Learning from Patagonia’s Yvon Chouinard

“In owning our retail stores, we’ve learned that it is far more profitable to turn that inventory more quickly than to have high margins or raise prices.”

Part of Patagonia’s authenticity lies in not being concerned about having an image in the first place. Without a formula, the only way to sustain an image is to live up to it. Our image is a direct reflection of who we are and what we believe.”

The catalog is our bible for each selling season. Every other medium we use to tell our story – from the website, to hangtags, to retail displays, to press releases to videos.”

“If we come out with a product that is difficult to promote, it’s probably because it’s no different than anyone else’s and we probably shouldn’t be making it.”

“We have three general guidelines for all promotional efforts: 1) Our charter is to inspire and educate rather than to promote, 2) We would rather earn credibility than buy it. The best resources for us are the word-of-mouth recommendation from a friend or favourable comment in the press, 3) We advertise only as a last resort and usually in sport-specific magazines.”

Advertising rates dead last as a credible source of information. Overall, we do far less advertising (usually less than 1 percent of sales) than most outdoor companies, let alone clothing companies.”

Value Employees

We provided a cafeteria that served healthy food where employees could gather throughout the day. And we opened an on-site childcare centre. At the time it was one of only 120 in the country; today there are more than 8,000.”

“If you care about having a company where employees treat work as play and regard themselves as ultimate customers for the products they produce, then you have to be careful whom you hire, treat them right, and train them to treat other people right.”

Our benefits package is generous but strategic. Each benefit makes good business sense for us. We offer comprehensive health insurance, even to part time employees, in order to attract serious athletes to work in our retail stores.”

Patagonia’s internship program allows employees to leave their jobs for up to two months to work for an environmental group and still receive their Patagonia paychecks and benefits.”

Hiring

It’s our first principle of hiring, that as many Patagonia employees as possible also be true Patagonia customers.”

We also seek core Patagonia product users, people who love to spend as much time as possible in the mountains or the wild.”

We’ll often take a risk on an itinerant rock climber that we wouldn’t on a run-of-the-mill MBA.”

Hiring people with diverse backgrounds brings in flexibility of thought and openness to new ways of doing things, as opposed to hiring clones from business schools who have been taught a codified way of doing business. A business that thrives on being different requires different types of people.”

As much as possible we hire from within, to keep the company culture strong. And then we train, and take the time to train, as though our future depended on it.”

We don’t want drones who will simply follow directions. We want the kind of employees who will question the wisdom of something they regard as a bad decision.”

“In a company as complex as ours, no one person has the answer to our problems, but each has a part of the solution.”

Walk The Floor

“In this information age it’s tempting for managers to manage from their desks, staring at their computer screens and sending out instructions, instead of managing by walking about and talking to people. The best managers are never at their desks yet can be easily found and approached by everyone reporting to them.”

Tone at the Top

The best leadership is by example. Malinda’s and my office space and the CEO’s is open to anyone, and we always try to be available. We don’t have special parking spaces for ourselves or any upper management; the best spaces are reserved for fuel efficient cars, no matter who owns them. Malinda and I pay for our own lunches in our cafeteria; otherwise it would send a message to the employees that its’s okay to take from the company.”

Decentralised & Smallness

“Systems in nature appear to us to be chaotic but in reality are very structured, just not in a top down decentralised way. Deborah Gordon, a professor at Stanford University who studies ant colonies, says that there is no specific ant in charge of a colony, no central control. Yet each ant knows what its job is, and ants communicate with one another by way of very simple interactions; altogether they produce a social network. A top down central system like a dictatorship takes an enormous amount of force and work to keep the hierarchy in power. Of course, all top-down systems eventually collapse, leaving the system in chaos.”

“I believe that for the best communication and to avoid bureaucracy, you should ideally have no more than a hundred people working in one location. This is an extension of the fact that a democracy seems to work best in small societies, where people have a sense of personal responsibility.”

“Hundreds of studies in factories and workplaces confirm that workers divided into small groups enjoy lower absenteeism, less sickness, higher productivity, greater social interaction, higher morale – most likely because the conditions allow them to engage what is best in being human, to share the meaning and fruits of their labour.”

Respect Customers

We treat customers with respect, too. We don’t farm out phone calls to a service bureau in Delhi.”

We have an ‘ironclad’ guarantee, and we honour it – even if we have to go to great lengths. We do know that the extra steps we take are worth it. Our catalog re-order rate from customers, season after season, far exceeds the mail-industry standard. In fact, it’s off the charts.”

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