We don’t see many examples of companies taking a stand for their values. My own observation is that most companies are driven by profits, not values. Most leaders see values and profits as belonging to different realms – values on the “soft” side and profits on the “hard” side of business.
Every once in a while, we see an example where a company puts values before profits. There’s the well-known story of how Johnson and Johnson immediately and voluntarily pulled 31 million bottles of Tylenol capsules from store shelves in the wake of the 1982 “Tylenol Tampering Murders.”
At the time J&J leaders made that decision, it looked like it would put them out of business. In the end, their actions actually made them heros and their profits increased. But it’s important to recognize that at the time they made that decision, they had no idea what the financial impact would be. They made the decision based on values, not profits.
That was 35 years ago, and we’re still telling this story because the decision to take a visible stand putting values before profit in a high-risk situation is so rare.
Profitable, Values-Driven Companies
Fortunately, we do see many examples today of profitable, values-driven companies – companies where values are embedded in every aspect of its culture and how it runs its business – such as Disney, Zappos, Southwest as well as many small to mid-size companies like Berrett-Koehler Publishers. And gratifyingly, we see that these companies are profitable. It’s important to tell the stories of these companies and challenge the notion that values and profits belong in different realms.
Patagonia is one of these profitable, values-driven companies. An accredited and founding member of the Fair Labor Association, its website is as much an educational tool about environmental and social responsibility as it is an online store.
In 2014 they were featured in a Fast Company article “How Patagonia’s New CEO Is Increasing Profits While Trying To Save The World.” Since the time Rose Marcario had joined Patagonia as CFO in 2008, Patagonia had doubled its scale of operations and tripled its profits. At the time she became CEO in 2014, they had about $600 million in revenues. An inspiring example of how a values-based company can also be profitable.
However, on December 4, 2017, Patagonia gave a new definition to what it means to be a values-driven company. They took a strong stand that put their company at risk around an issue that did not directly affect their business.
Patagonia Takes a Stand
Taking a public stand when the company itself is not under pressure… putting purpose before profits when the issue is not impacting their business… is something we don’t see often at all.
Whether or not you agree with their stand, the fact that they took such a strong stand for an issue aligned with their values but not directly tied to their financial model is nothing less than astounding.
On December 4, 2017, responding to lobbying efforts for access to uranium and coal deposits and to states’ pressure to sell public land, President Donald Trump signed a proclamation to shrink the Bears Ears and the Grand Staircase-Escalante national monuments by more than 1.1 million acres (85%) and more than 800,000 acres (46%), respectively.
Within hours, Patagonia changed the home page on their website so this is the only thing you saw. No links to any of their products. Simply a request to take action and, if you scrolled down, an explanation of why Patagonia takes a stand.
They also created this 90-second video showing the spectacular beauty of the national parks that will no longer be protected.
Two days later, they also filed a suit to block Trump’s decision in Washington federal court. Similar cases have been brought by environmental groups and Native American tribes, but Patagonia is the first retailer to get embroiled in such litigation.
The Risk of Taking a Stand
It turns out that Patagonia’s stance was good for business, at least in the short-term. But that was not assured any more than it was in 1982 when Johnson and Johnson made their values-based, high-risk decision. Nor is it assured it will continue to be good for Patagonia’s business in the long term.
Patagonia will be under attack by the Trump administration and supporters for a long time. Patagonia’s values will be misrepresented, their motivation will be misconstrued, and there will be an attempt to discredit Yvon Chouinard, founder and owner, and the Patagonia leadership team. It will be unpleasant for them personally in the short-term, and how things will play out for them in the long run is unknown.
Different from Johnson & Johnson who was already in a high-risk situation, Patagonia chose to put themselves in a self-imposed high-risk situation. They didn’t need to put themselves in the spotlight. They were doing fine financially and living their values. There was no business crisis.
But a values-driven company acts in concert with its mission. And Patagonia’s mission is: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
And sometimes, if you are values-driven, you have to take a stand because you believe it’s the right thing to do, even in the face of risk.
As a consumer, I am loyal to companies that take a stand for what I believe. I also know that I shun companies that take a stand against my beliefs, like Chik-fil-a. My grudges run as deep as my loyalty. I recognize others make choices on their beliefs, which may differ from mine.
AND, I do want companies to be socially responsible. I have been following and purchasing from Patagonia for years because of their commitment to the earth and how we enjoy it (and I love hiking in Southern Utah!). I also love their products, which have to be good, too.
Your attitude is not unusual, and I’m surprised by how many businesses don’t understood the importance of their relationship with their customers. Most of Patagonia’s customers enjoy being outdoors so it’s safe to assume that most care about the environment, but it’s also likely that many don’t. Patagonia’s willingness to alienate a certain portion of their customer base because they feel it’s more important to act on their values stands in stark contrast to companies who are willing to alienate their customer base because they are focused on short-term profits.
You clearly explain how customer loyalty drives long-term business success. Thanks so much for taking the time to share your insights, Marcia.
How is this different from an oil company taking a stand to open up public land for drilling?
Historically when businesses take a political stand it is around an issue that directly impacts their profitability. Patagonia’s stand is not tied to their bottom-line. They are a retailer and don’t need these national parks to remain protected in order to sell their clothing.
