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It has been more than 40 years since Yvon Chouinard founded Patagonia out of his little blacksmith shop in Ventura, California. Back then, Chouinard developed clothing and gear inspired by his love of the outdoors. Over the years, the company has swelled to 1,350 employees and $540 million in annual revenue, but Chouinard, 74, is the same plucky entrepreneur. Though he manages to avoid using email or most modern gadgets, Chouinard continues to push Patagonia to be an innovator in the areas of corporate responsibility and environmental sustainability. He still tinkers in his blacksmith shop. And he frequently disappears to climb mountains in Europe or to enjoy good surf near the company's headquarters--and calls it work. --as told to Liz Welch

I hate the idea of managing people. I don't like people telling me what to do, so I can't stand to tell other people what to do. I purposely try to hire people who are really self-motivated and good at what they do, and then I just leave them alone.

I have two homes: one in Ventura, California, and the other in Jackson Hole, Wyoming. I split my time between them. If I'm in California, and the waves are good, I'm surfing by 7 a.m. If the surfing is good, I might stay out all day. I like being able to see the horizon. When I am sitting in the water facing Antarctica, waiting for a wave, it opens up my mind.

When I'm in Ventura, I usually come to the office every day. I usually start by taking care of correspondence. My assistant, Mike Dunn, helps me with that. I don't have a computer, so I don't respond to email. Also, I think email is impersonal. I prefer to handwrite letters and speak to people on the phone.

I mostly correspond with entrepreneurs or customers who have read one of my books. I wrote my first book, Let My People Go Surfing, for my employees. It's about the history of the company and our philosophy. We used to do five-day courses with 15 employees at a time, and I would talk about why we do things the way we do. It got too time-consuming as we grew. So people get a copy when they start working here.

I spend very little time working on the clothing lines these days. They are totally set up and running smoothly. But if I'm not creating something, I feel stagnant. I'm always working on odd side projects. My old blacksmith shop is here on campus--that's where I made the rock-climbing pitons back when we first created the company. It's still where I spend a lot of my time, tinkering.

Right now, I'm developing a superefficient camp stove that weighs a few ounces and burns little sticks. Usually, when you heat a pot on a camp stove, only 20 percent of the heat is actually being used. I want to get that to 80 percent efficiency. I've been working on a prototype with a machinist. I want it to be something that could be used by a backpacker as well as a woman in Mali who has to walk five miles a day to find wood for her open fire. Before that, I created a fly-fishing boot with aluminum bars on the sole that works well on slippery rocks.

I am the entrepreneur who comes up with the wild and crazy idea and then dumps it on people to let them figure it out. I often pop into the sewing room downstairs, which we call the forge. This is where some of our garments are prototyped. They can make anything there. The other day, I asked them to make me a surfing hat. I don't have much hair on the top of my head, and I always forget sunscreen. I think many people need a surf hat that won't fall off. They made two of them, both of which will become Patagonia products. Once the prototype is done, I get to try it out. That's the best part of the job. I do that with most of our outerwear and gear. So when I go to Europe to climb or South America to fish, it's business.

If I'm not in my blacksmith shop or in my office, I'm walking around. The worst managers try to manage behind a desk. The only way to manage is to walk around and talk to people. But I don't just walk around asking, "How are things going?" I have some specific thing in mind that I want to talk to that person about. I meet most often with Casey Sheahan, our CEO, and Rose Marcario, our CFO and COO. I also get monthly reports from the heads of marketing, e-commerce, and other divisions. I always want to know what is not going well, so we can fix it.

Mainly, my job is to be on the outside and bring ideas into the company and forge change. Most people hate change--it's threatening. I thrive on it. Lately, I've spent a lot of time thinking about how to stay competitive with the many other companies out there that specialize in one sport. We're a generalist outdoor-clothing company--we make clothing for surfers, climbers, skiers, and runners. How do we focus our little surf division so it can compete with the billion-dollar surf companies out there?

I think we could market each product line better if that was our only business. So I'm shaking things up. I am taking all our different product lines, like surf or skiing, and giving the manager of each division way more responsibility than he had before. Now, each manager will handle all the buying. Instead of having a general marketing department, each line will have its own marketing person who stays on top of that individual market.

When you have a lot of independent people working for you, you can't tell them what to do, or you will get a passive-aggressive response. Instead, you have to build a consensus. My job is to communicate why the change is necessary and how it's the right thing for the company. I do that by holding all-company forums. We wire in our Reno, Nevada, warehouse and offices in Europe and Japan. I encourage people to ask questions then and there or to come see me in my office whenever.

When I'm in the office, I always eat lunch with the staff. We serve a subsidized healthy lunch daily in our café. Not only are we feeding our employees good food, but we are building a community, too. Socializing is important. We also have on-site child care for our employees. That was my wife Malinda's idea, and it was radical when we first introduced it, in 1981. It really does take a village to raise a child, and we don't live in villages anymore. So companies need to be more like villages. I think the kids who come out of here are Patagonia's best products. Some kids with stay-at-home mothers hide behind Mother's skirt if you say hello. The kids here stick their hand out. They're so confident.

