Are you a small business owner who wishes they could do more to protect the environment? While it’s easy to look at larger globalized corporations and think that the only way to make a difference is through substantial donations to eco-friendly charities, the truth is that there are a lot of small steps you can already take within your business and your local community to greatly reduce your environmental footprint. In this episode, Gene Marks and Vincent Stanley, Patagonia’s director of philosophy, discuss how small business owners can promote environmental awareness through their company’s practices and their corporate values.

Podcast Key Highlights

  • What Are the Responsibilities of Patagonia’s Director of Philosophy?
    • The majority of Vincent Stanley’s work as Director of Philosophy at Patagonia consists of teaching its current employees about the company’s values.
    • Outside of Patagonia, Vincent teaches these same principles to graduate business students across the country. He is also an avid promoter of the B Corp movement.
  • What Can Small Business Owners Learn From Patagonia?
    • Because local businesses are so deeply rooted in their community, they are also rooted in the natural world that their community is a part of; as a result, these local businesses and their client base tend to have a genuine concern for the environment.
    • There is even more pressure on small business owners to deliver high quality products and services due to the personal level of trust that they’ve cultivated with their customers.
    • Since small business owners rely primarily on repeat business from their fellow community members, your reputation as a local citizen can have a tremendous impact on your success.
  • What Has Patagonia Done to Instill Such a High Level of Quality in Its Employees?
    • Unlike other companies that try to micromanage their workforce, Patagonia has done a good job of giving their employees “permission to bring their brains and their heart to work.” This company culture provides their staff members with a sense of agency, and a sense of pride in their work, because they’re the ones in charge of keeping their customers happy.
    • A lot of their employees’ motivation also comes from the fact that they’re working for a company that not only sells high quality products, but is also committed to their mission of promoting environmental action.
  • What Should Business Owners Be Doing to Reduce Their Company’s Environmental
    Footprint?
    • Begin by identifying your business’s biggest material impacts as well as any environmental impacts. Once those factors have been determined, try to find greener alternatives.
    • For owners of service-based businesses, focus more on finding ways to conserve your energy and water usage. You should also strive to reduce the amount of waste that your company generates.
    • If you need additional ideas on how to build a more environmentally friendly small business, consult the B Impact Assessment tool.
  • Why Should Your Small Business Become B Corp Certified?
    • When you apply to become B Corp certified, your company will be evaluated on a criteria of 200 different points. You need a minimum of 80 points to qualify.
    • The B Corp assessment metric provides you with an outside holistic look at your current practices. As you further your business’s commitment to these values and reassess your progress years later, you can get a clear idea of how you’ve improved and what areas still require more work.
    • From a legal standpoint, becoming B Corp certified ensures the protection of your values, so that if you decide to sell stock, all your buyers must agree to abide by the basic values that you’ve established as the foundation of your business.
  • Why Is It Necessary for Small Businesses to Have a Clear Set of Values and Philosophies?
    • Customers aren’t doing business with you to help make you profitable. They do it because they believe in what you’re making or the service you offer.
    • The current labor force wants to feel proud about the place that they work at, so cultivating a positive brand image and philosophy is necessary for both attracting and retaining good talent.

Links

Transcript

The views and opinions expressed on this podcast are for informational purposes only, and solely those of the podcast participants, contributors, and guests, and do not constitute an endorsement by or necessarily represent the views of The Hartford or its affiliates.

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Gene: Hey everybody, it’s Gene Marks, and welcome back to another episode of The Hartford’s Small Biz Ahead podcast. Thank you guys so much for joining us, whether you’re listening or you’re watching us online.

Gene: Thrilled to have Vincent Stanley from Patagonia. I’m a huge fan of the company. I’m bumbling out the word. Vincent is the director of philosophy at Patagonia. So, first of all, Vincent, thank you for joining me.

Vincent: Well, thanks for having me here. Yeah.

Gene: Glad to have you here. And you know what the next question’s going to be. What the heck is a director of philosophy? Let’s start from there. Tell us what you do at the company.

Vincent: Well, just to give a little bit of background, when I go around and talk to small businesses, or I talk to graduate students in business or design or environmental studies, I’m really conscious of Patagonia is a company that has a lot written down about its activities. But I’m also conscious that I worked for the company for 20 years before we had anything written down.

