The following is a conversation between Vincent Stanley, Director of Philosophy at Patagonia, and co-author of The Responsible Company: What We’ve Learned from Patagonia’s First 50 Years, and Denver Frederick, the Host of The Business of Giving.
Denver: Sustainability in business is not just a trend, it’s a crucial shift that challenges the traditional ways in which companies operate. Embracing sustainability is imperative both for the longevity of businesses and the health of our planet.
In navigating these challenging waters, the role of experienced, insightful leaders becomes indispensable. Today, you’ll hear from one such leader. He is Vincent Stanley, the Director of Philosophy at Patagonia, and co-author of The Responsible Company: What We’ve Learned from Patagonia’s First 50 Years.
Welcome to The Business of Giving, Vincent.
Vincent: Well, thanks for having me here.
Denver: I love your title. Tell us: What is the central job of a Director of Philosophy, and how has it shaped the narrative of the company?
Vincent: Well, I don’t know that it has shaped… I can tell you what the role is. I think that the company shaped the job. In the late ’80s and early ’90s; we really had a period of very strong growth. I’m not sure strong is the right word. It was wild growth, 30% to 40% a year, without really a strong sense of direction.
NGOs often talk about mission creep, but I think businesses have mission creep as well, in which they look at opportunities without really considering what the current strengths are, or what the purpose of the company is.
And at one point, I think Yvon thought, “Hey, I’m developing the kind of company that I have no desire to work for” and started to take employees… about 30 at a time… to places like Yosemite or Murray headlands and sit around outside in a circle and hash out: How is it we want to do business?
And we did that according to business functions, so the marketers went together… HR people, production, design, et cetera. And we came up with these eight business philosophies that actually 15 years later became the heart of : Let My People Go Surfing.
And I worked on these, not only because I was head of sales at that time. So I worked on my own group’s philosophy, but I also helped to edit the others and reproduced an internal document that later went into the book. Yvon used to teach classes on these philosophies to employees, and he stopped after a while. So when I came to the end of my functional responsibilities in 2014, what I wanted to do was to resume these classes.
And my idea was, I mean, one of the things I think that’s really marvelous about the company is we have so much written down. We have: Let My People Go Surfing. We have the first version of: Responsible Company. It’s really easy for our employees and our stakeholders to know what Patagonia is about, because we’ve told a consistent story for a long time.
But one of the things… concerns I had is: you want to make sure these are living documents. This is not just…this isn’t biblical.
Vincent: One of the questions I had was: How did these philosophies play out in the workday? How does it actually meet the road when people are doing their work? So I’ve been teaching these classes, seminar style, about 15 at a time, all over, anywhere where we have a presence for the last nine years.
Vincent: And then I also work a lot with graduate students that have a regular relationship with the Yale Center for Business and the Environment, and have also been an evangelist for the B Corp movement. So those are the three kinds of central elements of the job.
Denver: Well, you probably have time to write down these philosophies because if I’m correct, you’re not a surfer. So therefore, you can be…
Vincent: No, that’s right.
Denver: …you’ll be back in the office and pounding away on the…
Vincent: I’m not a surfer. And that was the key to my career advancement in the early days because when there were 10 of us… and the bookkeeper and I were the only non-surfers in the office. So I would answer the phone and take the dealer orders; got tapped on the shoulders. “Okay, you’re sales manager now.”
Denver: And I think Yvon said to you, “You’ll figure it out.”
Vincent: Yeah, exactly. “You’ll figure it out.”
Denver: Yeah. Yeah. Well, give us an example of one of these philosophies and also: How do people work them into their workday? Because so many organizations I speak to, Vincent, the philosophies exist… and they exist on a wall, but they’re not really brought into the day-to-day.
I mean, that is such a critical issue. How do you go about thinking about that? And give us an example of just one of these philosophies, so listeners will get a grasp.
Vincent: Well, I think the easiest one to talk about is the design philosophy, which really is not… It’s interesting because it’s not a series of dicta or demands. It’s 19 questions… started out as 19 questions. Is the product… Does it perform for its intended use? Is it durable? Is it versatile? That’s one key example.
In every… when we talked about finance, we talked about: Okay, we want to be a company that pays its bills on time. We want to be fiscally responsible. We do not want to be in debt to the banks except seasonally to cover the intake of inventory.
