How Patagonia Grows Every Time It Amplifies Its Social Misson!
Updated: Jan 24, 2019
Below is an article from Fast Company Magazine, printed in its entirety. It highlights one of 2018's World's Most Innovative Companies, Patagonia, and their CEO Rose Marcario.
By Jeff Beer
Rose Marcario struggled to sleep. It was November 9, 2016, just hours after Donald Trump had been elected president, and the CEO of Patagonia was worried about how his White House ascent might disrupt not only her company’s business but the planet’s future.
From the bedroom of her Ventura, California, home, she agonized over Trump’s campaign pledges–to bring back coal, dismantle public land protections, and unwind efforts to combat climate change–which represented everything Patagonia, a stalwart defender of environmental issues, had long fought against. “It was disappointing on so many levels,” recalls Marcario, who felt “a real threat” that all the company stood for was “on the line.”
By 4 a.m., she had had enough. The 52-year-old practicing Buddhist got out of bed to meditate. This was going to be a long one. Marcario centered herself on Patagonia’s 45-year history. While some CEOs were salivating at the prospect of a more laissez-faire regulatory environment, Marcario intuited that this was the moment to embrace Patagonia’s core DNA–“to double down on our activism.”
This wasn’t an end, Marcario thought, but a beginning. She moved to her laptop and began punching out a company-wide email. It was more than her version of “Keep calm and carry on.” In her note, she stressed the urgency “to defend wilderness, to defend air, soil, and water.” She wanted to “galvanize” the Patagonia community around these issues, she says, reminding her people that they must “continue to [use] their voice” and “deepen our resolve to protect what we love.”
She hit SEND around 9:30 a.m., then drove to the office. She bumped into Yvon Chouinard in the parking lot. Chouinard, the Patagonia founder and chairman famous for making breathtaking first ascents on Fitz Roy and El Capitan in the 1960s before building the company into a global brand, felt the same. If anything, he wanted Marcario to push the company further. “Keep going,” Chouinard exhorted her. “Let’s get ready to fight.” It was just what she’d hoped to hear.
Since then, Patagonia has only intensified its efforts. Incited by Trump’s agenda, the company has upped its commitment to environmental activism, making an unprecedented bet on corporate social responsibility. This has served not only to energize product innovation and marketing but to grow the company’s brand awareness and sales. Marcario has overseen a quadrupling of Patagonia’s revenue in her decade-long tenure with the company, pursuing investments in sustainable design and manufacturing and in startups allied with Patagonia’s mission. The company has built a righteous flywheel, like an Amazon for do-gooders: The more it invests in its beliefs and its products, the better Patagonia performs, develops creative solutions, and maps out a blueprint for other businesses, big and small, to follow. “Doing good work for the planet,” Marcario says, “creates new markets and makes [us] more money.” That’s the Patagonia way.
Marcario’s success serves as a rebuttal to companies that restrict societal impact to a second- or third-tier priority in the corporate world. “This isn’t the time to be lazy, to be reserved, to be complicit, to be quiet,” she says. “We’re living in a time when it’s so important for business to drive this new economy, this new view, this aspirational future of business as a force for good.”
Patagonia’s corporate campus in Ventura feels more like a beach town community college than home to one of the world’s most influential apparel brands. Solar panels dot the parking lot, where surfboards and wet suits are splayed atop Priuses and beat-up trucks. The original tin shed where Chouinard first pounded out climbing pitons to sell still sits steps away on its original site, and accents the rustic vibe you’d expect from a company whose founder authored a book titled Let My People Go Surfing.
On a sunny morning last November, I make my way to the second floor of the company’s main building, where Marcario works in an open executive office. Dressed in jeans and a black Patagonia vest over a plaid shirt, with prayer beads around her wrist, she greets me at her desk, which is draped in a giant yellow flag emblazoned with resist in black letters. Hanging just outside the window behind her, an American flag gently ripples in the Pacific breeze.