Vincent: And for the last 30, we’ve had something written out called the Patagonia Philosophies. And this was something that came about in the late ’80s and early ’90s. We were growing very, very rapidly, and I think we kind of lost our way. NGOs talk about mission creep, and I think businesses have the same problem where you start with one thing, and then you see opportunities and you kind of grab onto them, but some of them are not necessarily intrinsic to your strengths, your roots, or the direction you want to be growing in. And we were very much that kind of company.

Vincent: So, Yvon at a certain point, started gathering 30 people at a time and going off in a bus to some remote location, like Yosemite or the Marin Headlands, and we’d sit around in a circle outside, about 30 people, and talk about how is it we want to do business? There were eight of these, so we brought people by their function.

Vincent: So, I was head of sales for a long time. So my group came for sales, it was an HR, general management, finance, design, production, etc. Those eight philosophies became the heart of “Let My People Go Surfing.” But that was about 15 years later when that book came out, so we’ve had that within the company for a long time. And Yvon used to teach the classes, teach classes seminar style, for 12, 13, 14 employees at a time.

Gene: And just to interrupt you, Yvon is the founder and the former owner.

Vincent: Exactly.

Gene: Right? Okay.

Vincent: Exactly. And so, in 2014, when I was coming to the end of my operational responsibilities, the last one I was head of marketing for a while, what I wanted to do, I had worked on the original classes and I had helped edit or write the original philosophies, is I wanted to teach the classes.

Vincent: So, that’s part of what I do, and part of what I do is to work with graduate students and had a gig at Yale for the last nine years working with students from the Divinity, the Environment, and the School of Management. And then about a third of the time, evangelizing for the B Corp movement, and 1% for the plan.

Vincent: So, just as a quick anecdote, when I was coming up with a title, I thought Director of Philosophy, I thought, “Well, that’s just a little… I’m not sure I qualify.”

Gene: Yeah, it’s definitely an unusual title.

Vincent: But I have a friend who is a real theologian, and so I asked him, “Is this okay if I use that title?” Well, he said, “Yeah.” So, I had his blessing, and that’s how I assumed it.

Gene: So, you’ve been with this company for 50 years. You have written this book along with Yvon called “The Future of the Responsible Company: What We’ve Learned From Patagonia’s First 50 Years.” It is a book that is published in mid-September, so I think by the time this conversation gets released, we’re recording this in early September, it will be out there.

Gene: And I think, Vincent, that’s what our audience is really interested in. I mean, you mentioned you started with Patagonia when it was a startup. It was a small business. And here you are where it’s a global enterprise now. And you’ve written a book about what you’ve learned, and also what the future will be.

Gene: I almost feel like just handing the floor to you and saying, “Okay, so tell our audience, what have you learned about growing a business over the past five decades, the kinds of lessons that you think are relevant to any business for any time?” Share with me some of the things you’ve learned.

Vincent: Yeah. Well, I can start with what I think is kind of the beauty and the role of small business, which is frequently that it is local. That it is based in a place. And I think that’s something we need very desperately in this time.

Vincent: I think what we’ve had for the past 50 or 60 years, the globalization of the economy, and we’ve got a lot of benefits from that, but we’ve also… I think we’ve kind of driven out local economies, the small-town businesses that are not part of a chain.

Vincent: And the reason I think that’s important is that a business that’s rooted in a community is also rooted in the natural world that that community is a part of. So, if you have a strong environmental bent, as Patagonia does, and you want to save the underlying natural systems, the forest, the rivers, the oceans, from the kind of degradation that we’ve had for the past 40 years, you have to have people who care about it. And people who care about it tend to be the people who love those places, and they tend to be people who are local.

Vincent: So, I think the whole local infrastructure and the caring for a particular place, caring for each other and community, which also I think often reduces the kind of political polarization we’ve had, if you’ve got a neighbor across the table from you, it’s very different from ranting online about your particular stance on things.

Gene: If I can jump in on this as well, just to add to that point because I think it’s a really important point, people love to buy local. People like to support their local small businesses. And when you think that the impact that a business can have on their local community, it is a great way to position your business, it’s a great way to brand your business, and no one has to say that you need to become a global enterprise like a Patagonia. I mean, many of us can make a very good living and have a very good lifestyle in our local regions, and still really do good for our communities.

