Patagonia CEO on leading a company with a cause

Ryan Gellert is not a busi­ness leader who dil­ly-dal­lies. Bare­ly a week after his appoint­ment as CEO of Cal­i­forn­ian cloth­ing brand Patag­o­nia in Sep­tem­ber 2020, he was spear­head­ing a hard-hit­ting cam­paign to defend pub­lic land rights in the US. Next, he was sup­port­ing a com­mu­ni­ty ener­gy ini­tia­tive in Europe, fol­lowed by a coali­tion pro­tect­ing cit­i­zens’ access to the vote in the state of Geor­gia.

The activist streak in the 49-year-old Florid­i­an informs his approach to the busi­ness and free enter­prise more wide­ly. While most CEOs enter the job promis­ing growth, growth and more growth, Gellert admits to “wrestling” with the size of the oper­a­tion, which turns over about $1bn (£710m) a year, and how to square that with his views about capitalism’s unde­sir­able effects on the world.

“We are a for-prof­it enter­prise, but we’re com­mit­ted to using our busi­ness to do more than just make mon­ey,” he says. 

Speak­ing in his first UK inter­view since his pro­mo­tion from the role of gen­er­al man­ag­er of the firm’s EMEA oper­a­tions, Gellert has no qualms about blam­ing unre­strained cap­i­tal­ism for the “eco­log­i­cal cri­sis” and many social inequal­i­ties.

As unortho­dox as his stance may seem, it’s effec­tive. In May, his com­pa­ny topped a rep­u­ta­tion rank­ing by Axios and Har­ris Poll of the 100 most promi­nent brands in the US. The next cloth­ing com­pa­ny on the list was Adi­das – in 49th place. 

So what’s the secret of Patagonia’s mar­ket­ing suc­cess? And what can oth­er brands learn from its ascent from niche ven­dor of climb­ing kit to glob­al­ly admired cloth­ing label?

Getting brand purpose right

Gellert baulks slight­ly at Patagonia’s sta­tus as a mar­ket­ing case study, yet it’s rou­tine­ly cit­ed as an exem­plar in how to achieve a win­ning brand pur­pose. Part of the rea­son for this is the con­tin­u­ing influ­ence of its founder and own­er, Yvon Chouinard. 

Gellert may be free to set the company’s strate­gic com­pass, but the 82-year-old for­mer rock climber remains Patagonia’s vision­ary in chief. A life­long envi­ron­men­tal­ist, Chouinard pledged in 2002 to donate 1% of his firm’s sales income each year to grass-roots envi­ron­men­tal char­i­ties. It was also his idea to do the same with the sav­ings the com­pa­ny achieved because of the cor­po­rate tax cuts enact­ed by the Trump admin­is­tra­tion. 

Clear­ly, not all brands can imi­tate Patag­o­nia in claim­ing that they’re “in busi­ness to save our home plan­et” – and nor should they, Gellert says. To be “authen­tic”, a com­pa­ny must analyse its own mar­kets, offer­ings and cus­tomers before iden­ti­fy­ing its guid­ing pur­pose. 

You sim­ply can’t fake it, he warns. “As an indi­vid­ual, you don’t wake up each morn­ing and say: ‘What does the world want me to be?’ The same applies to busi­ness­es.” 

For that rea­son, Gellert is cau­tious about plac­ing too much empha­sis on the com­mer­cial ben­e­fits of brand activism. Ide­al­ly, he says, a firm should be close enough to its cus­tomer base that the pub­lic posi­tion­ing of the for­mer match­es the beliefs of the lat­ter, there­by cre­at­ing a vir­tu­ous, rep­u­ta­tion-enhanc­ing cir­cle.

If we feel strong­ly about an issue, then we have an oblig­a­tion to step for­ward

A prime exam­ple of this is Patagonia’s remark­able ad cam­paign dur­ing the Black Fri­day pre-Christ­mas sales peri­od of 2011, which told shop­pers ‘Don’t buy this jack­et’, just as most retail­ers were offer­ing huge dis­counts. The idea was to encour­age con­sumers to repair their old clothes rather than always buy­ing new. It actu­al­ly led to a spike in sales.

Patag­o­nia knows that hav­ing the courage of its con­vic­tions will alien­ate some poten­tial cus­tomers, but it’s clear­ly rec­on­ciled to that prospect. In 2019, for instance, the firm antag­o­nised many anglers by cam­paign­ing against arti­fi­cial salmon breed­ing in a fea­ture-length doc­u­men­tary, Arti­fishal. While it knew that the move would harm the sales of its fish­ing gear, it went ahead all the same. 

“How­ev­er uncom­fort­able it may be, if we feel strong­ly about an issue – and if that issue lad­ders back to our rea­son for being – then we have an oblig­a­tion to step for­ward,” Gellert says.

