Patagonia

Yvon Chouinard spent the better part of his 20s roaming around North America and the Alps, climbing mountains, and hanging out with his friends. He slept under the stars for over 200 nights a year and lived on less than a dollar day eating discounted cans of cat food mixed with ground squirrel that he had trapped. It was only out of the need to support his own climbing habit that Yvon decided to start his own business. A self-taught blacksmith, he made climbing gear from materials salvaged at junkyards and then sold them from the trunk of his car during his travels.

While on a trip to Scotland, Yvon was inspired by a colorful rugby shirt that he found durable enough to withstand the rigors of climbing. Seeing that there were no colorful, fashionable climbing clothes in the US, he taught himself how to make clothing patterns—and with that, Patagonia was born.

Industry

Apparel

Founded

1973

Purpose

Cause

Take only what nature can replace and leave no environmental footprint behind

Values

Create values that 'reflect those of a business started by a band of climbers and surfers, and the minimalist style they promote'

  • Build the best product so that it lasts for generations or it can be recycled to remain in use.
  • Cause no unnecessary harm.
  • Use business to protect nature.
  • Develop new ways to do things and do not be bound by convention.
Personality

The activist explorer

These free-thinking explorers are dirtbags who seek adventure, self-discovery, and a simple life. They love to spend as much time as possible in the mountains or the wild and feel more at home in a base camp or on the river than they do in an office. They have a deep respect for the environment and passionately fight to preserve the world around them.

Tone of Voice

Joyful, passionate, and inspirational

As Founder Yvon Chouinard best describes it, "Patagonia's image is a human voice. It expresses the joy of people who love the world, who are passionate about their beliefs, and who want to influence the future. It is not processed; it won't compromise its humanity. This means it will offend, and it will inspire."

And whether they are writing personal stories that illustrate their values, argue ideas, or promote a cause; or descriptive copy that sells products, their style remains simple and focused: Be accurate, avoid appealing to vanity, greed, or guilt, and write as though they are the customers.

Focus

Differentiators

High-quality

With an Ironclad Guarantee on each product, Patagonia defines quality as being:

  • Durable: Their Stand Up® shorts were named that for a reason. Every product needs to be tough enough to face the harshest conditions. Clothing that needs to be treated delicately or that shrinks and degrades overtime has diminished value and is not worth making.
  • Repairable: Every piece of a product, including zippers, needs to be easily replaceable to lengthen its lifespan.
  • Multi-functional: Every product needs to have multiple uses so that consumers can own fewer, nicer things.
  • Easy to maintain: Clothing shouldn't need to be ironed or dry cleaned. All that should be needed is some water, soap, and a bucket or a sink.
  • Authentic: When a product says it is for rugby, it actually means you can play rugby in it.

Conservation

Patagonia doesn't use the term sustainable, as it implies business can continue on indefinitely—when in fact, it cannot if they are taking more from the planet than they are putting in. Instead, Patagonia uses the term responsible because it implies agency and forces them to acknowledge their impact on the world.

Whether it is using recycled fibers or making replaceable zippers, Patagonia makes all decisions through the lens of reducing their environmental footprint. To avoid their clothes from ever ending up in a landfill, they:

Customers

Dirtbags

Patagonia's core customers are dirtbags who seek to deepen and simplify their lives, not junk them up. They are free-thinking adventurers who might "organize an impromptu game of hacky sack in the middle of an El Capitan ascent, casually enjoy a bottle of beer while free soloing a sheer face on Mount Arapiles, or hitchhike outside Tahoe holding a cardboard sign reading 'Will belay for food!'" They are intelligent, choose performance over style, don't shop as entertainment, and are not out to buy a life.

Trade-offs

Stop selling popular products that conflict with your cause

Even though Patagonia was the leading manufacturer of pitons, the brand stopped selling them once they realized the damage the product was having on the environment. Patagonia instead started selling a new unfamiliar climbing tool called chocks. To educate their customer-base, their next catalog opened with an editorial on the environmental hazards of pitons and detailed a climb that Patagonia team members made using only chocks. Within a few months of the catalog's mailing the global piton business atrophied and chocks were selling faster than they could be made.