It’s been almost exactly a year since Marcario wrote that post-election letter, and her intensity still burns. Her Zen manner is balanced with a refreshing, no-bullshit bluntness. Whenever Trump’s name comes up, she shakes her head in frustration. She has little patience for leaders who she feels act out of self-interest. Most CEOs? “So, so phony,” she says. Shortsighted investors? “Destroying the country.” The titans of Silicon Valley? “Pathetic. I couldn’t face myself every day if I gave the kind of weenie answers they’ve been giving on these issues. All these guys [at Facebook, Twitter, and Google] are rich. Why don’t they just do what’s right?”
When I ask about her own leadership style, Marcario says she strives to embrace risk by acting “quickly and decisively,” but not by sacrificing the future, eschewing what she calls the business world’s “suicidal” addiction to quarterly earnings. Marketing VP Cory Bayers tells me that when employees proposed that the company give away all of its 2016 Black Friday sales to grassroots environmental organizations, Marcario green-lighted the plan within 30 minutes via text message. (The company raised $10 million and signed up 24,000 new customers that day.) Lorna Davis, former CEO of the multibillion-dollar organic CPG conglomerate DanoneWave, who counts Marcario as a close adviser, says she pushes those around her to work on a “30-year framework,” to understand the long-range consequences of business decisions, rather than merely what will move the needle next month or next year. “There isn’t too much of that happening in the U.S. right now,” Davis says.
Marcario didn’t always seem destined to become a corporate rebel. When she was 10, her parents split up, and “we went from having a nice, middle-class life to being on welfare and food stamps,” she says, adding that she developed an “underlying neurosis” in the ensuing years to never end up in her mom’s dire financial situation. “I was always afraid I wouldn’t have enough money.” She studied finance in college, earned her MBA at Cal State in L.A., and by her early thirties was heading up M&A at a West Coast investment firm. She became CFO of General Magic, the Apple spin-off that birthed such Valley stars as Android creator Andy Rubin and Nest founder Tony Fadell, and then moved into private equity.
But Marcario found this string of achievements unfulfilling. Her career and personal life weren’t aligned. After profiting from the financial system, she says she burned out and faced “a moment of reckoning.” In 2006, she quit, and spent part of the next two years traveling in India and Nepal. “I went through a kind of personal transformation,” she says. “Studying Buddhism, just figuring out who I was as a person. . . . If you don’t take that to your work and the world, then I don’t think that transformation is complete.”
At one point, Marcario even considered becoming a Buddhist nun, but a chance encounter brought her back to the business world. An old friend who worked at Patagonia told her the company was seeking a new CFO and suggested she speak with Chouinard. An avid adventurer herself who loves kayaking in Big Sur and hiking in Joshua Tree, Marcario only knew him by reputation as a mountain climber who, in her words, never “sold out.” (As Chouinard tells me, “I couldn’t give a shit about how much money we make.”) She admits that she was skeptical of whether the company would live up to its hype, but found in Chouinard an executive mentor and a kindred spirit.
Joining Patagonia in 2008, Marcario worked quickly to review supply chains and streamline production, helping the company eliminate waste and excess packaging. She also helped shepherd new technologies, working with supplier Primaloft to develop a recycled insulation, for instance, which ultimately transformed not just Patagonia’s products but lines from Adidas, Nike, Helly Hansen, and the North Face. In 2014, Chouinard elevated her to CEO. Since then, by funding small, environmentally responsible ventures, Patagonia has helped produce major strides in materials science as well as regenerative agriculture, leading to a surprising foray into selling food under the banner of Patagonia Provisions. By focusing on reducing waste and extending the life of its gear, the company now has a blooming new market for used goods. By engaging customers in its fight for a healthier planet, Patagonia boosts its power. Marcario tells me her spiritual journey from her pre-Patagonia career and life now feels complete. “My whole self is here,” she says. “My values, my passion, my sense of urgency.”