Gene: I just think that’s important for small business owners to really remember that.

Vincent: Right. No, I think it’s really important. And Patagonia really got its start in a very small industry of the outdoor industry, and most of the stores that built our brand and were our major customers were, at the most, regional. There was always an REI, but for the most part, there were small regional chains or individual stores that we sold to and really supported us.

Vincent: And even as we’re… We have about 70 retail stores around the world now. But what we try to do is make those local businesses. We always have strong connections to the local environmental community, and also the local sport community. If it happens to be fishing or climbing or surfing or trail running that is the major sport in the region, we have strong connections to those folks.

Vincent: But I’m also conscious that we are kind of a hybrid business because we certainly produce globally. I don’t know if your listeners know this, but there’s only 5% of the clothing sold in the United States is made-

Gene: In the United States.

Vincent:… in the United States. And most of that tends to be t-shirts and sweatshirts, very simple things.

Vincent: I think the other thing that’s sort of important to mention about our own journey is that we started… And I think this is something where we identify with small businesses, especially of people who are making high-quality gear or selling it, because we started as a mountain climbing equipment company.

Vincent: When I started in ’73, was the year we came up with the idea for Patagonia, but basically we were a small shop of about 10 people making climbing gear. And there’s something about… That was a very small world. I remember sitting in the outside in the sun inspecting ice axes for hairline fractures and thinking, “If I fall asleep on the job, I’m going to hurt someone. And it’s not going to be a… it’s going to be a friend, friend of a friend, or friend of a friend of a friend. The universe was that large.

Vincent: It was also critical, I think, that in climbing, you don’t make good, better, best, because your customers are trusting their lives to the quality of your gear. So, that was a kind of habit.

Vincent: When we got into clothing, we intended to get into a business with a broader customer base, and much less investment in tools and dies to make 200 or 300 items that would sell over a period of three or four years.

Vincent: Then I think we thought we were, “Oh, this is going to be a great business. We’re going to keep our hands clean, and we’ll make a fortune, and retire at 40, and sail off to the south seas.” But it didn’t work out that way. And I think that that’s because we had adopted the habit of making quality gear and caring about the community of people that we were selling to.

Gene: I’m going to jump in with you on that point. So, besides the local focus, that attention to quality is so important. And I was thinking, I was in an airport a couple of weeks ago, and I got a Big Mac from a McDonald’s there, which was awesome, by the way. First one I’ve had in like a year, and it’s amazing.

Gene: But I was thinking about the person in the back making the Big Mac for me, and I was wondering if that person, who knows, just realized that she had a customer that was really excited about this sandwich, and that she was going to make this sandwich to be the best that she could possibly make it. You know what I mean?

Vincent: Yeah.

Gene: And obviously, that’s tough when you’re running a larger company. You have hourly workers. You’re trying to whatever. But your example of the axe is exactly right. And I think you were very small at that time. But in the end, when you’re making your product, don’t you agree that you have to have the end customer, and somebody’s going to be using this that’s being made, and they’re buying it. It’s going to be really important to them, and we should all give it that level of attention so that they’re not disappointed, right?

Vincent: Yeah. And I think one of the points we make in the book is in favor of a whole view of business as a stakeholder business. So, yes, you’ve got to make money in order to pay the bills, or you’re not going to be around.

Vincent: But the employees are the ones who keep enterprise going. The customers are the ones who are going to keep your business going for the future. Because for a small business, it’s repeat business, and it’s also customers telling other people that they like your business, and this is a good place to go.

Vincent: And then, the community you operate in is absolutely essential to your reputation, what kind of citizen you are locally. And then, I think how you treat the natural world that you’re a part of. It’s hard in suburbs and cities to be aware that there’s a natural world, but underneath everything, it’s those systems of water, the health of the water, the health of the air, the health of the soil that keep us all going and will keep our kids going.

Gene: I’m going ask you some questions about the future. But before we even leave the topic of employees, only because you’ve been with this company for so long, you’ve seen it grow, approximately how many employees does Patagonia have now?

Vincent: I think it’s about 3,500, something like that.

Gene: Yeah, 3,500 employees, and you’ve been part of that growth. And I’m wondering how you’ve managed to maintain… I mean, Patagonia is considered to be one of the better companies in the world, and has won awards for the quality of its products, and that does start with your employees.

