Never one to say or do the expected, Yvon Chouinard, the founder of Patagonia that company known for it’s love affair with the outdoors, takes an uncommon approach to business. I found a recent interview of Chouinard at treehugger.com where he was asked if growth is central to Patagonia’s philosophy. Growth’s an important issue for companies, but I found Chouinard’s take on it interesting:
Growth isn’t central at all, because I’m trying to run this company as if it’s going to be here a hundred years from now. And if you take where we are today and add 15% growth, like public companies need to have for their stock to stay up in value, I’d be a multi-trillion-dollar company in 40 years. Which is impossible, of course.
So all of these companies that are going for the big growth, if it continues for any length of time, will outlast their resources and outlast their customers and go belly-up. And that’s why these huge companies have massive layoffs all the time.
Since I’m trying to run this company like it’s going to be around a hundred years from now, we have to limit our growth and keep it to what we call “natural growth.” In other words, I don’t advertise on billboards in inner cities so that kids buy our black down jackets instead of The North Face’s. In fact, we hardly advertise at all.
Growth Isn’t Central
If 99% of the world’s CEOs stood before their shareholders and said the same thing, how many would have jobs the next day? Patagonia does have the benefit of remaining a private company and not beholden to making the stock market happy with seemingly perpetual growth. However, I do think Chouinard’s hit on something we aren’t willing to address—growth as we’ve defined it over the last decade is unsustainable because we ultimately are finite beings.
We each have so many minutes, hours, days, and weeks in a year. There’s only so many things that any one person can do, buy, or experience. Some people are more efficient than others, but that still leaves a set amount of time. Then there’s the question of how many of any one thing does a person require. How many pairs of shoes, coats, televisions, computers, cars, etc., can any one person use at one time?
Finite Resources
One of the questions that pops up in the tech world, but doesn’t seem to be solved yet, is how to power the innovation. It takes power to run the servers at Google. It take power to run the computers in the homes doing a Google search. It takes power to produce the stuff we buy online and to ship it. In the near future, I suspect the question won’t be whether a company can continue to grow but whether it will even have the power to operate.
Chouinard has been ahead of many other companies in addressing issues like environmental impact. In this instance, I think he’s ahead of other companies when discussing the value of growth in a company. I’m optimistic that we can find a solution to this particular issue, but the focus will have to shift from limitless growth to long-term survival, which will require a new vocabulary for CEOs, shareholders, and the stock market.
(Image courtesy of Bret Frk. Some rights reserved.)
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Matt Hanson
I like it, and it’s important to point out that other models exist for growth and development.
Of course one could read into that language, then see if they follow in Amazon’s path down the road they paved too smoothly for themselves.
@t h rive: you make an excellent connection. some of it depends on how a company chooses to interpret it’s corporate ethos as time goes by.
The tortoise or the hare? Built to last or built to flip? Amidst the corporate rat race, it’s hard to appreciate the Choinards of the world and I am thankful for your post to extend his message. His voice is one that needs to be heard.
…they speak well to that high quality technical crowd, which would be associated with nothing less.
@Matt: Thanks for the compliment. Akismet kicked you into spam, so I’m glad I caught it.
@Caleb: You landed on another word we ignore all too often: appreciation. We’re so busy waiting impatiently for the next iteration of something that we often fail to appreciate what we already have. We’ve been socially trained to chase after more and “better.”
@t h rive: yep.
Nice post and great comments, too. I really love that you revisit the theme of having more than enough - one of my favorites from earlier posts, too. We’ve gotten used to it and we take it for granted.
Twenty-five years ago, and even fifteen years ago for some people, this wasn’t the case. We had three TV channels, one TV, and maybe two cars in my family. Not so today. Most of us are living in this weird new “over-stuffed” reality where we seem to define ourselves by our next purchase.
Last week I saw a five-gallon jar of pickles in a store. Why do I even have the option of buying a five-gallon jar of pickles? I can’t imagine what life would be like after eating five gallons of pickles, but I’m guessing not better.
I also recently heard a definition of the word “poor” on the radio which intrigues me a little. This particular poor person was listed as someone having a car and a cell phone, living in a rented apartment with heat and water, although not in the apartment they would have chosen for themselves. The radio news segment was titled “The Changing Face of the Poor” or something similar. Is it really changing or did we just dumb down the word to feel less guilty in our own excess?
@Shannon: Frankly, I’m not sure I want to know what anyone would do with five gallons of pickles.
You also broach a topic that not everyone is comfortable with: the definition of poor. Some people genuinely have very little, but I think the definition is expanding to include individuals like the ones you describe. I also believe the definition of necessity is changing, which makes it even more difficult to define.
I too am optimistic that we will find solutions to this issue as well as many of the other issues that encompass this topic. The fact that people are aware, engaging in conversations and educating themselves in order to find solutions is HUGE step in the right direction.
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