Don't offer inexpensive product lines to expand your customer reach

Even though offering a cheaper product line would bring Patagonia into new markets, it would also lead to people consuming more than they need. As Patagonia sees it, a higher price point makes people think more about every purchase they make.

This decision has been advantageous for the brand even in times of recession as people become less frivolous about their purchases. As founder Yvon Chouinard writes: "[People] don't mind paying more for goods that won't go out of style and are of such quality that they will last a long time."

Say no to capital investment in order to follow your purpose

Patagonia refuses to be a publicly traded company or to accept outside investments of any kind. This allows them to run their business without any pressure to abandon or compromise their purpose.

Give up $1 billion of sales in order to be more sustainable

For years Patagonia's co-branded vests were extremely popular amongst investment and tech companies on Wall Street and in the Silicon Valley. However, Patagonia put an end to these partnerships after deciding that non-removable co-branded logos greatly reduced the longevity of the garment. Bloomberg estimated that this decision cost Patagonia nearly $1 billion in 2019.

Don't sell your products in large chains and department stores

Patagonia has no interest in selling their apparel to department stores or to the giant sporting good chains. With so many outdoor brands having "similar looking products, made from the same materials, sewn in the same factories, and with similar performance," these larger stores can't really afford to carry any one brand in depth or educate their customers on the differences between the options.

Instead, Patagonia prefers to have their products in smaller specialty shops that only carry a few select brands. In these smaller stores, employees are better at guiding and sharing knowledge with customers so that they understand the difference between "quality and crap" products.

Spend money on improving quality, not advertising

As Yvon Chouinard writes: "Our charter is to inspire and educate rather than to promote...We don't force our growth by stepping out of the specialty outdoor market and trying to be who we aren't. We would rather earn credibility than buy it."

With an advertising budget of .05% of sales, Patagonia says no to advertising with businesses like Vanity Fair and GQ, and also doesn't create fancy press kits or host elaborate press parties. Patagonia has found that the most effective ways to get their message out is through customer word-of-mouth and genuine (unpaid) favorable attention from the press.

Operations

Expand into completely new industries that align with your purpose

Although they are best known for their clothing line, Patagonia has never limited themselves to only one industry.  Instead, they expand their business based on the positive impact it could make on the environment.

  • First, they began as a blacksmithing company making reusable climbing tools that protected the environment.
  • Next, they entered the clothing industry with a focus on creating durable clothing that would stay out of landfills.
  • Then, they started a book and film division focused on educating people about environmental issues.
  • Now, Patagonia's future lies in regenerative and restorative agriculture with Patagonia Provisions.

With each expansion, Patagonia is always asked "What do a bunch of climbers know about this?" or "What does a clothing company know about that?" And their answer is always "nothing," but if it helps save the planet, they will commit to it 100%.

Support social causes that align with your mission

There is no question to Patagonia's commitment to their mission. In their history, they:

However, what makes them so purpose-focused is that they see everything in the world through the lens of environmental conservation. Their support of Planned Parenthood comes from the viewpoint that the non-profit is working towards "the single greatest cause of environmental problems: overpopulation."

Change the entire way your business runs if it doesn't align with your values

When Patagonia realized that the conventional cotton production process was creating severe environmental and health issues, they abandoned the process completely for an organic cotton supply chain. At the time though, Patagonia had no idea how to do this, but because it was the right thing to do, they created an organic supply chain on their own. Within eighteen months, they completely reengineered their operations and were able to:

  • Remove all toxic dyes, which meant saying goodbye to the color orange for a while until they could find an environmentally safe replacement.
  • Make sure that all cotton fibers were certified and could be traced back to the bale.
  • Make their farmers use regenerative growing practices.
  • Make their ginners and spinners clean their equipment before running any Patagonia products, no matter how small the quantity.

Grow strong, not fat

In the late 80s, Patagonia was growing fast—50% a year fast. They started opening more locations and increasing their inventory production. But after the 1991 recession, dealers started cancelling orders and inventory began to build. Patagonia now had too many people with too little work being overseen by too many layers of management. With an inflated product line, they also had neglected to take into account the cost of having to design, produce, warehouse, and catalog all these products.