On the outskirts of Reno, Nevada, four dozen technicians lean over sewing machines, stitching away inside the largest garment-repair facility in the United States. Racks of vintage Snap-T fleeces and Fitz Roy down parkas await their attention, a rainbow of retro pastels and neons. This repair center reflects a significant leap forward from the company’s first major move into what’s now cheekily known as recommerce. In 2011, Patagonia purchased a full-page ad in The New York Times, which featured a simple shot of a fleece under the headline “Don’t Buy This Jacket.” The ad encouraged customers to repair and reuse as much of their clothing as possible, and Patagonia created a market with eBay for customers to trade items they no longer needed. The Common Threads Initiative, as the company then called it, repaired more than 30,000 items in 18 months. Ironically, the more Patagonia campaigned on this anti-consumerist message, the more people bought its products. Sales increased about 30% during 2012, to $540 million.
The next year, Common Threads spawned a project dubbed Worn Wear, which began accepting used merchandise in flagship stores, from Austin to Chicago to Seattle. After accumulating enough gear, Marcario established a dedicated Worn Wear section within each retail outlet. Through Patagonia’s VC arm, Tin Shed Ventures, the company acquired a stake in a startup called Yerdle. Cofounded by Adam Werbach, the onetime head of the Sierra Club who had pushed Walmart toward more sustainable practices, Yerdle helped take Worn Wear online. Last April, Patagonia added Worn Wear to its own website, offering customers gift certificates for future purchases if they sent in used clothing.
Patagonia is sometimes labeled, derisively, “Patagucci,” the high-end brand of choice for one-percenters swooshing down the slopes of Chamonix. Worn Wear has served as an antidote, buoying Patagonia’s eco-friendly reputation and evoking the #vanlife appeal Chouinard pioneered decades ago in Yosemite before it became a popular Instagram hashtag. “[Worn Wear] makes our brand more accessible to college kids and others who are looking for lower price points,” says Patagonia senior director of corporate development Phil Graves. Patagonia sold $1 million worth of used clothes via Worn Wear in the first six months of its site. “It was a cool idea to keep our gear in use longer,” Graves says, “but now it’s this fledgling e-commerce business that we want to grow in a big way. The goal is to encourage every major brand to have their own recommerce site behind their apparel.”
This concept of inspiring other businesses to act differently is an essential part of Patagonia’s mission. Patagonia Provisions, for instance, the company’s nascent food line, appears to be a curious aside to the bigger business of selling activewear. But it is directly connected to the company’s commitment to battle climate change, which Marcario says threatens catastrophic “water and food scarcity.” Marcario and Chouinard see Provisions, which has 17 products, as an innovation lab for developing standards in regenerative organic agriculture, a type of sustainable farming that uses fewer resources and is better for the soil, in the hopes that it can encourage others to follow its lead. “We’re at this nexus moment around organic agriculture, where people want to water down the standards,” Marcario says. Less than a month after she makes this assertion, Secretary of Agriculture Sonny Perdue withdrew an Obama-era proposal to strengthen organic requirements for livestock and poultry.
Even as the Trump administration retreats on more environmental commitments, Marcario is resolved to use business to achieve what government won’t. Patagonia deploys both its investment capital and clout to this purpose. Why does it sell buffalo jerky? Because Wild Idea Buffalo, a South Dakota startup that Patagonia backs, uses regenerative practices to raise its bison and help restore threatened prairie grasslands. Why did Patagonia introduce beer to its menu in the fall of 2016? The company wanted to prove the commercial viability of a wild grain called kernza that improves rather than depletes topsoil. (Its supply comes from yet another Tin Shed portfolio company, called Cairnspring Mills.) “We find [ideas in tune with our goals], we invest in infrastructure, we build a path,” says Birgit Cameron, senior director of Patagonia Provisions. Thanks to the early success of its Long Root Ale, Patagonia has evangelized kernza to Nestlé and General Mills, and it’s working with Stanford University and UC Berkeley, among others, to develop courses on scaling regenerative organics. Says Marcario, “When we look 25 years into the future, we don’t see a lot of virgin materials in supply chains, so we’re trying to answer those challenges.”
