web site the company observes that “very little is pure or natural about cotton when it is raised conventionally.” The company switched to organic cotton farmers because their “methods support biodiversity and healthy ecosystems, improve the quality of soil and often use less water.”
Patagonia created “The Footprint Chronicles,” an online feature “Tracking the Environmental and Social Impact of Patagonia Clothing and Apparel” from the drawing board to the consumer. It’s not all pretty, and Patagonia makes sure to note “The Good” and “The Bad” parts of its production cycles. It also spotlights the overseas companies they use to make their products and some of their trademarked fabric technologies. One of the biggest qualms the company seems to have is that many of its materials can’t be recycled; recyclability is the company’s next big pursuit.
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