I’m with Marcia on this, the values that a corporation (or a person…same thing, right?) stands with are really important to me. I think that public attacks by such a person will eventually backfire as people get tired of their own values being trampled. Great post, Jesse!
“public attacks.. will eventually backfire as people get tired of their own values being trampled.” I agree, Dave. Unfortunately, the current atmosphere of polarization is around perceived differences in values. Hope we can learn to elevate our conversations to the arena of our common values.
Thanks for highlighting this values driven decision. There is a message in there for all of us individually deciding how much we are willing to risk for our values.
I agree, the message is for us as individuals in our personal lives, not just for businesses. Thanks for pointing that out.
Love the new post and I try to shop and support companies that support my values. Last year, on Black Friday and in response to Trump’s election, Patagonia announced that all sales that happened on that day would go to support environmental agencies like the Sierra Club. My family all made our list and purchased Patagonia. I know they had a record-breaking day. And now this – love them and love your post. Thanks for highlighting. We need more companies like Patagonia.
And thank you for demonstrating how values-driven companies build a loyal customer base. We can all learn from that.
Especially since Considering and subsequently championing “Full Steam Ahead,” I am not surprised about their stance on the federal lands or their post-stance financial success.
Consider this excerpt from Patagonia‘s mission statement: “For us at Patagonia, a love of wild and beautiful places demands participation in the fight to save them, and to help reverse the steep decline in the overall environmental health of our planet.”
This excerpt together with their product design approach in that mission statement are ‘textbook’ examples aligned with “Full Steam Ahead!”
Exactly! It is a great case study. And I’m delighted to now be able to use one that isn’t 35 years old.
Isn’t it wonderful and truly American when leaders use our right for freedom of speech to speak up and act in ways that are consistent with their and American values? Over time people can have differing opinions, but it is great that we live in a country where we can have conversations about the issues. I would like to see leaders (positional and natural) lead by focusing on issues, not blaming, attacking and name calling (all of that leads to the polarization we are observing–quite sad!) And Americans do have the right to support those companies whose leaders are consistent with our personal values. Some choose REI, Patagonia, Lyft, or North Face because they align with the values of those leaders’ values. Others choose Monsanto, Halliburton, Exxon, Uber, Home Depot, or IBM and what they value and how they treat their employees. We have choices in America.
As you point out, the key to productive conversation is to focus on the issues, not attack personalities. And I agree, we are blessed to live in a country where we are free to attempt to have these conversations. Many thanks for your insights Marcia!
We try to support values-driven companies that have a social conscience. I’m not so sure I would put Disney on the list for reasons I can explain to anyone interested. Their bottom line in my view is not entertainment, it’s profits for shareholders.
In addition to “taking a stand” I would add two other ingredients to companies that I support. Those companies who solve problems and make things happen as part of their mission are ones I admire, respect and support. Patagonia has the led the way for years and thankfully there are more and more joining this movement. And, by the way, being attacked by Trump these days may well be a compliment that you’re doing the right thing!
I’m not sure about Disney either. Murdoch is keeping Fox News and Sports. The challenge to Disney will be whether it can maintain its values as it acquires companies that do not hold the same values, and that remains to be seen. I’ve also been watching Southwest with interest with its acquisition of AirTran. Culture is the most difficult, and usually least attended to, aspect of M&A. But so far, I have not seen Disney sacrifice the integrity of their values for profits. The Costa Concordia disaster never would have occurred on a Disney Cruise Line because their number one value is safety, above entertainment. On the other hand, we have seen numerous examples of how values can erode over time in companies that do not continue to integrate them into every aspect of their business. Many thanks, Gary, for your insightful and thought-provoking comments!
Your recent post is a perfect synthesis of a corporate response to a threat on our environment. If only there was a global corporate response to climate change, based on values rather than profits. I loved the short video that you linked to, having visited both national monuments earlier this year. The breathtaking beauty only makes it harder to deal with our current administration. One can only hope that Trump decisions today, in all areas, can be reversed once he leaves office, which hopefully will be within the next year. Thank you, Jesse, for sharing this.
Hopefully more businesses will take public stands, especially as they see the support and encouragement like yours. I have hopes that businesses leaders will begin to shift their focus from short-term profits, look further out toward long-term consequences and see that they can play an important role. Thanks so much for deepening the conversation Larry.
Yes companies which display real integrity deserve to be hailed and supported. The attack on public lands is a tragedy. The Chump administration deserves to be castrated and ousted for its lack of scruples.
The challenge to each of us is to find a way to move beyond the current divisive polarization that keeps us trapped in a perpetual state of anger, distrust and hopelessness.
Thanks for highlighting the importance of this action, Jesse. I agree that it is a critical milestone when company’s publicly take a stand on issues affecting society. As commercial enterprises have more and more influence on day to day life and society, it matters to all of us where they come down. Ironically, we accept that companies will influence public policy when it is in their narrow self-interest, but it is a little trickier when they aim to influence it based on values. I see pros and cons, and the need for some new guidelines.
You raise an important conversation. The current guidelines around how corporations can influence public policy have given corporations a strong foothold in promoting their self-interests. Now we have a business (Patagonia) that is attempting to influence public policy for social good, which rights an imbalance. But you raise a larger question about whether one desired end is ok (social good) and the other not (self-interest), and what role can and should business play in influencing government. You remind me of the work that American Promise is doing to address this issue. Thank you for deepening this conversation.