After almost losing the business because of this, Founder Yvon Chouinard decided to change their growth mindset from growing fat to growing strong. Patagonia began looking at their business as if they were going to be around for the next 100 years having to take responsibility for the decisions they made today.

As a result, Patagonia stopped looking at quarterly earnings and setting yearly growth projections. "One year we will grow 3% another year we will grow 20%," Yvon explains—and he is okay with that. Patagonia now chooses to wait for the customer to tell them how much product to make. Slow or no growth just means that profits have to come from "being more efficient with operations and living within [brand's] means."

Patagonia also now knows exactly how many people they need to hire if they want to add just one product to their line.

Choose values over higher margins

When changing their operational structure from conventional to organic cotton farming, Patagonia wanted to understand what impact this higher operational cost would have on sales. Through customer surveys, Patagonia found that quality was the most significant reason that customers bought from them. Brand name and price were secondary, while environmental concerns were last.

Understanding this customer perspective gave Patagonia some room to raise prices slightly, but to keep prices from exceeding two to ten dollars over conventional cotton cost, they reduced their margins in partner retail spaces. Products that could not meet the margin goal were limited to Patagonia's own retail stores and mail-order channels to keep prices down.

Cannibalize your newest products to maintain the highest quality

When focusing on quality, there will come a day when you look at a current product and say 'I can do better.' For Patagonia, that day came only a few months after their new environmentally-friendly chocks came to market.

Having received feedback from fellow climbers that there may be a better way to make them, Patagonia had a choice: 1) Give their working new chocks their day in the sun knowing that quality could be improved or; 2) Start again...immediately.

True to their values, they scrapped all of their tooling, invested in all new designs, and came out with a new modernized chock. Coincidentally, that very same month a competitor came out with an exact copy of Patagonia's old and now very obsolete chock design.

Test, test, and test again

Patagonia tests every product out in the field until something fails. They then strengthen that part, test again until something else fails then strengthen that part. They repeat this process ad nauseam until the product is durable as a whole.

Top climbers, surfers, and endurance athletes are also provided gear and sometimes salaries and benefits "to wear [Patagonia] clothes, in order to give...feedback and help with design issues." Patagonia even does a "quick and dirty" test of competitor products to see if any of their ideas are worth pursuing.

Choose concurrent manufacturing over assembly-line manufacturing

Too often a company will hand their designs over to a production team without understanding the full development process upfront. This assembly-line style can lead to the production team changing design elements to meet production requirements and the sewing team altering construction to meet their own practices. Patagonia has found that by all teams working together upfront to set standards, the product's purpose, process, and intended performance are never jeopardized.

Always spot check for quality when you set up manufacturing for the first time

As Yvon Chouinard puts it: "If a button falls off in your customer's hand as she pulls the pants out of the washing machine..[she] will never again fully trust your claim to quality."

Patagonia has suffered through every stage of trying to find the best place to spot check for quality—at the factory level, at the sewing machine level, and also just before the sewing machine level. What they found was that if you take "extraordinary steps to set up the manufacturing correctly the first time, it is much cheaper than taking extraordinary steps down the line."

Ensure that the values of your vendors align with your own

As a brand that relies on outside vendors to make their apparel, it has never made sense for Patagonia to use the same vendors that sew shorts for Walmart one day and for Patagonia the next—the quality and attention to detail just cannot be trusted. Instead, Patagonia looks for partners that meet their "4-fold" set of standards: Business, quality, environmental, and social standards.

"We audit potential partners to determine how they manage workers, we interview workers to determine their perspective on the factory, and we engage Civil Society to verify that the factory has positive employment record," writes Yvon Chouinard. If they find a partner that meets their standards, but does not have a strong company culture, Patagonia will send people to train the vendor's HR team, so that both cultures align.

Have as few suppliers and contractors as possible

It might sound risky, but Patagonia prefers to be dependent on just a few suppliers that are, in return, dependent on them. Patagonia considers this a "true partnership." Founder Yvon Chouinard describes this strategy like this: "Our potential success is linked. We become like friends, family, mutually selfish business partners; what's good for them is good for us."

Don't measure your messaging against sales revenue

Patagonia wants to keep their messaging efforts simple: Share who they are, their values, their outdoor pursuits, and their passions. When it comes to measuring the value of that messaging, they don't even consider trying to conduct a square inch sales analysis of their catalog. They consider this analysis to be irrelevant and could create a culture focused on profits over purpose.

