Patagonia is a clothing manufacturer that follows a socially responsible business model. First established in 1972, this outdoor clothing maker has always emphasized the importance of doing the right thing. The brand has grown to an over $300 million per year enterprise because the goal of the Patagonia business model isn’t just to make lots of money. It’s to prove that it is still possible to do the right thing for the planet and still be able to profit from that work.
After all… if there is no planet, then there is not business opportunity to be had.
A Revelation Born From an Environmental Problem
Patagonia founder Yvon Chouinard has always had a great love for the outdoors. He just wasn’t initially in the clothing business. Chouinard’s entrepreneurial beginnings were in the manufacturing of pitons for climbers. These soft metal spikes were put into a rock face so that ropes for climbers could be secured. He taught himself blacksmithing and started making the spikes on his own, selling them out of the trunk of his vehicle.
This went on for a number of years. In 1965, Chouinard would found an equipment company where climbing equipment was redesigned in virtually every way. In just 5 years, Chouinard Equipment would become the largest provider of climbing hardware in the US.
Despite the success, Chouinard faced a problem. The pitons that were being sold damaged the environment. Instead of keeping with the profits of a proven product, Chouinard scrapped the old pitons and invented an aluminum chock that could be wedged instead of hammered. To market the new product, the idea of “clean climbing” was promoted. In less than 1 year, the chocks were outselling the pitons. That environmental impact and success then led to the Patagonia clothing line.
How Can Being Socially Responsible Be Profitable?
The idea of “going green” as a business isn’t always an attractive one. It often means higher costs, higher prices, and fewer customers. Chouinard not only sources environmentally responsible products to make items through Patagonia, but also provides employees with a unique schedule that meets their needs before the company’s needs. Employees are able to flex their time whenever they wish so they can go surfing, attend a sick child at school, or go snowshoeing in the mountains.
The dress code element at Patagnoia is also unique in the business world today. People can wear what they want. Even bare feet is an option. To Chouinard, the goal is to mix the personal and professional life so that one life, not two are experienced.
The Patagonia business model also asks questions of the business world. These questions can sometimes be tough, but they prove that being socially and environmentally responsible can be a profitable venture. There’s an easy way to do business and there’s a right way to do business. Patagonia believes that where there is a better quality product, there will be better profits.
There’s No Right Way To Do the Wrong Thing
Patagonia doesn’t believe the customer is always right. Consuming less and consuming better are the two trademarks of the Patagonia business model. Instead of trying to make something that harms people or harms the environment, they make something that will be an investment for each customer. For each piece of clothing, in fact, the goal of this business model is to have 100% recycled materials. If a customer purchases a shirt, for example, when it wears out Patagonia wants to be able to make a new shirt out of the materials.
Being socially responsible doesn’t necessarily mean that a bright future is pictured. Patagonia is quite skeptical about what the future will be. As a business, they see people working very hard to create things that are wanted because of boredom. The focus of their business model is to create things that are needed and can be useful, even if there is a prolonged recession or depression.
Do Profits Matter?
If you asked Chouinard how much money Patagonia made in the last year, he wouldn’t be able to tell you. He doesn’t care about the money. He cares about do the right thing and helping each community be more environmentally responsible. To him, the primary shareholder in his organization is the planet itself.
Why is the environment so important? Because it is where everyone will always be. People are always fighting over the environment. To Patagonia, the environment is also the best way to make a profit, but not by exploiting it. It comes through protecting it.