Another example would be our attitude toward marketing, which is essentially to treat customers as friends and equals. I think that’s because we came out of the climbing business. We always had a standard for catalog copy that had to meet journalistic standards. It couldn’t just be puffery. So those are examples.
And I think they play through for every different function of the company: This is how we want to do business. And I think what happens is because it was framed that way, rather than the company sort of imposing this on people, people in a situation where they’re trying to do it– the sort of the Patagonia way– consult these philosophies and say, Okay, how does this play out?
Vincent: I remember when we came up the first time with a mission statement, with an overall mission statement… and I’m a writer, and I was so skeptical, precisely for the reason you stated… that I saw mission statements as something that becomes a plaque on the wall. And after you apply the varnish, it’s never seen again. You close the door, so it isn’t seen.
But the first mission statement was: Build the best product; cause no unnecessary harm; Use business to inspire and implement solutions to the environmental crisis. And I remember when we developed that, I thought, Okay, I can live with this because I like “cause no unnecessary harm,” because it actually acknowledges that in the course of doing business, we pursue some extractive activities because we don’t know how to do differently.
For some of it, it wasn’t really true yet. At the time we adopted that mission statement, we hadn’t done a lot of the investigation that we’ve done since that enables us to go in and make improvements. But what I found was rather than this becoming some material for a hidden plaque on the wall that you never read, the employees took it to heart.
It was something that people would question: “Okay, how does this play out in my job? How do I apply this if I’m building a trade show booth? And does this mean I have to use recycled materials and make it recyclable at the end of its life?” Those are the kinds of questions I think that people would come up with. I use that as an example.
Denver: Yeah. Well, I mean, that’s a great accomplishment if you can have a mission statement that leads your people to ask questions as opposed to just passively saying or looking at it. And as you know, most people can’t repeat the mission statement of their organization. They all sound the same. Some about capacity building or a bunch of words like that, where you don’t know…
Denver: Yeah, you know…
Vincent: Striving and fostering.
Denver: And fostering. Oh, yeah…We like the public awareness. We want to raise public awareness, too.
In the book, you refer to the various pivotal instances in Patagonia’s history that altered our perception of what could be achieved, even when we weren’t aware of it happening. What an interesting statement. Could you provide an illustration of that?
Vincent: Yeah. I mean, I think that the poster child for that statement is when we accidentally discovered that conventionally-grown cotton was the most harmful fiber we make. And that was through a ventilation problem in a store we opened in Boston in 1988, and employees started to get sick.
We had to shut the store, call in an HVAC engineer. He solved the problem, gave us the bill, and we said, “Wait a minute! What was the agent that was making people sick?” He said, “Oh, that was formaldehyde off-gassing from the cotton clothes stored in your basement.”
And that led us to investigate the environmental implications of the major fibers we use, the four major fibers: polyester, nylon, wool and cotton. And it turned out that cotton was the worst because of the intensive use of chemicals. And so that led us to question, Okay, is there an alternative? And that’s when we started to go down the road to make the switch entirely to organic.
“…when you use the word “regenerative,” and that started to mean something to us when we got into the food business in a small way…You can actually give back to nature as much as you’re taking. That was kind of a new North Star for us. And the thing that strikes me now, when I look at it, is that if you want to be sustainable, basically, you have to be regenerative. And that word, I think, conveys more of what we need to do rather than the word “sustainable,” which implies a kind of steady state.”
Denver: Wow. Let’s talk a little about another pivotal moment, and that’s when you sort of shifted your focus from just sustainability to the more ambitious goal of regeneration. How did that come about?
Vincent: Yeah. Well, it’s interesting. We mentioned in the book that we’re not a fan of the word, and we weren’t a fan of the word applying it to ourselves. And the reason is, what I alluded to earlier, is that not many of our practices are… most of our practices where we’re trying not to cause harm, we’re reducing the harm we do, that the activities are still extractive, only less so when we make some changes.
Then we thought we don’t want to call ourselves a sustainable company because we’re not, and we don’t want to give the illusion that we don’t want to talk about making improvements as sustainable when in fact they’re not. There’s also another side of this. A friend of mine is a banker in Florida said, “Well, it’s not a great word.” He said, “Nobody would want a sustainable marriage.”
Denver: I actually know some people who would, but…
Vincent: But the interesting thing is when you use the word “regenerative,” and that started to mean something to us when we got into the food business in a small way, because when you actually adopt regenerative, organic agricultural practices, minimal tillage, companion planting, crop rotation, in addition to not using chemicals, you can actually create topsoil faster than nature can.