Culture

Philosophy

Let them be the humans you hired

Founder Yvon Chouinard set out to create a culture at Patagonia where employees had the flexibility to surf, ski, or explore. He felt it would be cruel to hire people who love the outdoors and then keep them in front of a screen all day. It would also be impossible to make the best outdoor clothing with an 'indoor' culture.

His goal was to blur the distinction between work, play, and family. It didn't matter when you work as long as the job gets done with no negative impact to others. In Patagonia's employee handbook, Let My People Go Surfing, he even encourages employees to drop work and get outside when the surf comes up. Yvon believed that work needed to be enjoyable on a daily basis, where you "come to work on the balls of [your] feet and go up the stairs two steps at a time. We needed to be surrounded by friends who could dress whatever way they wanted, even be barefoot."

Leadership

Empower, don't manage

In the words of Patagonia's founder, Yvon Chouinard: "I heard a great thing on NPR about this woman at Stanford who studies ants, and she said, 'Ant colonies don't have have bosses and everyone knows what their job is, and they get their job done.' Compare that with companies that are top-down management and it takes a tremendous amount of effort to run those...What we decided to do is just hire motivated young independent people and leave them alone."

Chouinard himself takes 5 months off every year, during which he is unreachable. “If the warehouse burns down. Don't call me. I don't know what to do. You know what to do.”

Embrace purpose-driven change and your employees will too

"When there is no crisis, the wise leader or CEO will invent one. Not by crying wolf but by challenging the employees with change." — Patagonia Founder Yvon Chouinard

There was no playbook to follow when Patagonia decided to change from using traditional to organically grown cotton. Yvon just knew that the change had to happen after seeing the pollution caused by traditional cotton production. Giving the company only 18 months to make the transition, employees mobilized, united together, and were able to successfully rework the entire production line within the given time.

Understand that your leadership choices (even the small ones) send a message

Patagonia's founder, Yvon Chouinard, has made it a point that he and his wife always pay for their own lunches in the cafeteria. A subtle point, but as Yvon sees it: "Otherwise it would send a message to the employees that it's okay to take from the company."

Change leadership based on your company needs

Seven CEOs in its first forty years of busines may sound disruptive and unsettling to a culture but not to Patagonia. Depending on what challenges Patagonia faces at the time determines if a new CEO is needed. Founder Yvon Chouinard explains that "the 'shoot-from-the-hip' turnaround around artist you hire to downsize your company may not be the CEO you need to run things after the company has stabilized."

Atmosphere

Decrease dividers, increase collaboration

Open floor plans, no private offices, and rooms with no doors or separators—this is how Patagonia strengthens communication, makes management more approachable, and provides an atmosphere of equality. As Yvon Chouinard writes: "What we lose in 'quiet thinking space' is more than made up for with better communication and an egalitarian atmosphere."

Keep teams small to promote personal responsibility

In each of their offices, Patagonia keeps their employee count to one hundred people, no more. This policy is based on the idea that democracy seems to work best in small societies, where people have a sense of personal responsibility.

Signal to your employees what type of hours they are expected to work

In order to discourage late nights at the office, Patagonia closes their child development center at 5pm and locks their offices with everybody out at 8. There is also no access to their buildings on the weekends. This is Patagonia's signal to their staff that more face time at the office is not highly rewarded and for staff to make their time at work more focused and productive.

Practices

Don't compromise your culture during tough times

“Culture matters. And you know when it matters most? When you stick to it in the great times and the challenging times."—Dean Carter, Patagonia's Chief Human Resources Officer at Talent Connect 2019

Even through difficult recessions, Patagonia refuses to cut back on quality, sustainability practices, healthcare, onsite childcare, training, or development. If they do face challenges, Patagonia's policy is to:

  • First cut the fat by freezing hiring, reducing unnecessary travel, and generally trimming expenses.
  • Eliminate bonuses and reduce salaries of all top-level managers and owners if problems escalate.
  • Then shorten the workweek and reduce pay.
  • Lastly, and only as a last resort, lay people off.