Gene: And you said you were in sales and marketing, so you’re selling products. Your whole livelihood, personally, was reliant on these products being good, and that your customers would enjoy using them and continue to buy them from you, which basically means you’re relying on the employees to recognize that level of quality.

Gene: Thinking back on Patagonia’s growth, what do you think the company has done to instill that level of quality with its employees to motivate them, to have them put that effort into making such a quality product? Is there anything specific that you’ve learned there?

Vincent: It’s a good question. I think most of the… We do have tremendous levels of employee engagement and loyalty, and I think most of that is because we give the employees… I’ll back up a little in it.

Vincent: There’s a great quote I heard from a French aircraft manufacturer who said that people need to know who they’re working for, they need to know why they’re working for that operation, and they need to be free to determine the how. Right? And I think that we’ve done a good job of giving people permission to bring their brains and their heart to work.

Vincent: In retail, if you go into a Patagonia store, it would be really unusual… If you walk in with a jacket with a broken zipper, the first person you talk to is going to take care of that. Nobody’s going to say, “I got to talk to my manager.” Or, “Here’s the rule book on paragraph 3C(a) on how to deal with a broken zipper.

Vincent: That gives the employees a sense of agency, and also a sense of pride in their work, that they’re the ones in charge with keeping that customer happy. They’re also, I think, proud of the fact that they are selling a quality product, and they’re also proud of working for a company that’s committed to environmental action. That’s become, over the past 10 years, I think, a big motivator for people.

Vincent: So, rather than I think anything we do to train, or anything we do to kind of cultivate or instill employee engagement, I think what we do is give people permission to bring their deepest values to work and to bring their intelligence to work. So, we’re not saying, “You’re so stupid you’re going to have 27 rules written out for you in terms of how you deal with the customer.”

Gene: Yeah, great answer. And that also involves a lot with people that are working remotely, as well, around the world. I hate it when companies over-monitor or over scrutinize everybody. You give your employees the respect as adults to make their own decisions, and to deliver what they promised to deliver.

Gene: So, the book that you’ve written is called “The Future of the Responsible Company: What We’ve Learned From Patagonia’s First 50 Years.” In it, and I’m reading from my notes here, you’re giving certain advice to companies, to people reading this book, about companies should be reducing their environmental footprint, they should be making legitimate products that last, I’m reading off my notes here, they should be reclaiming deep knowledge of their business and its supply chain to make the most of opportunities in the years to come, and to earn the trust that they’ll need by treating their workers and customers and communities with respect.

Gene: Now, we don’t have time to go through all of that, and I do want people to buy and read this book, but I’m going to try and pick out one or two of these items and ask for you to elaborate.

Gene: Obviously, the biggest one is about reducing your environmental impact. So, talk to me a little bit about that. You say we should be reducing our environmental footprint. How do we do that? Give me some of your thoughts on that.

Vincent: Yeah. Well, I think there are several ways to do that. One is to understand what your environmental impacts are. And I think for every business, you can look at it in two ways. One is, what are my big material impacts? And then, what do I do, in everything I do in business, where is there environmental impact, and where can I reduce that?

Vincent: The advantage of that is not so much in the… It is in reducing environmental impact, but it also forces you to think. And when you’re forced to think, you often innovate in business in ways that you don’t when you’re just looking at ways to become more efficient or to cut costs.

Vincent: For instance, Patagonia, and we know that 90% of our environmental impact is in the materials we use. So, anything we do to reduce the use of fossil fuels, to use 100% recycled content in polyester and nylon, makes a huge difference. Anything we do in natural fibers, like cotton or hemp, to reduce the environmental impact is huge.

Vincent: But we also look at everything. We have permeable concrete in the parking lots. We use low VOC paints. We use recycled materials and everything, and we recycle everything that we no longer use. And I think the benefit of that, aside from just a benefit to the planet, is again, is that it forces us to think. When it forces us to think, we use our imagination in a way we don’t when we’re just kind of going along with what everyone has done.

Vincent: Nobody sat down and said, “We’re going to generate huge plastic gyres in the ocean.” But over time, what’s happened is, we throw a party, and you look at the garbage can at the end of it, then you’ve got a couple of pounds, three pounds, of plastic waste there. So, how do you get around that? It’s worth thinking about all of that.