You can actually give back to nature as much as you’re taking. That was kind of a new North Star for us. And the thing that strikes me now, when I look at it, is that if you want to be sustainable, basically, you have to be regenerative. And that word, I think, conveys more of what we need to do rather than the word “sustainable,” which implies a kind of steady state.
Denver: Yeah. Yeah. No, that’s a very good distinction. Well, let’s talk a little bit about food. I don’t know if a lot of listeners know that you’re in that business, Patagonia Provisions. Tell us how that got started. You talked a moment ago about mission drift. Now, this isn’t mission drift, but it could sound like that to some people.
Vincent: Well, I think perhaps it was ambitious at first, but I think Yvon loves to eat, and he loves to cook. And one thing is with being involved with a sportswear business with cotton and hemp, you are involved with agriculture in a way.
But to tell you an interesting story, which I think has taught us something about the role of businesses… distinguished from NGOs and government for our time where we’re a good role for businesses. We were having a conversation with Wes Jackson, who started The Land Institute in Salina, Kansas. His life work has been to restore the Great Plains to health.
And an agronomist, he was talking about this perennial wheatgrass he had developed 20 years earlier called Kernza, that could plant these roots 10 feet deep into the ground and mix up the microbes and fungi and create topsoil very quickly, mentioned earlier. And so we said, Oh, this is fantastic, Wes. Where can we buy some?
He said, Oh, you can’t buy Kernza. And we said, Why not? And he said, Well, no one will plant it. No farmer will plant it. Why not? He says, A farmer can’t plant what he can’t sell. And so what we did is we partnered with a brewery in Portland, Oregon to create an ale with Kernza as a content. And we got the first 200 acres of Kernza planted at an experimental farm in Minnesota.
And now it’s being grown, not on a huge scale, but on a much bigger scale than we started, and being used in cereals by some major companies. And I think that what business can do is we can solve problems through a self-sustainable business, where we’re not going to reach people for grants, and we’re not going to the government for taxes.
And to me, this has given the world of hurt that we’re all in, environmentally and socially, that this is an indication of a role for business that is really positive and necessary.
Denver: Yeah. Sort of circular. It’s a little bit of wasted feedstock. I mean, where our waste is another guy’s gold.
Vincent: Yeah. And that, what you’re referring to, I think, is another really strong area for business is: How do we align it so that… It’s very cheap to use another company’s waste as your feedstock for your product. So how do we make use of that to reduce our absolute use of resources?
Denver: I know these are not mutually exclusive, but I think in a lot of people’s minds, they wonder: How can you balance the imperative of staying financially fit while also pursuing a broader societal and environmental agenda? It’d be useful to have them hear, me hear, how Patagonia thinks about that.
Vincent: Yeah. I think for years, for us it was a sense of compromise. There were certain things we did that made money, and there were certain things that we did where we didn’t make money, that we thought we were making a contribution.
But I think that’s shifted over the last 10 years, and I think it’s important to make that shift, because what’s happened is that the constraints that we placed on ourselves made us more innovative. And when the innovations that we developed I think became things that we were known for, not just material innovations, but innovations and processes… and so I think now the profit in the company derives from our business model, derives from our purpose.
I don’t think we changed our mission statement… the mission statement I cited… to this newer one in 2018: We’re in business to save our home planet, which is also something that the employees, I think… when I heard that, I talked to Yvon about it. I thought, Oh, man! This is aspirational language. We’re a clothing company, you know? But again, the employees started to look at that, question that, and say, How does that apply to the work I do to my team, et cetera, et cetera.
And I really do think, especially within the past 5 years, with the advent of Worn Wear, it’s our second-hand platform for clothes; Action Works is a platform we use for our customers to align with local environmental organizations… I think we really have created a situation where the purpose of the company is actually the growing field for the profit. It’s not a compromise anymore.
And I’d advise that because if you have a fight between profit and purpose, usually the profit is going to win, or the search for profit is going to win because we have 700 years of accounting practices and a familiarity with that language, and maybe 50 years of talking about sustainability.
“Profit doesn’t inspire your customers…It’s what you need as an outcome. It’s not what’s going to drive your company forward.“
Denver: Yeah, the thing about purpose, though, is that you get rabid fans. And for profit, you do not get rabid fans. If you’re just trying to sell something, people can switch like that when they see a better deal from a competitor. But when you have purpose, those people stick, no matter what, no matter what the economy is.
