Has Your Purpose Ever Lost an Argument?

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Every company you have worked for had a page of values. Most of them had "integrity" on it. Name the quarter one of those words beat a revenue number.

Marketing writes the values page and finance wins the revenue argument, and they are never in the same room when something is at stake. Patagonia gets cited constantly as the exception, almost always for the 2011 ad.

1972. Seventy percent of revenue.

Around 1970, Yvon Chouinard came down El Capitan, and the cracks were wrecked. Every party on the route had hammered steel pitons into the same fissures and hammered them out again, and each cycle took a little more of the granite. He had made the pitons. Chouinard Equipment was the largest climbing hardware supplier in the United States, and pitons were about 70 percent of the business (Signal v. Noise on the 1972 catalog).

In 1972 the company published its first catalog. It opened with an essay by Chouinard and Tom Frost, and carried a longer one by Doug Robinson, and between them they told the company's customers to stop buying the company's main product and place aluminum chocks by hand instead (the 1972 Chouinard catalog, scanned).

Two climbers ran a hardware company in a small sport with one dominant product line. Nobody had asked for the replacement, nobody was forcing the change, and they had never made chocks at volume. Chouinard Equipment was the market. They put the argument against their own product at the front of the catalog. Within months the piton business fell away and chocks sold faster than the company could make them.

The outcome was not knowable when the catalog went to press.

2011. The objection that was right.

On Black Friday 2011 Patagonia bought a full page in the New York Times. Above a photograph of a gray fleece: DON'T BUY THIS JACKET. Below it, the company listed what that jacket cost the world to make, in its own accounting. The page cost $57,000 (David Gelles, The Secret History of Don't Buy This Jacket).

Inside the company, the idea had a hard time. Kris McDivitt Tompkins, who had run Patagonia and still sat on the board, called it inauthentic marketing gimmickry. Patagonia sold things for a living, and telling people to buy less of what you sell was, in her read, a pose. She also pointed out that Black Friday opened the best trading week of the year and the ad was aimed straight at it (Gelles). Of the three decisions, this is the weakest, and she had the better case.

Ridgeway attached the message to Common Threads, the program under which Patagonia repaired, resold, and took back what it had sold. The board approved the program, and the slogan rode with it.

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2012. The $50 million problem.

Then-chief executive Casey Sheahan valued the earned coverage at $40 million to $50 million, and sales went to a record the following year (Gelles).

The version that ended up in the case studies is that honesty is good marketing. Tompkins had already given the other one. Telling people to consume less sold more product.

That left the company holding a position it could not act on. Growth meant making more of what it said the world needed less of. The equity had a market value, and whoever inherited it could sell.

2022. Removing the exit.

On September 14, 2022, the Chouinard family gave the company away. All of the voting stock, two percent of the value, went to the Patagonia Purpose Trust, which exists to hold it. All of the non-voting stock, the other 98 percent, went to the Holdfast Collective, a non-profit that spends what it receives on the climate. Patagonia expects to send roughly $100 million a year to it out of profit not reinvested in the business (Patagonia, September 14, 2022). Chouinard's letter is one page. "Earth is now our only shareholder."

Going public or selling to a mission-friendly buyer would have been worth a great deal to the family. The trust removes the exit. No one left has both the right and the reason to sell.

What this is worth to a CMO

Find the point where the company's interest and the stated purpose come apart, and cut in favor of the purpose while it still costs something. Only the 1972 decision was made by someone who could not afford it. That record is what lets the later two read as continuity.

Pull the values page and, next to each line, write the last decision where that value beat a revenue line. Keep the ones with a real entry. Delete the rest.

Give one senior person standing to call the purpose campaign a gimmick until it has an operation behind it. Ridgeway changed what the board was voting on. Give your campaign the same test: a repair program or a product line you stop selling, something that shows up in operations. Otherwise it is a slogan.

Chouinard's problem was the next owner. You will not restructure your company's equity, but you can write the commitment into something harder to undo than a brand book, like a pricing floor the CFO has signed. Ask what the next chief executive could reverse with a memo, and move the commitment out of reach of one.