Gene: You just mentioned that at Patagonia, I mean, your biggest contributor, the biggest thing about your business, is your materials, so you’re looking and focusing on that because obviously that has such an environmental impact.

Gene: How about for a service business? Curious if you have an idea. There are so many service businesses in this country. My company, I’m a consulting firm. There’s accounting firms. I’m a CPA. There’s so many others that provide services. I’m just kind of curious, for our audience, if you were advising somebody running a service business that doesn’t buy materials, what are ways that you think they might want to consider or think about reducing their environmental footprint?

Vincent: Well, energy use, waste generated. It’s interesting. This is something. The B Corp movement was built by small businesses. And if you go online, they have examples of the B Impact Assessment. They go into great detail in all of these areas, and you can take a look and grade yourself as a business to see what the examples are.

Vincent: We do include… I’ve forgotten how many pages, but it’s quite substantial list of checklists in the back of “The Future of the Responsible Company” to give examples of the kinds of things everybody can do to reduce their water usage, to reduce their energy costs and their waste. Those all present savings to most businesses, because all of these things are increasingly expensive.

Gene: You mentioned the B Corp certification. And just for our listeners and watchers, I wrote a piece on B Corp in the… I write for The Guardian, so I wrote about that certification. And it’s a certification not anywhere different than getting ISO certified if you’re a manufacturer.

Gene: If you wouldn’t mind, rather than me explaining, can I ask you to explain a little bit more about becoming B Corp certified, why that’s important? What’s involved?

Vincent: Yeah. It’s a movement of companies that agree to write their most deeply held values into their business charter and their articles of incorporation. So, that’s one element of it. And again, I think being forced to think, and imagining, okay, what are my business’s key strengths, but also what are the key values that drive me, drive my associates, and drive this business, and how do we build that into the business model, rather than just say, this is something nice to have on Friday afternoon when we’re taking off for the weekend?

Vincent: The impact assessment that I refer to has a scale of 200 points. I think the average business that looks into becoming a B Corp has a score of about 55. It requires a minimum of 80 to become a B Corp.

Vincent: And I think there are two advantages for a small business. One is that it provides you baseline measurements. It provides kind of an outside holistic look at your practices. And by the time you get to your second impact assessment two or three years down the road, you get an idea of where you can improve or where you’ve done really well.

Vincent: And I can’t think of another kind of certification that looks at the business as a whole. Different certifications will look at GMOs, and they’ll look at environmental practices, and they’ll look at social. The B Impact Assessment looks at the whole.

Vincent: There’s also a second component, which is a legal component, that’s not directly tied to B Lab, but B Lab sponsored the movement, and now I think 37 or 38 states have a classification called the Benefit Corporation. Which does not exclude you from being whatever classification of business you are, but it provides some legal protection for these values. So that if you sell stock, or somebody in your company sells stock, whoever buys in also agrees to abide by the basic values that you’ve established as foundational for your business.

Gene: It makes me laugh. I mean, you started working with Patagonia, so it’s 50 years ago, this must’ve been in the ’70s when you started working, right?

Vincent: Yeah.

Gene: Which is, it’s a long time ago. I mean, imagine having this discussion about B Corp certification, and building a sustainable business, and reducing environmental footprint, I mean, not even heard of, right? I mean, you would’ve been laughted out of the room?

Vincent: No, it wouldn’t happen. And there would be nobody to laugh. I mean, we wouldn’t have even been able to offer… I mean, I remember in the early ’70s, that’s when all the major environmental legislation was passed to protect urban air and water. And we really viewed it as the government’s responsibility to protect the environment.

Vincent: We didn’t view it as… Earth Day was like three years old when I started Patagonia. So, the idea that you could have agency, or you could have responsibility for the impact you laid on society and on nature, that just didn’t exist. And that was something that gradually dawned on us over the years.

Gene Marks: Because I remember in the ’70s there was the commercial with the Native American, with the pollution, and the teardrop. That was trying to motivate us to stop polluting, which had an impact.

Vincent: Yeah, it did. And I think that Earth Day had an impact, and the fact that… This is something younger people won’t realize. I remember, Ventura is 100 miles from Los Angeles, so our air was pretty clean. But if you drove the van with a load of pecans to have them heat treated in the San Fernando Valley in Los Angeles in July, you expected your eyes to start watering because the quality of the air was so poor.