Marcario has not been shy in using her company’s bully pulpit to protest government decisions that it has strenuously disagreed with, speaking out against the Keystone Pipeline and objecting to Scott Pruitt’s nomination to lead the EPA. (“We expected the worst [with a Trump administration], and we got it,” Marcario wrote in a letter published on Patagonia’s blog.) But she has taken things a step further by productizing the company’s activism.
A year and a half ago, Marcario realized Patagonia needed a new weapon. As much as its community might rally behind the causes the company stood for, there was no way for people to actually participate beyond wearing its iconic logo as a badge of honor. So she tasked her team with creating an “activist hub.” Patagonia had long held a biennial conference to support like-minded environmental organizations. Now, Marcario wanted to develop a service that systemized its grassroots action. “People really want to do something,” she says. “This makes it easier for them to get involved.”
Patagonia Action Works, which came out of beta in February, is a digital platform that’s part social network, part recruiting tool. It allows everyone, from Patagonia’s customers to 720 grant organizations, to powwow around causes, solicit donations, post calendar events, and seek out volunteers. “This [is a] tool that helps people contribute skills,” Marcario says, “to volunteer, [attend] a city council meeting, run for office, start their own NGO.”
In beta testing, Santa Barbara-based Los Padres ForestWatch used Patagonia Action Works to attract 677 public comments on a proposed oil-drilling exemption, a 342% increase on the number it collected for a similar previous campaign. “Being able to leverage Patagonia’s base and resources just put our voice up a whole other level,” says the not-for-profit’s executive director, Jeff Kuyper.
“Getting people out to events is huge,” says John Goodwin, Patagonia’s brand creative director, who is integrating Action Works into the company’s e-commerce site, so customers can buy into causes at the same time they’re buying products. “It’s all about human connection, not just about signing a petition. We don’t want this to be a clicktivism site.”
Patagonia Action Works is a bold attempt to broaden Marcario’s own activism. When Utah governor Gary Herbert signaled his intentions to lobby the Trump administration to roll back federal protection for Bears Ears National Monument, the 1.35 million–acre swath of high desert that President Barack Obama designated a national monument just before leaving office, Marcario launched a protest. With industry partners including Black Diamond and REI, she persuaded the lucrative Outdoor Retailer trade show, which had long been based in Salt Lake City, to relocate to Denver. (The show’s attendees represent a combined $5 billion in revenue and 7.6 million jobs.) Then in December, when Trump announced that he would indeed shrink Bears Ears by about 85%, Patagonia switched its website to a stark black screen with the words “The President Stole Your Land.” The company announced it would be taking the Trump administration to court over the move and issued posts on Instagram, Facebook, and Twitter.
Marcario, whom President Obama honored with the Champions of Change award in 2015, has already felt the bite of counterattack. The U.S. House Committee on Natural Resources, chaired by Utah representative Rob Bishop, declared via Twitter, “Patagonia Is Lying To You.” Interior Secretary Ryan Zinke told The New York Times, “You mean Patagonia made in China?”
For a brand of Patagonia’s relatively modest size, isn’t it daunting to face off with the federal government? Marcario laughs. “I find it funny coming from a guy like Zinke, who said he was going to be like Teddy Roosevelt, and then he just took away [more than a] million acres of public land,” she says. “In terms of where our products are being made, we’re 100% transparent about that. You can go to our site and trace everything, which is more than you can say about what’s happening with the federal government. I don’t think we can trust that they’re going to do anything that is in the interest of the American public landholder and not the oil and gas industry.”
Pioneering a model of corporation as civic-engagement instigator comes with risks. In the past year, companies from Amazon to ESPN have been drawn into the culture wars around the president. But as Marcario sees it, “customers expect” Patagonia to stand for its beliefs regardless of the consequences, even if it means drawing the Twitter fury of President Trump. November 9, 2016, may have been the most trying moment of Marcario’s tenure at Patagonia. But “in the end,” she says, “what came out of that was Action Works, the best campaign we’d ever done for public lands around Bears Ears, and perhaps the most aggressive move I’ve seen my product teams make on fair trade. At the time, it felt like things like fighting for the planet and protecting wild places were slipping through our hands, but all this amazing stuff has come out of that night.”