These days, I spend a lot of time thinking about ways Patagonia can be even more transparent. When we first started the company, there was no such thing as quality control. Then, Nike got caught in a child-labor issue. We got together with Nike and several other companies and started the Fair Labor Association, which visits factories to check up on labor practices. We also do our own checkups, but it's impossible to be perfect.

Recently, animal-rights activists in Germany accused us of getting our down from geese that were being live plucked. We sent two people to Hungary to check it out. They said, "The good news is, we're not live plucking geese. The bad news is, the geese are being force-fed for foie gras." We didn't cover that up or spin it--we told the truth and found another source of down. It doesn't work any other way. Plus, we want other companies to be more transparent. The only way to lead is by example.

We give away 1 percent of our annual sales to 650 environmental organizations through our 1% for the Planet program. Craig Mathews, the owner of Blue Ribbon Flies, and I came up with the idea in 2001. Today, more than 1,800 companies have joined. Investing in the well-being of our planet makes good business sense.

As a company, we've made a contract with our customers to make clothing as responsibly as possible. That includes asking customers to think twice before they buy anything. Do you really need it, or do you just want it? If you really need it and buy from us, we promise to fix it, no matter what. I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money. Our customers know that--and they want to be part of that environmental commitment. We're producing a series of videos to show customers how to fix things themselves. We're even going to make a little sewing kit. We want people to feel like that jacket is something they're going to have the rest of their lives. And if it does get worn out, send it back to us, and we'll use it for something else. We want to close that loop between consuming and discarding.

Lately, we've been working on a sustainability index. For instance, it takes 185 gallons of water to grow the cotton to make a T-shirt. And it makes a difference where the water comes from. Is it from a dam that has displaced lots of people and destroyed a river? Once we determine that, we try to buy cotton from areas where it rains. Then we publish all of that information on our website. It's called the Footprint Chronicles. My goal is that this approach will become standardized, and clothing will be graded based on working conditions, biodiversity, and carbon footprint. I think this is going to change the apparel business the same way that organic standards have changed farming.

I've been interested in food for 40 or 50 years, and I'm just now focusing my attention on it. I want to change the way people are eating. A few years ago, I was asked to talk at a sustainable- seafood conference. In my presentation, I said, "You people in this room have no idea where your fish even comes from." And everybody guffawed. But when people catch fish in the ocean, they don't know where it originated. And when they put out big nets to catch pink salmon, they also catch endangered chum salmon. You have to release them, but they're already dead.

I thought I had wasted my time at that conference, but it gave me the idea to start Patagonia Provisions. I opened a salmon plant in British Columbia. We buy salmon from natives who fish with lines, selectively, so they release the endangered fish. We have a superior product that's as sustainable as possible. It sends a message to the fishing industry: This is the way it should be done. We started with salmon jerky. Hot smoked salmon is next. We're also going to make all-organic fruit and nut bars. It's the same approach we have taken with our clothing--full disclosure about where and how the product is sourced.

I usually leave the office around 3 p.m. When I'm home, I cook dinner most nights. I have to do something with my hands, especially if I've been sitting around all day. Otherwise, I get funky. I like to chop vegetables. I spend a lot of time in my garden in Ventura. I've got raised beds and phenomenal compost, which I could talk about for hours.

From June to October, I'm in Wyoming getting my mountain fix. I call into the company about twice a week to keep up with what's going on. Behind every Luddite is a woman with a computer. That's my wife, Malinda. When I get near a computer, the thing breaks down. I don't really use a cell phone, either. I went without one for the longest time, and then I got stuck in the Reno airport. The person who was supposed to pick me up wasn't there. I had to beg a cop to use his cell phone and then ask him how to use it. So Malinda got me a phone. But I've never received a call, because I've never turned it on.

When I'm in Jackson Hole, I'm out hiking or fishing every day. I'm trying to simplify my life. Everything pulls you to be more and more complex. I've gone back to the fly-fishing that was done in the 15th century, with just a pole and a line on the end with a fly--no $1,000 graphite rod or $500 reel. I love the idea of adapting myself to a situation rather than buying a lot of stuff. People don't need fancy stuff--they need gear that lasts and that works well. I've built my company based on that.

***

On environmental sustainability
"I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money."

On managing change
"When you have a lot of independent people working for you, you can't tell them what to do, or you will get a passive-aggressive response. Instead, you have to build a consensus."

On subsidized lunches
"Not only are we feeding our employees good food, but we are building a community, too. Socializing is important."

On leadership
"The worst managers try to manage behind a desk. The only way to manage is to walk around and talk to people."

On his role
"I am the entrepreneur who comes up with the wild and crazy idea and then dumps it on people to let them figure it out."