Going purpose: what Patagonia teaches us about business, marketing and doing good
Patagonia has been a go-to example for me for years when I talk about starting with why and breaking marketing rules. Owner Yvon Chouinard’s book Let My People Go Surfing is a must-read that I often recommend to people who believe in a better way of doing business.
And today he’s once again set the example. In an open letter to customers, he explained that 100% of the company’s voting stock will be put into the Patagonia Purpose Trust, which has been created to protect the company’s values. All of the nonvoting stock has been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.
In short, each year, the money Patagonia makes after reinvesting in the business will be used to help fight climate change (rather than in the pockets of individuals).
“Earth is now our only shareholder,” says Chouinard.
Wow. THIS is purpose in action.
Here are some thoughts around this news.
** Update **
Since writing this blog post about 10 days ago, my thinking has moved on a bit. Inspired by a conversation with Jeffrey Shiau and further informed by reading this article, I feel it is important to add the following bits of context for your consideration as you read my marketing thoughts.
Despite Patagonia’s claims that it is reimagining capitalism, can an old cis white man who has accrued enormous wealth over his lifetime really be the one reimagining capitalism?
Should we believe the claims that Chouinard is a “reluctant businessman”? I’m yet to hear of anyone who accidentally built a global empire making billions in revenue.
The funds are being moved from a family to a family-managed trust/501(c)(4). No, I don’t know what that means exactly but from what I can gather, these kinds of trusts are widely used in political lobbying. Problematic for anyone who believes in true democracy.
This move has also been described as “a masterful bit of corporate maneuvering” that means he avoids paying taxes.
A valid viewpoint presented by Whitney McGuire is that there remains many unanswered questions about this news, including who will be involved in the Holdfast Corporation and what their projects will be. She also highlights that anti-Blackness is at the root of ecological and social degradation.
As Jeffrey said: “This is definitely a case where multiple things are true.”
They added:
“It's good that there's more money going to the cause.
It also means he avoids paying a lot of taxes.
It means the family keep their influence over the company.
It's also still a developing story as it's unclear what the non-profit established will do."
"Ultimately, I don't think it moves the needle much in the grand scheme of things. Unless there are scores of other billionaires ready to follow suit, which I doubt, it's an individual solution to his "problem." It's not systemic change. It doesn't actually challenge capitalism in any way.
"The world simply won't be saved by billionaires. Under capitalism, self-interests will always take precedent. Even the very few rich and powerful who seem to want to improve the world, like Chouinard, lack the imagination to actually challenge the system that led to their success."
With these thoughts in mind, I have changed aspects of my original article.
We don’t need billionaires
Have you ever tried to spend Elon Musk’s fortune? I mean, bloody hell. No individual needs that much money, do they?
I’ve long held the belief that no person can become a billionaire without having taken advantage of people or the environment in the process.
When I first read the Patagonia news, I was ready to go back on my statement. I was thinking maybe not all billionaires have trampled on others to get their money.
Now that I’ve had more time to think, I’m going to stick to my viewpoint that we don’t need billionaires. Because billionaires are hoarders of wealth.
That’s not to say that you and I shouldn’t want to earn money. Because good things happen when good people get money.
When good people have more money, they invest more in good causes and local economies. They don’t sit on it until they’re 83 and then make grand gestures.
Something to consider if you feel guilty for charging a lot of money for your work, or if you are scared to increase your prices because you don’t want to be seen as greedy, or if you think there’s something inherently gross about wanting money.
Walk the walk
As this announcement was made, the UK is in the midst of an enormous display of wealth (preparing for the Queen’s funeral with all the pomp and ceremony associated with it).
Billions of taxpayer pounds will be spent on the state funeral, while citizens are being told there’s not enough money to help with the rising cost of living nor invest in green energy. Instead, the new government plan to reverse the ban on fracking in the UK and if Jacob Rees-Mogg has his way, “extract every last drop” of oil and gas from the North Sea.
The Patagonia move felt like the opposite of this: generosity fuelled by a commitment to the greater good.
This is probably why those of us who are environmentally and socially conscious were so thrilled by the news. It was a glimmer of hope in a world that felt like it’s lost compassion and perspective.
But it also shows that we have come to expect so little from the super rich, that we were ready to deify an actual billionaire for just not being selfish.
Make your own rules
“Truth be told, there were no good options available. So, we created our own.”
We cannot dismantle systems while playing by the rules made by those very systems. Whether that’s replacing mainstream marketing with ethical marketing, racism with Liberation, patriarchy with equity - we need to be prepared to change systems.
We need to ask difficult questions about our own conditioning and biases, our perceived and real barriers to progress, and who we are really serving through our actions.
And if there is no system that allows us to move forward, we have to create our own.
“Evil doesn’t have to be an overt act; it can be merely the absence of good. If you have the ability, the resources, and the opportunity to do good and you do nothing, that can be evil.”
The bottom line
I don’t know about you, but this announcement has made me want a whole wardrobe full of Patagonia clothes. Even now, with this new knowledge and context about Chouinard’s billions.
Patagonia’s purpose is: “We’re in business to save our home planet.” And I think their only shareholder is going to be VERY happy with the returns they’re about to see.
After Patagonia explicitly told people NOT to buy their stuff, do you know what happened? Their sales went up 30% and they had their best profit in about two decades, according to SNews.
Because Patagonia gave people a way to feel amazing about spending money. They’re not just buying an item of clothing, they become part of the Patagonia family - and not in a superficial way like so many businesses try to exploit through loyalty schemes designed to make more profit.
It’s real because that purpose runs through every thread of this business. The makers, sellers, buyers - a team working together to serve a greater purpose.
It’s about doing good, together.
What small businesses can learn from Patagonia
I’m a small business and not a billionaire (do check out my services to help get me closer). If you, like me, don’t have lots of money to give away, what CAN we do? Here are a few things to consider.
Commit to ethical marketing.
Get politically active. That will look different to different people - for some it may mean protests, for others it may be writing to their representatives, for you it may mean taking the first steps towards understanding politics better. I do believe as a society we’re deliberately being kept confused about political systems, because knowledge is power.)
Spend your money where it matters. Seek out alternatives to Amazon and others like them. Make ethical the new normal.
Question claims about sustainability. Just because someone uses sticks “eco” on a product range, does that make them a sustainable business? Ask the questions and call out the bullshit.
Make your own rules. If a system doesn’t fit, find your own way.