58 pages • 1 hour read
Yvon ChouinardLet My People Go Surfing: The Education of a Reluctant Businessman
Nonfiction | Autobiography / Memoir | Adult | Published in 2005A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Part 2, Sections 5-7Chapter Summaries & Analyses
Part 2: “Philosophies”
Part 2, Section 5 Summary: “Financial Philosophy”
Patagonia believes that profits come naturally from making high-quality products; Chouinard claims its express goal is not to turn a profit. However, Chouinard still believes profits are important because they indicate customer approval. That the company turns a profit also lends a credibility to its environmentally conscious model of business that would be lacking otherwise. Being privately owned allows the company to focus on a quality product line rather than its stock, which often becomes a publicly owned company’s product. A report by the Strategic Planning Institute found that an emphasis on quality makes for a profitable company:
[Q]uality, not price, has the highest correlation with business success. In fact, the institute has found that, overall, companies with high product- and service-quality reputations have on average return-on-investment rates twelve times higher than their lower-quality and lower-priced competitors (390).
One reason for the focus on quality is that high-quality products are returned less. Returns cost money to process and cost companies in terms of lost customers. In the United States, Europe, and Japan, only 14%, 8%, and 4% of customers, respectively, will tell a company they’re unhappy with their product. Of those customers, 33% to 50% will never buy from that company again.
Being privately owned also allows the company to grow at the natural rate of increasing demand that it finds acceptable. It believes aggressively drumming up demand to stimulate growth is unethical. In years with slow or no growth, the company makes a profit by becoming more efficient. Patagonia also takes an ethical approach to taxes and accounting. It refuses to dodge taxes and chooses the most transparent accounting practices.
Part 2, Section 6 Summary: “Human Resources Philosophy”
Patagonia’s present-day office culture is a descendent of the original countercultural crew of climbers who orbited the early Chouinard Equipment. It hires passionate people who love the outdoors and are committed to producing superior products. It shuns hiring identical business-school types. As Chouinard puts it, “[a] business that thrives on being different requires different types of people” (408).
Internally, the company has a history of social progressivism. While fewer than 50% of its upper management in Europe and Japan are women, a full half are in the United States. Since Chouinard always wanted work and life to intermingle, the company has a flextime policy called Let My People Go Surfing that allows flexible hours. Under Malinda Chouinard’s directive, the company has operated an on-site, state-of-the art daycare at their headquarters in Ventura to parents at the market rate since 1984. This has given rise to a village-like approach to raising kids who are responsible and independent. As of 2016, Patagonia had another childcare facility at their office in Reno and had plans for one at their headquarters in Japan. Also under Malinda Chouinard’s directive, Patagonia provides 16 weeks’ paid maternity leave, 12 weeks’ paid paternity leave, and full health insurance, even to part-time employees. These benefits are not only moral; they’re financially smart. It costs an average of 20% of an employee’s salary to replace them, meaning it is cheaper to entice employees to stay.
Part 2, Section 7 Summary: “Management Philosophy”
Patagonia hires independently minded people who aren’t afraid to challenge bad decisions, even of those above them. The company encourages a culture of communication to avoid the apathy born of unvoiced doubts. To facilitate this culture, everyone works in shared spaces without dividers. When employees voice all concerns and then come to a consensus, they are more committed to the plan of action as a result. Chouinard believes in consensus over compromise, because he thinks compromise doesn’t work: “[It] leave[s] the problem not completely solved, with both sides feeling cheated or unimportant or worse” (261).
These egalitarian workplaces still require direction, which comes from leaders, not managers. A manager maintains the status quo and doesn’t have a vision. On the other hand, a leader problem-solves independently and identifies and navigates necessary change. A good CEO prevents the company from wallowing in failure or basking in success; the successful CEO knows that change is necessary to keep the company yarak, the falconry term for a hyperalert, hungry bird perfectly suited to hunting (216). The impetus for this change also comes from the bottom: New employees with different values and culture are encouraged to inspire change from the ground up.
Patagonia found that for this egalitarian set-up to work best, offices should remain under 100 people. This count ensures maximum communication while avoiding bureaucracy. Furthermore, many studies have shown that workers divided into small groups show lower rates of absenteeism and sickness and higher productivity, social interaction, and morale. Small groups are also better at problem solving because they’re more democratic than larger ones.
Part 2, Sections 5-7 Analysis
Patagonia’s philosophies are informed by Chouinard’s longstanding conviction that quality and a healthy work environment shouldn’t be sacrificed for more profit. Patagonia’s early commitment to product quality and its adoption of progressive workplace benefits established it as a trailblazer of the honest, socially responsible business at a time when this model wasn’t popular. That research later vindicated Chouinard’s conviction, showing that quality and competitive benefits are strong indicators of business success, revealed that the Chouinards possessed an intuitive grasp on which improvements were both moral and profitable.
While the Chouinards spearheaded these major changes, they didn’t enforce absolute rule. By discarding hierarchical office space structure, they fostered an egalitarian environment that encouraged the disagreement and collaboration essential to innovation. Subsequent research showed that offices under 100 people that are divided into groups of four to seven are happier and more productive than larger ones. This point again reveals the Chouinard’s preternatural ability to identify innovative workplace structures that are conducive to both higher productivity and workplace satisfaction. As in the rest of the company, the marriage of these two things was the Chouinard’s central business innovation.
