Would you rather spend a day at the beach than hunched over a laptop?
Would you like your employer to pay your legal fees?
Would you like to take your child to work and keep it in a cardboard box?
OK, that last one sounds weird, but all three sentences could conceivably be written into a job vacancy advertisement for Patagonia. Not that they need much help in the recruitment department.
You know a company looks after its employees when Google promotes it as a suggested search term. Type in the word Patagonia into Google, and the search engine offers up Patagonia staff retention, Patagonia employee benefits, and Patagonia staff case study.
Patagonia is highly regarded for the way they treat staff, and it shows in their retention. They have less than four percent staff turnover rate (the retail and consumer product sector average is more than triple that at 13 percent).
That 13% may be about to get higher.
In May, Dr. Anthony Klotz, a Texas A&M University academic, forecast the ‘great resignation.’ Based upon his research, he predicted a global trend of workers quitting their jobs. So far, he has been proven correct — in September alone, over 4.4 million Americans quit their jobs.
With the Great Resignation looming over businesses, what can leaders learn from Patagonia? And more importantly, is it too late?
The answer is a lot. And maybe.
“We have always considered Patagonia an experiment in doing business in unconventional ways. None of us were certain it was going to be successful, but we did know that we were not interested in ‘doing business as usual.’ Well, we have survived and even thrived for close to half a century.”
That is a quote from Yvon Chouinard, founder and owner of Patagonia from his book “Let My People Go Surfing.” The book highlights Chouinard’s unusual methods to build his company, but one thing stands out throughout the book.
The business was built on culture and people.
The title of Chouinard’s book comes from the flexibility he gives to his employees. If the surf is looking good, he allows staff to take time off work, grab their boards and hang ten.
In the words of Dean Carter, Global Human Resources Manager for Patagonia, “we hire people who love being outside, people who love the outdoors. So when the surf’s up, they’re going to be surfing anyway. If we didn’t have a Let My People Go Surfing policy, we’d have a lot of performance action plans.”
Carter — and Chouinard, don’t care where you are as long as you get the work done. Many companies say they have similar policies. I can attest, having worked for several large corporates that, the reality is different.
Yvon Chouinard starts his book with the following sentence;
“I’ve been a businessman for almost fifty years. It’s as difficult for me to say those words as it is for someone to admit being an alcoholic or a lawyer. I’ve never respected the profession.”
It is an unusual quote to start a business book, but Chouinard set out to build an “un-company.”
He aimed to build a company that took care of employees, customers, and the planet from the outset. Patagonia, the ‘uncompany’, now does almost $1 billion in sales each year and has 3,000 employees worldwide.
Elon Musk used to brag about working up to 120 hours a week. When I ran my business, it was a badge of honor to see how much I could work. It was three years before I took my first day of annual leave.
It was a stupid way to think — both for Musk and me — and at odds with Chouinard. He spends five months out of the office each year, staying at his house in Jackson, Wyoming. During this time, he doesn’t answer his phone.
“People know if the warehouse burns down, don’t call me. What can I do? [They]know what to do.”
They also hire people with strong beliefs — and allow them to be their authentic selves. For example, if an employee is an activist, that is OK; Patagonia encourages peaceful environmental protests.
And what’s more, if that person happens to be thrown in jail, the company will pay their bail, cover their legal costs and even pay them for any time away from work.
When Carter was asked by a reporter why they do this, he replied, “we want them to be who they are.”
Authenticity is important.
Question: How do you get staff members to stay?
Answer: Make them unemployable elsewhere.
Patagonia allows its staff to be independent. As Chouinard says, “ant colonies don’t have bosses. Everybody knows what their job is, and they get their job done.”
Putting trust in your staff empowers them.
It also has two significant benefits for the company. The staff morale is higher as they know the company has confidence in their abilities. But it has another side benefit, according to psychologists who have studied the Patagonia culture. Their employees are so independent they become unemployable anywhere else
All of the above adds up to the incredibly high retention rate. When a vacancy does pop up, Carter says there are more than9,000 applications.
And once people stay, they don’t leave.
“I call us the Hotel California. You check-in, but you don’t check out.” Dean Carter
All of this has been built on the back of 50 years of culture. Chouinard knew what he wanted to build and worked on it from the start. He introduced flexible work schedules back in the 1970s. This is remarkable considering many businesses felt it hard to adjust to staff working remotely in 2020. Offering staff flexibility is obvious now, but it was unheard of fifty years ago.
They introduced paternity leave back then also — something many Fortune 500 companies still don’t offer. When a staff member’s maternity leave was up, they allowed her to bring their child to work. Nannies would accompany parents on business trips so children could come.
“We put them in a cardboard box on your desk, and that worked for a while. But then we got some screamers, so my wife started a childcare center.” Yvon Chouinard. (There is the cardboard box reference I made earlier).
The childcare center encouraged mothers to stay with their job and not lose precious bonding time with their child. They boast a 100% retention rate for mothers returning to work.
Even more remarkably, some of those babies that spent time in the Patagonia childcare center now work for the company.
It is the ultimate succession planning program.
So there is good news and bad news here for business leaders and entrepreneurs.
Companies can try and follow Patagonia’s blueprint. They can offer more flexibility and independence. Provide a better work/life balance and allow employees to be their authentic selves. But it needs to live and breathe through all parts of the business and evolve, not be manufactured. Writing something into a policy or manual doesn’t mean it can then be forgotten about.
Chouinard says many CEOs have come to him to learn how he built his company and to try and copy his model. Often they would like a few of his ideas and say they will bring part of it back to their own business.
Yvon would tell them it would fail. “Because you have to start with it, with the very first person you hire.”
And that’s the bad news for companies now trying to avoid the Great Resignation. It’s too late. It needs to be ingrained from the get-go.
So what’s the good news?
For any aspiring entrepreneurs about to embark on the journey of starting a business. You have the chance. Read Choiunards book. See what you can steal from it. And build a culture where employees love what they do and can’t imagine working anywhere else.
Take away the Great Resignation by creating a Great Motivation.
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Author: Ash Jurberg