Patagonia & Organizational Potential
In previous posts we have outlined the first two of our three measures of potential: Leadership and Team Potential. We provided examples of organizations who have expertly harnessed these measures such as Glint and Adobe. Today we turn the focus on the third and final pillar of this system: Organizational Potential.
Organizational Potential measures the extent to which a businesses structure, strategy and foundational values harness the 7 core energies (Foundation, Mindsets, Authenticity, Relationships, Communication, Strategic-Thinking and Consciousness). Ultimately this should foster a conscious culture.
In order to fully harness Organizational Potential your business must have:
An effective business strategy
Well thought-out policies, procedures and processes
Foundational elements such as purpose, mission, vision and values that make sense for your business
One business that has expertly harnessed Organizational Potential is Patagonia.
Patagonia is a U.S. based outdoor apparel brand which is based out of Ventura, California where it’s company founder Yvon Chouinard originally founded the company back in 1973. The company originally focused on outdoor apparel pertaining to mountain climbing as Chouinard himself was a mountain climber who “got his start as a climber in 1953 as a 14-year-old member of the Southern California Falconry Club. One of the adult leaders, Don Prentice, taught the boys how to rappel down the cliffs to the falcon aeries. This simple lesson sparked a lifelong love of rock climbing in Yvon”. However over the years it has expanded its efforts to outdoor apparel categories such as surfing, trail running, mountain biking, fly fishing, kite surfing, and winter sports.
Patagonia, it’s Foundational Values and Commitment to the Environment
One of the core tenets of Organizational Potential is foundational values and how that organization lives by those values.
Patagonia’s foundational values are deeply rooted in environmental activism. This is present in its initiatives, advertising and more. These values have been a part of the company since the beginning.
Many of these values were either drafted by or based on the beliefs of the company’s founder Yvon Chouinard.
In the 1950’s Chouinard worked as a blacksmith, which allowed him to get by financially selling the pitons that he forged. As the 1960’s rolled around he began making climbing tools and in 1965 founded Chouinard Equipment with his business partner Tom Frost. The company became very successful but the two men were confronted with the environmental impacts of their success. This excerpt from the company’s website outlines this epiphany – one that they consider to be the beginning of their commitment to the environment “ By 1970, Chouinard Equipment had become the largest supplier of climbing hardware in the United States. It had also become an environmental villain because its gear was damaging the rock. The same fragile cracks had to endure repeated hammering of pitons during both placement and removal, and the disfiguring was severe. Chouinard and Frost decided to minimize the piton business. This was to be the first big environmental step we would take over the years”. This sparked an awareness within Patagonia of the environmental impact of their decisions. The following years featured the creation of many initiatives related to environmental activism which gave Patagonia the reputation that it has today.
This work led to the creation of the following pledges and programs that are at the core of Patagonia’s commitment to the environment and how they do business:
The Ironclad Guarantee
“We guarantee everything that we make”
Patagonia has placed a heavy emphasis on durability because as they put it “we know prioritizing durability results in consuming less energy, wasting less water and creating less trash”. This pledge indicates that Patagonia stands by its products and is evident of a commitment to reducing waste.
“Know where your clothes are made”
Patagonia believes that it truly is important that you know where your clothes come from. They are only the things that you wear on your body after all. This pledge aims to cultivate a customer base that is informed and environmentally conscious. The “Informed Customer” is an initiative present throughout Patagonia’s brand materials and communication. This tells us the type of relationship that Patagonia wishes to cultivate with its customers.
“Keep your gear in play”
In recent years the idea of products having a planned expiry date is something that many consumers have accepted as the norm. Patagonia doesn’t share this mindset. They have created an initiative that it calls “Worn Wear” where customers can return Patagonia items that are in good condition for store credit, buy used items and repair their broken items. This is with the aim of reducing waste that can be harmful to the environment.