One thing I’ll say, I…okay.
Vincent: Profit doesn’t inspire your customers so that…
!Vincent: It’s what you need as an outcome. It’s not what’s going to drive your company forward.
Denver: Well, one thing I’ll say about your newer mission statement, I like it better because it’s easier to remember, and that’s probably not…
Vincent: That’s true.
Denver: …a good criteria, but…
Vincent: It’s good, yeah.
Denver: …easier to remember.
Well, you do have a great relationship with your consumers. I mean, your customers,…you have encouraged them to repair and to reuse and recycle. For me, the iconic ad was: “Don’t buy this jacket.”
Talk a little bit about how a company builds that connection with an audience, which is a lasting connection. It’s really not a transactional connection, it’s a relationship connection. It just doesn’t happen. What’s been behind all that?
Vincent: I think a lot of that has to do with us coming, again, coming out of climbing equipment because we had no more than three degrees of separation between ourselves and our most casual customer when we were in that business.
And then when we started in clothing, we made… the first items were sportswear, but they were really rugged and designed for climbers to use. Then we got into technical clothing. So we didn’t start out as a transactional business, and we never really went down that route.
And I think we’ve told similar stories over… getting close to a 40-year period. We started to talk about the environmental crisis in our catalogs in the late 1980s, and to talk specifically about tar sands oil or the problem with the oceans, or better master plans for national parks. We started giving 1% to environmental causes in 1985, ’86.
Denver: So far ahead of anybody else.
Vincent: Yeah. So I think what happens over time is that the story has been so consistent, and yet we’ve built on it. And it’s also people can get a very quick read on what we stand for, but they can also get a really deep dive in the books…or on our website.
So I think that has built up a level of trust, and I don’t think we’d be successful doing business differently. I mean, that’s kind of what we know how to do. Yeah.
Denver: Let me ask you a little bit about your workplace culture, because you probably understand it better than anybody. You’re meeting with groups of employees all the time, talking about the values of the company. And you have departmental adjacencies and cohesion and informality and flexibility.
I’d be really curious as we looked out so far in our conversation now, is to sort of look internally… and have you just give us the essence of what that workplace culture is like and what makes it special.
Vincent: I think I alluded to the fact of how I became sales manager shortly after my 21st birthday. And I think that we developed a collegial culture, again, because the early employees were climbers and surfers, so it’s just not a strong sense of yielding to authority there, but also none of us knew anything.
So we learned from each other. We leaned on one another in order to figure out, Well, what does this mean to hire a sales force and start going to trade shows? Or, what does it mean to travel to Hong Kong and deliver some purchase orders with specs and colors, and figuring out the right amount to order. All of those things were brand new. So I think we’ve built a collegial culture on that basis, that there was a deed for mutual aid.
And then as we became more professional, and we hired more people who had real experience in the world, that culture stayed with us. And a lot of people who came in wanting to kind of remake the company and the image they were more comfortable with, because they had their MBA from Stanford, or they had a degree in textiles from North Carolina State, and they come in and go, “These people are crazy!”
But often, it didn’t work out for those folks because…
Vincent: … we were crazy in a particular way. And that actually turned out to be closer to the direction of business than the older sort of command-and-control models. We were able to be more agile, responsive and also to develop our own systems and our own means of innovation.
It was closer to probably the early tech company where we don’t operate like we’re a lot smaller, but we’re also operating according to different principles than most tech companies. But I think in the early days, we were fairly close.
Denver: Yeah. Yeah. And I would imagine too, as you got better at hiring, fewer and fewer of those people who wanted to change the company got through the door.
Vincent: Yes. And also there were more people who had experience in other companies like ours. That made a difference, too. I mean, you didn’t have to… Talk about sustainability, there were no classes in sustainability in business school before 2003 or ’04. So we’ve been the benefit of the world moving our way in some ways.
Denver: When you look at companies that produce harmful products or engage in deceptive practices, how do you think businesses, including Patagonia, can be held more accountable to societal responsibilities?
Vincent: That’s a tough question, and I think it can come from several ways. One is, I think, we’re in the apparel business, which is one of the least supervised, the least accountable businesses of all. And it’s pretty bad, especially when you start talking about fast fashion– both the labor standards and the general practices.
