Company Values
Now more than ever, it’s important for startups to have clear values
By Lenka Davis
"Going purpose" instead of "going public"
This week I was completely impressed with news from Patagonia. Patagonia is an outdoor clothing company that has a mission to protect the environment. I own some Patagonia jackets because they are incredible products made by a customer focused company. They exceeded my expectations from the first one I purchased. I have owned many winter sports jackets and other sports jackets over my lifetime. This company is led by their values and that makes me so happy to buy from them.
Patagonia’s founder, Yvon Chouinard, announced that his company was not going public, but rather “going purpose”.
The title of Mr. Chouinard’s letter, published on his website, is “Earth is now our only shareholder.” How can startup founders be inspired by this extraordinary business owner?
Values Driven
The focus of what you do is much more sustainable if it is driven by your values. Focus gets the task done and helps you not be distracted. Sustainability is necessary because the journey for founders and entrepreneurs is long and tiring. It’s a lonely marathon not a sprint. Values are the guide that directs where you are heading.
Harvard Business Review (HBR) defines company values as:
“Values: What core principles will guide the way we work together as colleagues and for our clients? Values are the moral code of an organization — the set of rules you all embrace and abide by that reflect the ethics of the people in the organization and hold everyone accountable to the right standard of behavior.”
I have a love for snow skiing and being outdoors. When I am not in the snow country, I hike, run or travel. For someone like Mr. Chouinard to be able to combine his great engineering skills, his love of outdoors, the environment, and the ability to run a business is wonderful. And, as a result much of the value of his company is being used to save our planet. In 2018 they changed their company purpose and stated, “We’re in business to save our home planet.” This week he gave his company to the “Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.” And so, the earth is now Patagonia’s only shareholder.
Interestingly, Mr. Chouinard begins his letter with, “I never wanted to be a businessman.” I understand that because when you focus on only the business of business you lose the story and the purpose of it all. It’s way more interesting learning about the path a founder took to get their product to market. What is their personal motivator? What kept them going when the going got tough? Who are they serving? There are so many founder stories out there, many of which can be found on the How I Built This podcast, by the way!
It’s going to be interesting how this experiment works out for Patagonia. Founders break the rules, and disrupt markets.
Integrate values into your startup from the beginning
HBR published an article this year recommending that, because of the pandemic and the events of the last two years, now is a good time to take a look at your company values. Startups have a unique opportunity to do this now because they are so young. Mr. Chouinard mentions in his interview with Guy Raz on How I Built This podcast, that you need to set values from the beginning. Established companies have come to him asking how he instilled his value and he tells them that they need to do it starting with their first employee.
Also it is likely that your customers are evaluating their work and life values. They could be realigning or reinventing themselves, too. Customers are looking at things differently, both by doing things they have wanted to do for a long time and also removing things from their lives. Removing physical items and also keeping their schedule less busy to have time to do what they want to focus on.
Other notes that I thought were insightful that Patagonia does.
Make products better
An engineer that used his own products, improved it based on customer feedback and changed it when he realized how it was affecting the environment. They were their own customer.
Break the rules
They created their own way to success. In the end when “Truth be told, there were no good options available. So, we created our own.” they gave their company to a Collective instead of selling it.
Learn by doing
Initially, he learned how to be a blacksmith to make climbing pitons , and learned how to sew to make the first pair of Standup shorts for climbing. Nobody else was making these products so they did it themselves.
Does your company align with your values? They are going to be your guiding star. Which ones apply to you and your startup?
In January 2023, the new CEO of Patagonia, Ryan Gellert was interviewed by the Wall Street Journal. He is quoted as saying,
“I’m very clear-eyed that we still take more from the planet than we restore, but I like to think that we are offering a model of a different way of doing business””
Mr. Gellert also states that these trade-offs are “never-ending” when referring to the use of palm oil versus toxic chemicals on the clothes, or use recycled plastic bottles into fleece that are more likely to shed micro plastics. As with so many decisions there is no way to see into the future, and know how the long term decision may affect our businesses and our planet. For now, we are thankful that someone is exploring this options.
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Reference
WSJ - CEO of Patagonia Article (may require a subscription)
Lenka Davis is a Managing Partner at Fly to Soar. She has worked in marketing, managing projects and building tools in the high-tech industry for Fortune 100 companies and also ran her own business. Follow Lenka and the Fly to Soar Team on Instagram @flytosoarcompany
