Patagonia’s Yvon Chouinard Shows Brands they Don’t Have to Buy into the Usual Growth Path Story


Patagonia_Don't Buy This jacket
Patagonia greeted the day with a counter intuitive message: “Don't Buy This Jacket.”# It was Cyber Monday 2011, yet it wasn't the first time Yvon Chouinard engaged in a decisive move.

Six years earlier, the business leader published a book, Let My People Go Surfing, where he recounted his personal story, how he created Patagonia, and the philosophy he uses to run the company.

In the book, as in this talk at University of California#, he discusses how he has tried to minimize Patagonia's impact on the environment by making fleece clothing from recycled soda bottles, for example.

He talks about his One Percent for the Planet plan in which participating businesses contribute at least 1% of their net annual sales to groups on a list of researched and approved environmental organizations.

And he talks about how in 1991, after a sudden slowdown following years of overambitious growth Patagonia's credit was cut off (in the video, Chouinard says his accountant introduced him to a mafia guy who offered to lend at 28 percent interest) forcing layoffs for the first time (one fifth of the workforce, 120 people), at which point he decided to introduce a more systemic transformation to the company.

Instead of selling or making even more drastic workforce reduction decisions, he

[…] decided the best thing I could do was to get profitable again, live a more examined corporate life and influence other companies to do the same.

To put his actions where his beliefs were, and still does. By aligning his business with his core truth and story, Chouinard cleared his books of debt and chooses responsible growth, thus running the the company debt-free from that moment forward.

Of fish wheels and dip nets

As the WSJ online reports#, after a talk at a sustainable-fisheries conference in Vancouver in 2010, Chouinard launched a salmon fishery to show the industry how to to minimize environmental impact, and still make a profit.

Teach a company how to fish, and you set it up for sustainable success.

And teaching is exactly what the legendary climber, dubbed reluctant businessman, has been doing. He has the ear of large organizations like Walmart and mainstream brands like Levi Strauss — both companies embraced efforts to set data-driven benchmarks for improving environmental practices.

By not getting caught in the growth-at-any-cost net, organizations can have it all. Examining more closely how they make and package products, for example, they can have happier, thus more productive, workers, save on consumption, and make products customers are eager to buy.

Lifetime Value of Brand to a Customer

Many companies measure the lifetime value of a customer. How many look at the lifetime value of their brand to a customer? How much is your brand worth to a fan? We have moved beyond the traditional sales process.

From the fully dualistic buyer and
seller, we are now witnessing the dissolution of the traditional
sales role, as recommendation commerce evolves and store-fronts become
wherever you happen to be, doing whatever you are doing.

Which brings us
to the Storeless Store and Saleless Sale# . The next stage of this exciting market transformation is happening now — both businesses and customers are on a level playing field in terms of value exchange. Some of the value is monetary, some of it is intrinsic or other, like attention, time, evangelism, commitment, etc.

The organizational maturity level will determine whether the technology put in place and used to manage relationships is recast into the systems used to collaborate with those relationships.

The future of growth is already here

Just unevenly distributed. One way organizations have to take control of their promises is to reach out from beyond the shop floor and start to close the brand dissonance.

It's more easily done when not subjected to the ebb and flow of sentimental share prices. Choosing instead the stock and flow of principles and trade.

The reason why Chouinard never wants Patagonia to go public is that he doesn't want to lever the company up in search of rapid growth, as it mistakenly did before. Right now, for a ticket to sail on the winds of trade he is betting on becoming a benefit corporation.

Years have passed since Patagonia's overambitious (and unsustainable) growth trajectory, yet businesses keep getting on the same unforgiving return-to-debt path — rise to prominence quickly, raise millions, get valued at ridiculous amounts and you just bob up and down.

To be truly Fab# would mean to get with Chouinard's motto: when you feel dissatisfied with the way a thing is made, make one yourself. He has demonstrated brands don't have to buy into the usual growth path story.

 

+++

Valeria is an experienced listener. She designs service and product experiences to help businesses rediscover
the value of promises and its effect on relationships and
culture
. She is also frequent speaker at
conferences and companies on a variety of topics. Book her to speak here.


Leave a Reply

Your email address will not be published. Required fields are marked *