So I think the European Union is talking about… they have been for some time, about making some regulation that makes businesses more accountable. But I also think that the one thing about regulation is that it ensures compliance, but it also ensures some dodging. And one of the things I like about the B Corp movement is that the constraints are self-generated.
They’re a little bit more enthusiastic than following compliance measures. So I think that’s important, too. But even within the B Corp movement, we’re now talking about, Okay, these assessments that we’ve been doing for a long time, they should be third-party verified. We should have the same kind of accountability for this as we do for financial accounting.
Denver: Yeah, I think you’re absolutely right. But I also think with the B Corp movement, it had to walk before it could run, and you have to do it in successive approximations. It was, I mean, I’ve looked at that. It’s a tough one to meet. So throw the third-party validation… it ain’t going to get started. But now that it has, I think that is really an excellent idea.
Vincent, you said what has really intrigued you is how the company has increased its capacity to take on and meet progressively bigger challenges. Now that statement really intrigued me. What about the company’s makeup, its character, or its culture that makes that statement true?
Vincent: I think a part of it is simply within human nature. And if you’re a runner, you want to improve your time. If you’re a surfer, you want to surf a bigger wave. And on more complex projects, I’ll give you an example. I mean, we looked at… When we really started in the last 10 years to come up with the numbers that tell us where we are environmentally, how much greenhouse gas emissions we’re producing, what’s our pattern, et cetera.
And one of the things that struck us is 97% of our environmental impact is in the materials, the fabrics we use. So we look at that and say, Oh, okay, what can we do? And half the line comes out of an oil well. Well, let’s improve the recyclability and the performance of the polyester nylon, bring it up to 100% recyclable, or recycled fabric as a feedstock rather than 40%, which is 10 years ago… that’s the highest we could go without losing performance and durability.
So we did that. Is the job done? No, because then we look at the numbers of the emissions, and we haven’t reduced them significantly. And that’s because it turns out that the fabric mills are fired mostly by coal. So then the next step is: How do you work with the mills and help finance and help spearhead a movement to convert the energy source from coal to renewables?
So it’s kind of a never-ending process. You attack one big project and you think you’re there, and it’s a rolling goal. So…
Denver: Yeah. I guess it’s just: never be satisfied with the status quo, because there’s always another thing to do.
Vincent: Yeah. And particularly, when you’re trying to reduce your environmental impact.
“…we learn from our mistakes, but when we succeed, we gain cultural confidence. It enables us to take the next step.”
Denver: And I also would think you probably build confidence. When you meet one of these goals, you begin to start to say, “Hey, we did that. We can do the next,” and it is sort of: “We’re capable.”
Vincent: Yeah. I think that’s a key answer to the… you gave the key answer to the question you asked me, which we learn from our mistakes, but when we succeed, we gain cultural confidence. It enables us to take the next step.
Denver: Finally, Vincent, in comparing your books from 2012 and now, what are some of the enduring practices that have stood the test of time? And which new practices do you believe will be pivotal over the course of the next decade?
Vincent: I think a couple of things that have stood the test of time: The first is the focus on quality. And I think that’s really essential. I mean, I think at several points, people have looked at our business and said, Oh, you know, you do so much good; you give the money… you give so much money away. And well, if you were 10 times bigger, you could give away 10 times as much money.
But the implication, if you’re 10 times bigger is that you’re producing products of lower quality, and you’re accelerating the growth of the business in ways that can create problems. We’ve been there. We know what happens. So this attention to quality, and I think the fact that we’re not a nonprofit… we’re not an NGO; we are a business making things. And I think that that keeps us honest in a way, given both our purpose and our past. So that’s one thing.
I think the second thing is the consistency in how we communicate has stood the test of time, and it’s something we’ll be building on, I hope, for the next 50 years.
Denver: Yeah. The book is Responsible Company: What We’ve Learned From Patagonia’s First 50 Years. There’s probably only one company in the world capable of telling a story like this, and that would be Patagonia. So, pick up a copy today.
I want to thank you so much, Vincent, for being here. It was a great pleasure to have you on the show.
Vincent: Yeah. Pleasure speaking with you. Thanks so much.
Denver Frederick, Host of The Business of Giving serves as a Trusted Advisor and Executive Coach to Nonprofit Leaders. His Book, The Business of Giving: New Best Practices for Nonprofit and Philanthropic Leaders in an Uncertain World, is available now on Amazon and Barnes & Noble.