Editor's note: Inc. magazine's 2018 Company of the Year is Bird. Here, we spotlight a contender for the title.
On Wednesday, November 7, spirits were high in Patagonia's Ventura, California, headquarters.
"It was a really exciting day--we were very happy," says CEO Rose Marcario.
The outdoor retailer, which is said to have booked $1 billion in revenue last year, managed to persuade more than 400 companies, including Walmart, Tyson Foods, and Lyft, to sign on to its "Time to Vote" campaign, giving employees time off to cast their ballots. More noteworthy, Patagonia also scored two specific political victories in the midterm elections. In a first ever for the company, Patagonia endorsed two candidates, Democrats Representative Jacky Rosen in Nevada and Senator Jon Tester in Montana, for their stances on protecting public lands. Both won their election battles.
Much was made about how unprecedented and bold it was to make the corporate endorsements. For anyone paying attention, however, the move wasn't terribly surprising. After all, it came after Patagonia sued the Trump administration in December 2017 for reducing the size of two national monuments.
It used to be that companies tried to stay neutral on politics; in these deeply polarizing times, that's not much of an option, or even desirable, says Daniel Korschun, an associate marketing professor at Drexel University who studies corporate political activism. "Consumers and employees are looking for deeper purpose from companies," he says.
For Patagonia and its fans, that purpose is doing whatever they can to try to save the planet. In 2018, Patagonia proved that it will not only preach that mission, it will do so with a much louder voice than most other companies. And--so far, anyway--it's only further burnished the Patagonia brand.
The Activist Company
Marcario took up the CEO role in 2014, and since then Patagonia has seen its revenue and profit quadruple. The company won't disclose exact revenue, but the CEO said in March last year that sales were approaching $1 billion. She's helped nurture new lines of business, including its Patagonia Provisions food line, used goods program Worn Wear, and the venture fund Tin Shed Ventures, which has at least $75 million to plow into environmentally responsible startups.
Marcario--whom Patagonia founder Yvon Chouinard has called the best leader the company has ever had--also has helped Patagonia lean further into its self-appointed role as an "activist company." In the wake of Trump's decision on the monuments, Patagonia galvanized the outdoor industry to try to pressure Utah governor Gary Herbert to change his stance on shrinking Bears Ears National Monument. When he didn't budge, Patagonia along with the North Face and REI said they would boycott the annual Outdoor Retailer trade show usually hosted in Salt Lake City. The show, which generates some $45 million in the state, moved to Denver in 2018.
Patagonia's next big move is an idea that came from Marcario and was approved by Chouinard in minutes--like a lot of the company's political initiatives. She calculated that because of Trump's tax cuts, Patagonia will have around $10 million in unexpected profit. The brand plans to donate all of it to grassroots organizations that are fighting the causes of climate change. That's on top of the 1 percent of annual sales that Patagonia already donates to such groups.
Korschun calls the company the "gold standard in corporate activism" because it has consistently aligned itself with issues that make sense for the brand and that its customers care about.
"Many other companies are not as clear about what they stand for," he says. "They sometimes contradict themselves, and engage in fits and starts, which harms some of their message. [When that happens,] they run the risk of being called hypocritical in their actions--that's when you get in real trouble." Case in point: the backlash that ensued after Grubhub CEO Matt Maloney emailed his employees the day after the 2016 election suggesting that employees who would support Trump's policies resign immediately.
Too Uncomfortable Not to Follow
Some industry watchers have criticized Patagonia for taking political stances that are too "uncompromising." While Marcario admits that occasionally the company has heard from customers who don't agree with Patagonia's actions, she says the response has been "overwhelmingly positive." Coming out swinging on things like public land protections and the rollbacks at the Environmental Protection Agency for her are urgent, moral stances.
As such, she does not mince words when it comes to what she thinks about sectors and companies that don't operate with the greater good of the planet in mind. The tech industry? "I'm super disappointed," she says. "There is a huge concentration of wealth there--billionaires who have more than they could ever spend in their lifetime--and I don't see them doing anything. There is no business to be done on a dead planet. Some want to fly to Mars and colonize it--we're more interested in our home planet. I hope they wake up."
As for the growth-at-all-costs mentality: "The quarterly earnings trap is what got us into this mess. That's what's really killing the planet," she says.
Marcario admits that because Patagonia is a privately held company, it has more freedom to be bold in its actions. Even so, she says that if she and Patagonia succeed in their mission, they will "make it hard and uncomfortable for other businesses not to follow our lead."