1% for the Planet
”We give back for every sale”
There is a corporation or two out there who do not necessarily like the idea of paying their share in taxes. Patagonia is not one of those, so much so that they are charging themselves 1% of all product sales which is then given to programs and initiatives that aid in the “preservation and restoration of the natural environment”. This program is in partnership with a non-profit called “1% for the Environment”. The organization has signed on countless brands such as Patagonia, Boxed Water and Peak Design, among others. This pledge shows that Patagonia is willing to put its money where its mouth is and is involved in collaborating with like minded organizations who have the same environmental goals.
Patagonia has created channels to allow their customers to get involved in this necessary work, a program it has aptly named “Get Involved”. Patagonia states that this initiative” connects skilled volunteers with grassroots groups that are tackling the most pressing environmental issues we face today”. This program connects with organizations and individuals — the Patagonia website allows visitors to get involved with a click of a button.
Patagonia’s website also includes a comprehensive search function that will connect you with various activist groups depending on the specific cause and your location. A search in Los Angeles, California for instance for Climate Action groups turns up results such as Communities for a Better Environment, SoCal 350 Climate Action, Coalition for Clean Air, One Earth and Climate First.
Patagonia has further harnessed Organization Potential by developing a strategy that is rooted in its foundational values and environmental activism. The choice to double down on these efforts to the extent that it has is strategy, good strategy at that. This strategy aims to prove to its customers that they are truly committed to environmental impact.
Patagonia does this through initiatives such as their “Worn Wear” program which allows customers to trade-in their Patagonia items that are in good condition, buy used and repair damaged products — with the goal being to reduce waste. This flies in the face of what one would perceive to be an effective business strategy for a company that intends to make a profit — as Patagonia is actively discouraging customers from purchasing new Patagonia products. For instance the brand launched an ad campaign in 2012 titled “Don’t Buy This Jacket”. Patagonia’s partnership with non-profit “1% for the Planet” is another terrific example of this.
These elements make up Patagonia’s strategy of proving its mettle when it comes to its commitment to the environment. In his book “Start With Why” leadership expert Simon Sinek describes how organizations who know exactly why they do what they do will foster a more loyal customer base than those who simply know what they do (i.e. what they sell, the products or services they offer). Sinek in this book is essentially describing purpose led organizations. Patagonia’s strategy indicates that they are an organization who has a thorough understanding of their why and what their purpose is as an organization.
Patagonia’s Internal Culture, Processes and Procedures
Patagonia has shown externally to be a terrific example of harnessing Organizational Potential through its well defined foundational values that put emphasis on environmental activism. However how a company functions internally is just as important to Organizational Potential. A business who has strong values that it positions internally will see that these are evident externally as well. How well does Patagonia do this? Quite well.
Below you will find some examples of processes that define Patagonia’s culture and how they have harnessed Organizational Potential.
Patagonia’s Philosophy for Workplace Culture
Patagonia wishes to enable specific behaviours for the benefit of the individuals within the organization, the organization as a whole and ultimately the end customer. The idea of “treating work as play” is integral to the Patagonia internal culture. On the company’s website they explain it in these terms “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”.
The Hiring Process
Patagonia seeks out those who are aligned with their lifestyle and line of products. This ideal candidate is likely a mountain climber and is someone who is a Patagonia product user. Patagonia’s way of finding suitable candidates is not like other companies. The company states they put it they do not take out ads in the Wall Street Journal, attend job fairs or utilize corporate headhunters. They opt to, as they put it “seek out people through an informal network of friends, colleagues, and business associates”.
Patagonia: An excellent example of Organizational Potential
We feel that Patagonia is an excellent example of a company that has harnessed Organizational Potential. Its foundational values are well defined and present a company that knows exactly why it does what it does. It follows through on its foundational values and commitments through a series of initiatives such as “Worn Wear” and “1% for the Planet”. Both its strategy and internal culture are aligned with this as well. Any business looking to unlock the fundamentals of Organizational Potential should look no further than Patagonia.
Investopedia.com - https://www.investopedia.com/articles/personal-finance/070715/success-patagonias-marketing-strategy.asp
LinkedIn Talent Blog - https://www.linkedin.com/business/talent/blog/talent-connect/ways-patagonia-built-ridiculous-culture
7 Chakras of Business