Patagonia CEO stresses need for balance in business

Dana Wong

While most companies care only about dollar signs, profitability can work hand-in-hand with social consciousness, the president and CEO of Patagonia Inc. clothing company told about 200 Kellogg students and alumni Wednesday afternoon at Allen Center.

Michael Crooke said there are three basic pillars to success in a large corporation: the “triple bottom line” of financial, physical and social goals.

Most corporations just focus on the first two goals and neglect the environmental and social aspects, he said.

“We need to work in harmony with Earth and each other,” he said.

To combat this, the business world first has to admit that everyone is a polluter, Crooke told audience members at the lecture, part of the fourth annual Innovating Social Change Conference.

Businesses need to aim for producing the best quality product with the minimum damage to the environment.

Crooke said substituting Gore-Tex, the waterproof layer used in many raincoats, for other more environmentally-friendly alternatives is one way clothing companies can help preserve the environment.

“The Gore-Tex … lasts 10,000 years in a landfill,” he said.

Patagonia uses the motto “committed to the core” to guide their “quadrant” of business values: a commitment to environmental activism, uncommon culture, innovative design and “the soul of the sport.”

The company extends its environment friendly outlook beyond its products, to its 100 percent wind-powered factory with natural lighting and cooling mechanisms, as well as a main office building, “Firehouse,” made almost completely of recyclable material.

Crooke said the outdoor, mountain climbing-orientated product line was targeted at two main groups – hardcore climbers and consumers looking for quality products.

“We sell products to the hardcore dirtbags who spend $400 on a piece-of-shit car and $600 on a fishing rod,” he said.

Despite the economic decline caused retail sales to drop, customers still support the company, Crooke said. This reflects customers willing to pay extra money for Patagonia’s use of organic cotton and other environment friendly materials, he said.

“Our loyal customers don’t mind paying $60 for a Patagonia shirt made of organic cotton compared to the $45 Columbia shirt hanging on the same rack,” he said.

Audience members said they appreciated Crooke’s fresh look on business principles.

Third-year Kellogg student Paige Ponder, 28, was pleased with Crooke’s message of incorporating environmental goals into company policy.

“I loved it,” she said. “It is really wonderful that Kellogg and Kellogg students have such events. (Crooke’s method) is the way to go in the future for integrating goals into business.”

Kellogg graduate student Dave Ramaswamy, 28, said Crooke gave him a goal to work toward.

“(Crooke’s talk) gives you a good long term vision on how to evolve,” he said. “Businesses should have a social aspect. On spaceship earth we all have roles to play. It is imperative to make a difference.”

Kellogg alumna Cynthia Buciak said Crooke’s ideas challenge the conventional profit-orientated view of the corporate world.

“He gives most of corporate America a lot to think about,” she said. “It gives them a sense of a broader mission, makes them think about how to run business without only shareholders in mind.”