Have your Chief Human Resources Officer conduct exit interviews

With only a 4% turnover rate and nearly 100% of new mom's returning to work, it's not surprising that Dean Carter, Chief Human Resources Officer, calls Patagonia Hotel California. But he doesn't take these stats for granted.

When someone does choose to leave, he personally gives each exit interview to symbolize what each employee means to the company. The first question he asks is not "Why you are leaving?" but "Why did you join?" The most heartbreaking exit interviews to him are the ones where he's told that the experience they signed up for was not the experience they received.

Provide benefits that encourage community activism

With a workforce committed to saving the planet, Patagonia provides opportunities for their employees to take an active role in protecting the environment. 

  • After their first year of employment, employees are allowed to take two months off with pay, to volunteer with environmental activist groups anywhere in the world.
  • Patagonia offices are closed on days when there are environmental rallies or protests in the area so employees can participate.
  • If an employee or spouse is arrested while peacefully protesting for the environment, Patagonia will pay for both of their bails.

Reshape your work week to align with your employees' lifestyles

If you want your company's culture to support your employees' lifestyles, adjustments to your work schedule will need to be made. Patagonia introduced a 9/80 work schedule giving employees a three-day weekend every other week to allow for longer weekend getaways to climb, hike, and explore. This schedule also gives them time to go to the doctor as well.

Blur the line between work and family

With an onsite childcare facility, Patagonia's employees are able to eat with their children at lunch, put them down for naps, and even bring their newborns to meetings. But the idea to blend work and family time together didn't happen all at once. It began in 1983 when Founder Yvon Chouinard's wife brought a trailer truck to the office to allow a mother to breastfeed her colicky baby. From there, family benefits have grown to include:

  • A subsidized onsite childcare center for children up to nine years old. This educational facility has certified teachers, bilingual programs and, of course, rock climbing and surf lessons.
  • 16 weeks of fully paid maternity leave and 12 weeks of fully paid paternity leave
  • A budget for nursing moms to bring their babies and nannies along on business trips

Patagonia estimates that they recoup 91% of the annual $1 million childcare budget through federal tax credits, productivity, and employee retention. There is also equity in pay and in leadership across the company, with women making up 50% of the workforce and roughly 50% of upper-management.

As an added bonus, the presence of children keeps the company atmosphere more familial than corporate. "Even for the people who don't have kids, you bring your best self to work around children."

Provide benefits that reinforce your values and personality

While Patagonia's benefits are generous, they are also strategically designed to attract serious athletes and environmentalists. They offer:

  • Comprehensive health insurance, even to part-time employees, so that if they get hurt while climbing or surfing they can properly heal themselves
  • An organic cafeteria that serves healthy, organic, and mostly vegetarian food
  • Showers on site for after their afternoon surf
  • Free yoga classes, scooters, surfboards, and skateboards for on- and off-site fun

They even give the best parking spots to those with the most fuel-efficient cars, not to managers.

Recruitment

Read resumes from the bottom up

At Patagonia, culture comes first. Skills can be learned but it is almost impossible to teach a "dyed-in-the-wool" businessperson to love the outdoors.

To find the right people, Patagonia hiring managers first go to the part of the resume that lists interests, activities, and volunteer work. No matter how qualified the person is, if they don't have interests that align with the brand's personality and culture or show a passion for something outside of themselves, the candidate is not selected.

Warning: If you are selected to come in for an interview, out of the 9,000 applications they receive per position, don't be surprised if you are given a surfboard and a suit to catch some waves before it begins.

Experience

Driver

Create a deeper, less distracted experience of the world and its wild places

Alpinism is at the heart of Patagonia as they strive to honor the silent sports that don't require a motor or a cheering crowd. It is in these sports, that fulfillment comes from moments of connection between the human spirit and nature. At Patagonia, each product is meant to enable you to explore wild places and embrace simplicity.

