Two Business Lessons From Patagonia’s Yvon Chouinard

Patagonia founder Yvon Chouinard is something of a reluctant businessman. He never set out to create one of the most well-known clothing and outdoor brands on the planet.

Everything he made during the first few years of the company was gear that him and his friends could use on their expeditions when they went mountain climbing or kayaking. Most of their product ideas came from things they actually needed in their real-life travels and adventures because no one else was making the gear they required. Patagonia was something of an accidental success story because they never set out to make the company such a large, well-known business. The growth came from the fact that they continued to put out high quality products while looking to always do things the right way for both their customers and employees.

In his book, Let My People Go Surfing, Chouinard describes many of the lessons he’s learned over the years that came from Patagonia’s continued grow. Here are two I thought were important and often misunderstood.

1. Philosophies aren’t rules; they’re guidelines.

Our philosophies aren’t rules; they’re guidelines. In every long-lasting business, the methods of conducting business may constantly change, but the values, the culture and the philosophies remain constant.

At Patagonia, these philosophies must be communicated to everyone working in every part of the company, so that each of us becomes empowered with the knowledge of the right course to take, without having to follow a rigid plan or wait for orders from a “boss.”

Living the values and knowing the philosophy of each part of the company align us all in a common direction, promote efficiency, and avoid the chaos that comes from poor communication.

We have made many mistakes during the past decade, but at no point have we lost our way for very long. We have the philosophies for a rough map, the only kind that’s useful in a business world whose contours, unlike those of the mountains, change constantly and without much warning.

I’ve talked in the past about the importance of defining your investment philosophy, but this is something all businesses and leaders should take into account. Chouinard cared about profits and growth but he was more concerned with doing things the right way and treating his stakeholders with respect.  I’m always impressed by these types of firms that seems to have it all by succeeding in business and beyond.

2. Have an open mind and utilize a wide number of disciplines to solve problems and make decisions.

Until the 1970s the countries in the world where snow and ice climbing was practiced were divided into those that used only flat-footed (or French) cramponing techniques and those that climbed on the front points of the crampons. Both schools of climbing were equally proficient, but neither side was willing to admit the worth of the other’s technique. It is possible to do all your ice climbing with only one technique – as many persons still do – but it is not the most efficient way nor does it make for a very interesting experience. It is like knowing only one dance. When the music changes, you are still dancing, but rather out of tune. So, as is usually the case in these matters, the truth lies right down the middle. Now all the best ice climbers know and apply both methods in their cramponing.

Charlie Munger’s latticework of mental models came to mind when reading this passage. Munger once said, “For some odd reason, I had an early and extreme multidisciplinary cast of mind. I couldn’t stand reaching for a small idea in my own discipline when there was a big idea right over the fence in somebody else’s discipline. So I just grabbed in all directions for the big ideas that would really work.”

This is something many people who are specialists in the investment industry have a hard time comprehending. They have trouble admitting that there is more than one way to invest. There are many different ways to make money, run a company or manage a team. It takes a heavy dose of intellectual honesty to admit that there are multiple approaches that work to solve a problem. The most intelligent people I know have the ability to utilize many different schools of thought when making decisions.

Let My People Go Surfing: The Education of a Reluctant Businessman

Now here’s what I’ve been reading on this holiday week: