First, it was just one man selling handmade pitons out of his car and fuelling his passion for rock climbing. Fast forward to a multimillion dollar company making high-quality, sustainable outdoor apparel that’s leading the environmental movement and is now tackling regenerative agriculture as its next initiative. Patagonia is known for doing things differently, and what they’re doing is clearly getting the best of their people, who take them to new heights.
Maybe that’s why Patagonia has a track record of outperforming its competitors, and enjoying continuous growth and unmatched employee retention - leading not only an industry but also multiple social causes.
How does Patagonia’s unique culture and leadership style actually work? And would the same approach benefit other businesses? To find out, I talked to Patagonia’s Vice President of Human Resources and Shared Services, Dean Carter, touching on key concepts in leadership.
What is a leader?
Dean: The leader has a long-term vision, picks the mountain, and motivates people toward a common cause. At Patagonia, leaders also take and shoulder risks. They not only inspire change but they also instigate change. For example, we’ve focused on sustainable apparel. Then one day Yvon [Yvon Chouinard - founder, pictured] says another mountain we’re going to attack is agriculture.
That was completely new and now it's one of our fastest growing divisions. This is leadership. I don’t know who else here would’ve said our next thing is food.
Can leadership come from anyone, at any level?
Yes, that's what we would expect. At any point, anyone can speak up and challenge what’s happening, even challenge the mountain.
Patagonia is known for having a flat structure - how does that work?
It’s a lot more like a network rather than a pyramid or triangle. Communication can happen directly from the CEO or Yvon Chouinard as chairman to an entry level role, depending on who needs to get the work done. There’s just no reverence for reporting relationships or traditional hierarchies. As a matter of fact, we like breaking them because, often, the best ideas aren't from the manager; they're from the person whose hands are dirty doing the real work. If one person's doing the work, you don't need their manager, their manager's manager, and so on, to get things done; you just need the right person.
When it comes to the roles of the leaders vs. managers vs. teams, where does one role end and another begin?
The leader picks the right manager and team, and sets the right vision. They pick the mountain, involving a healthy debate with the crowd about it. If that’s done right, your biggest job as a leader is to get out of the way. The manager addresses how we’re climbing the mountain, keeping everyone directed at the goal, and then giving people autonomy to do their work.
Our philosophy is that the manager is more of a mentor and a resource; they give you coaching and direction, they ensure the work is aligned to the highest business priorities, and they allocate resources. They give people context so they know their role, how things work, and the direction they’re headed. After that, it’s up to individuals to get work done, and we hire very independent people who do that well.
How are decisions made at Patagonia, from small executions to bigger decisions?
Picking mountains is a major conversation at the board level, really sweating the details around the why and how this aligns with the company's mission and purpose. The micro decisions are left to players and teams. So once the board has identified the mountain, we align the company around what points on the mountain we want to reach within particular timeframes. Then we release the organisation to do what they need to do to make it happen.
How does Patagonia's culture encourage people to bring their "full selves" to work?
As long as you get the work done, there's a lot of flexibility in scheduling. People are encouraged to live the lives they want and do what they need to do, whether that's horseback riding, surfing, or seeing their kid’s play. If we're hiring independent people who care about the environment and the outdoors, we certainly can't have a culture that doesn't allow them to do those things. There are many ways this plays out. For example, we pay for two-month environmental internships, and there’s incredible flex time for most positions. We got rid of the annual performance rating, which changes the role of manager from a judge to a coach and allocator of resources. We don't schedule meetings at lunch because we know people are doing yoga or running. We have on-site, integrated childcare and paid paternity leave. Many people work remote.
How does Patagonia orient new managers and leaders to this unconventional culture?
Hiring right is half the battle. We hire slowly and we hire hard. It's not unusual to have a position open for over a year before we find the right person, even at the senior level. Then we have substantial orientation and onboarding in the first year, giving new hires significant time with the senior team. Having our own version of a culture bible, 'Let my people go surfing', is extremely helpful, as it clearly lays out how we work so there are no surprises. By and large, that’s worked out really well.
How does Patagonia's culture differ from the previous places you've worked?
I’ve worked for companies with really strong cultures, from Fossil, to Sears, to Pier 1. The biggest difference is Patagonia’s intensity with their culture. It’s not a gimmick here. Our practices come from Yvon and Malinda's beliefs on what kind of business they want to represent and, from there, we hire like-minded, independent-thinking people to come do that in ridiculous ways. We’re not just being loud about a culture that we’ll quickly re-think if we see a low ROI. No, there might not be an ROI; it’s just the right thing to do for our culture.
What are some major benefits of Patagonia’s unique culture?
The company's widely successful. We're experiencing double digit growth, despite our desire to control growth, at a time when most retailers and wholesalers are reeling, and even though one per cent of our top line sales are going to the environment. Our turnover is freakishly low for the industry at 4 to 4.5 per cent in corporate. 100 per cent of our moms taking maternity leave have returned in the recorded history of Patagonia, which I think is a ridiculous statistic. So the business is successful, the people are highly engaged and they're staying, and we have a long list of people who'd like to get in.
What have been the key challenges with this culture?
Decision-making. That is by far the the biggest challenge because of our low hierarchy and the independent nature of the people we hire. When you don't have specific hierarchy, it can be difficult to determine, "Who makes this decision? Can we move forward?" We have to help managers and employees navigate that, and I can't say we have it 100 per cent, but this actually works really well in responding to change, in crisis, and in times of urgency or high-risk because you can immediately tap into the people you need to get things done and make decisions fast. It also works well in keeping people motivated because they feel like anyone could have a stake in the game.
Another challenge can be re-training new managers who may have a command-and-control mentality and think that everything has to go through them. We have to work really hard to untrain old habits so they understand their role is around maximizing the talent and the resources they have, versus the oversight and management of every single piece of it. That's difficult. It's a paradigm that we work really hard to bust.
How is Patagonia addressing these challenges?
We try to have conversations in advance to help managers understand all the players, get more decisions laid out upstream versus downstream, and engage everyone who needs to be engaged from the beginning. It's a challenge we're willing to live with given the other choices.
Do you think most companies would benefit from adopting this kind of culture, or is it only for particular types of companies?
It certainly helps being private. The pressure of a public company to drive profit on a quarterly basis for people who only have a financial vested interest in the outcome of the company is significant. So it does help to be private when our vested interest is certainly to make a bigger impact, but it's not always growth. We plan to be here in the next 100 years so we think about long-term results. One way that plays out is the onsite childcare; these kids are literally our future leaders - we have people working all over Patagonia who grew up in the center here. So if your employees' kids are going to lead your company someday, what would you do? Would you create an environment where parents can spend more time with their kids and make sure they’re well cared for?
It’s possible for other companies to behave in these ways, you just need a really courageous CEO and leader. You're seeing a movement right now for investment in companies that are not just green but are also doing the right things; that aren’t just upholding the bottom-line and product, but also a sustainable culture. I hope that investing practices will shift, and I'm beginning to see some of that already. In the new world order, it's much more about the right people getting the work done than it is about the right hierarchy to make things happen.
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