"The rock climber becomes a master when he can leave his big wall gear at the base, when he so perfects his skill that he can climb the wall free, relying on his skill and the features of the rock." —  Founder Yvon Chouinard

Product

Never chase fashion trends

"Fashion is happening only now, and art is timeless. When I think about clothing as art, I imagine a Navajo Indian blanket coat worn by an eighty-year old woman. She could have bought the coat in 1950 or it could have once belonged to her mother...When we give in to fashion trends, you doom clothes to the trash heap." —  Founder Yvon Chouinard

Patagonia rarely buys off the shelf fabrics or existing prints. They work with artists and design studios to produce original art while refusing to be pressured by the "fashion race." Quality takes time and Patagonia is willing to move at a turtle's pace and miss fads if it means beautiful, durable, and eco-friendly products.

Design your products for your core customers

Even though Patagonia's success has come from a different type of customer, Patagonia always puts the purpose of the product ahead of style:

  • On the first iteration of jackets, pockets are not included if they will get in the way of a climber's harness.
  • Sizes are determined by how the garment is meant to be used. If its purpose is to be worn over other layers or against the skin, a Medium may be smaller or bigger from one product to another. People who want to wear it for fashion will just have to scale up or down in size.
Service

Wait on the customer for as long as it takes

Patagonia's philosophy on service is simple:
Picture an old fashioned hardware store owner who knows his tools and how to use them. He will wait on you until you find the right tool for the job educating you and helping you all along the way without rushing you.

Stay true to your promise

Patagonia's guarantee on their clothing never expires. Besides repairing and replacing products and refunding customers at any time, they have even remade retired products for customers as well.

Once a customer returned a pair of pants hoping that she could get them repaired. Unfortunately, the pants were beyond repair and were mistakenly discarded without her approval. Since Patagonia keeps an archive of nearly every fabric and trim they have ever used, the customer soon had her old pants back, but now they were brand new.

Setting

Make your retail space a showroom for what's relevant, not what's expensive

Patagonia displays products in their stores as if it were a showroom by focusing on simplicity and function. They do not waste expensive retail space with extra inventory—any backstock is kept in the back or a nearby stock room.

By placing the products front and center, Patagonia takes the "tedious hunting experience out of shopping...highlighting each product's function without jeopardizing the retail environment." And the items they do highlight are not always the most expensive but instead the most relevant for the season.

Provide full operational transparency on your website

Everything Patagonia makes has an impact on the planet, and they want to make sure you understand that cost. Each product has a detailed description of how and where it was made providing you full transparency around the manufacturing process, including factory photos, details, and maps.

Messaging

Create the anti-advertisement

While Patagonia is in the business to make and sell products, part of their mission is to inspire and implement solutions to the environmental crisis. On Black Friday 2012, the biggest shopping day of the year, Patagonia pushed their mission forward by taking out a full-page ad in the New York Times that encouraged customers to only buy what they need with the tagline: Don't Buy This Jacket.

Don't Buy This Jacket

Be willing to offend

Hidden beneath the tag of Patagonia's Regenerative Organic Stand-Up Shorts reads a message: Vote the Assholes Out. While the tag was printed in 2020, the saying had been used within the Patagonia culture for years as a way to encourage people to vote climate-change deniers out of office. After the phrase was used by Founder Yvon Chouinard in a letter to a non-profit, that was all the approval the design team needed to add it to the shorts.

Vote the Assholes Out

Use honest imagery to show who your core customers are and what they do

For Patagonia, imagery is not about taking photos of beautiful models backpacking the Appalachian Trail on an autumn day—that is too safe. They also don't set up staged shots of non-customers wearing Patagonia gear—that would be dishonest.

Instead, Patagonia's imagery focuses on capturing real people doing real things. Picture a climber "picnicking on the hood of a rusted Chevy at the base of a climb" or a "euphoric skier rising from a face plant." That's the imagery Patagonia wants, and in order to capture that, they use photos of their actual customers taken by actual customers (or their customers' photographers in the image below).

Patagonia's flying baby

Greg Epperson's The Flying Baby

Create a consistent story across all channels

Considered the 'bible' for each selling season, Patagonia's catalog sets all editorial and pictorial standards for their website, hashtags, signage, and videos.

Choose a brand name that embodies your adventurous spirit

Founder Yvon Chouinard fell in love with Patagonia in Argentina and wanted to make clothing for those types of conditions: Super high winds with crazy cold temperatures. He also wanted to inspire “romantic visions of glaciers tumbling into fjords, jagged windswept peaks, gauchos, and condors.”