Gene: So bad. Yeah.

Vincent: The Cleveland Plain Dealer stopped reporting when the Cuyahoga River would catch fire from its chemicals. You could develop film, black and white film, in Lake Ontario by dipping it into the water.

Vincent: People forget how obvious the environmental problem. And now the problem is, I think, is that everything is better on the surface, but the underlying, the shortage of water, the loss of species, the change in the climate, all of these things are not… Climate change is beginning to be in our face, but these other things are not.

Gene: So, just, I know we’re almost out of time here. We’ve been talking about “The Future of The Responsible Company.” We’ve talked about reducing your environmental footprint, making products that last, earning your trust from workers. Give me your philosophy, as you are director of philosophy, for a small business now in the 2020s.

Vincent: Sure.

Gene: Back in the day, it used to be all about profit. Now it’s something a little bit different than just making a profit. I think it’s important to show that you’re giving back to the community, and you’re functioning in society, and that is good for profit. Am I right?

Vincent: Yeah.

Gene: I’m curious what your final thoughts are on that.

Vincent: Yeah. I actually think that the values of the business owner and the purpose of the company are something that’s really highly underrated. I don’t think a lot of people got into business to make a profit. They got into business… Henry Ford wanted to make a car, or wanted to invent something. People get in because they care about a particular field. There’s something that doesn’t exist that they want to help bring about. That’s how Chouinard started with climbing equipment, or how we started with clothing.

Vincent: There’s a line I read, “We all rely on air to breathe, but we don’t wake up in the morning and say, “I’m going to breathe today.” We think about what we’re going to do.” And I think for business, profit is like breath. It’s what allows you to survive, but it’s not necessarily what drives you forward or what attracts customers. Nobody wants to be your customer to help make you profitable. They want to be your customer because they believe in what you’re making, or the service you offer.

Gene: And it’s not just your customers, but your employees as well.

Vincent: Your employees, and your community, and the people who sell to you.

Gene: Yeah, absolutely.

Vincent: It’s a circuit.

Gene: I hear time and time again from my clients and my readers, their biggest issue they’ve been having is finding and retaining good employees. And being be certified, B Corp certified, and being the kind of company that you emulate, that’s a way to attract people nowadays. Younger workers, particularly, they want to feel proud about the place that they work, right?

Vincent: Yeah. No, I think that’s really true. I was giving a talk at a college in Massachusetts a few years ago, and the dean took me aside, and took me into his office, and very hush, and sat down and said, “I’ve got a problem. I’ve got a problem.” Says, “My graduates won’t go to work for a bad company.”

Gene: Wow.

Vincent: So, I said, “Well-“

Gene: That’s not such a bad thing.

Vincent:… that’s not such a-“

Gene: I don’t think that’s his problem. I think that’s a problem for the companies that can’t recruit those people.

Gene: Vincent Stanley is Patagonia’s Director of Philosophy, and with Yvon Chouinard… Am I pronouncing Yvon’s last name? It’s Chouinard?

Vincent: It’s either Chouinard or Chouinard. Yeah.

Gene: Chouinard or Chouinard. Yeah, I think I had that right after all these years. Both Vincent and Yvon have written “The Future of the Responsible Company: What We’ve Learned From Patagonia’s First 50 Years.” Wonderful book that I recommend people check out, particularly our small business owner audience who are looking for growing and building and running responsible companies in the 21st century.

Gene: Vincent, thank you very much for spending the time. I learned a lot, and I appreciate you spending the time with us.

Vincent: Thank you, Gene.

Gene: Everybody, you have been watching The Hartford’s Small Biz Ahead Podcast. If you need any advice or tips or help in running your business, please visit us at smallbizahead.com or sba.thehartford.com. My name is Gene Marks. Thanks for watching or listening. We’ll see you again next week. Take care.

Gene: Thanks so much for joining us on this week’s episode of The Hartford’s Small Biz Ahead podcast. If you like what you hear, please give us a shout-out on your favorite podcast platform. Your ratings, reviews and your comments really help us formulate our topics and help us grow this podcast. So, thank you so much. It’s been great spending time with you. We’ll see you again soon.

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