Picking up where we left off in our last post , Yvon Chouinard, the founder and owner of Patigona, wrote a book on his unique management philosophy, Let My People Go Surfing: The Education of a Reluctant Businessman

We’ve gleaned many insights from his approach to doing business in a sustainable way. Here are five more of those learnings:

  1. The importance of focusing on loyal customers. Patagonia understands that it makes the most profit by selling to its loyal customers. The company estimates that a sale to a loyal customer is worth six to eight times one to another customer. This is because the sales effort required to sell to that loyal customer is low while the loyal customer is also likely to provide free advertising as he or she makes recommendations to friends and family. 
  2. His experience of learning the hard way to avoid unsustainable growth. In 1991, Patagonia had to fire 120 employees (20% of the workforce) because they grew too quickly and had too many people to do too little work during an economic downturn. As Chouinard notes, “we had become dependent, like the world economy, on growth we could not sustain.” 
  3. The importance of embracing change. Chouinard notes that business leaders who want their organizations to last must embrace change. Indeed, he believes that “a company must constantly stress itself in order to grow.” Wise leaders invent a crisis by challenging employees with change when no such crisis exists to drive urgency. 
  4. Profit should be viewed as a necessary result, not the goal of a business. Profits happen when you do everything else right. While Patagonia’s bottom line is “the amount of good the business has accomplished,” Chouinard realizes that the company must be profitable in order to accomplish its purpose of combating the environmental crisis.
  5. Being environmentally conscious helps the bottom line! Patagonia used to package their thermal underwear using a cardboard wrapper inside a Ziploc plastic bag. The packaging was replaced with a single plastic band for each brief, meaning that twelve tons of material never made it to a landfill and the company saved $150,000 in packaging costs. After adopting minimal packaging thermal underwear sales increased by 25%! According to Chouinard, “every time we’ve elected to do the right thing, even when it costs twice as much to do it that way, it’s turned out to be more profitable.” 

How good does this perspective sound to you? Are you a small business leader in search of more time to work ON your business and formulate this kind of perspective and a kick-ass plan to take your organization to the next level? We’re here for you. Ask us how!