It’s not a strat­e­gy for the faint-heart­ed. Last sum­mer, Patag­o­nia pulled all its adver­tis­ing from Face­book and its Insta­gram sub­sidiary because of its dis­sat­is­fac­tion with the former’s efforts to tack­le hate speech and fake news. Gellert admits that this deci­sion reduced “eye­balls on our mes­sag­ing” and has made it hard­er to reach con­sumers. But he insists that the firm’s approach to mar­ket­ing is what brings “ener­gy, com­plex­i­ty and excite­ment” to the brand. 

It has a pos­i­tive impact on staff, he says, who often join Patag­o­nia because of its activism. It also lands well with its loy­al cus­tomers, many of whom have almost come to expect the com­pa­ny to make a nui­sance of itself. 

The imperfect activist

Anoth­er rea­son why brand activism is so hard to get right is that it puts a com­pa­ny at risk of being accused of hypocrisy. When­ev­er a firm pub­licly crit­i­cis­es anoth­er enti­ty, in effect it’s invit­ing every con­sumer, jour­nal­ist and com­peti­tor to start muck­rak­ing.

With this fac­tor in mind, Patag­o­nia works hard to ensure that it can take a stand and remain on the moral high ground while doing so. For instance, it uses 100% organ­ic cot­ton and includes recy­cled fab­rics in two-thirds of its prod­ucts. 

This doesn’t mean that the com­pa­ny has found all the answers. Its use of petro­le­um-based mate­ri­als remains an issue. Sell­ing nylon back­packs and plas­tic sun­glass­es, the brand is still wed­ded to the fos­sil-fuel econ­o­my it so read­i­ly berates. 

Indeed, the brand’s refusal to sell its fleeces to oil com­pa­nies prompt­ed a Wall Street Jour­nal read­er to write a let­ter denounc­ing Patagonia’s “self-sat­is­fied envi­ron­men­tal snob­bery” as “hypocrisy mas­querad­ing as virtue”.

We must con­stant­ly fig­ure out how we can use this busi­ness to cham­pi­on the issues we care strong­ly about

The con­ven­tion­al advice in such sit­u­a­tions is twofold: be hon­est about any short­com­ings and be clear about how these are being addressed. Patag­o­nia does both. Regard­ing the first, it states on its web­site that “every­thing we make has an impact on the plan­et”, but that it’s work­ing to mit­i­gate that impact. As for the sec­ond, it reports the per­cent­age of petro­le­um-based fab­rics in its over­all cloth­ing range every year.

Gellert con­cedes that the dif­fer­ence between Patagonia’s low-impact ambi­tions and its con­sid­er­able foot­print presents an inher­ent “con­tra­dic­tion” that can­not be ignored.

“This keeps us on our toes. We must con­stant­ly fig­ure out how we can lessen our impact, how we can scale up solu­tions and then how we can use this busi­ness to cham­pi­on the issues we care strong­ly about,” he says.

When­ev­er Patag­o­nia works with grass-roots cam­paign groups, it tends to keep its brand in the back­ground so as not to hog the lime­light. The excep­tion is when its mar­ket­ing clout might give the cause a cru­cial boost. Take the Balka­ns, where many of Europe’s rare free-flow­ing rivers face being dammed for hydro­elec­tric pow­er projects, whose envi­ron­men­tal costs would far out­weigh the ben­e­fits. With oppo­si­tion from local activists fail­ing to make an impact, Patag­o­nia has put its mar­ket­ing mus­cle behind their cause (see the “Patag­o­nia Films” pan­el).

What­ev­er the lev­el of sup­port pro­vid­ed, it’s cru­cial that the brand-cam­paign­er rela­tion­ship stays non-com­mer­cial, accord­ing to Gellert, who says: “You’re not going to see it splashed across our home­page.”

The same goes for work­ing with oth­er brands. Gellert’s recent denounce­ment of Georgia’s bid to impose vot­ing restric­tions, for instance, was part of a cam­paign co-found­ed with Levi’s and Pay­Pal. The ‘Time to Vote’ ini­tia­tive now has about 2,000 oth­er cor­po­rate sig­na­to­ries. 

An advo­cate of “talk­ing straight” in cor­po­rate com­mu­ni­ca­tions, he argues that terms such as ‘pur­pose­ful’, ‘respon­si­ble’ and ‘regen­er­a­tive’ are now so “coopt­ed” that they’ve become almost mean­ing­less. “When com­pa­nies that use organ­ic cot­ton in the trims of some of their T‑shirts start talk­ing about ‘sus­tain­able col­lec­tions’, it’s bull­shit. And it’s not bull­shit by acci­dent; it’s bull­shit by intent.”

In the case of ‘regen­er­a­tive’ cot­ton specif­i­cal­ly, Patagonia’s solu­tion has been to set up a robust cer­ti­fi­ca­tion sys­tem under the aegis of the Regen­er­a­tive Organ­ic Alliance. That way, shop­pers can be sure that the Regen­er­a­tive Organ­ic prod­ucts they are wear­ing are the real deal. 

Next, Gellert says brands need to pick their caus­es care­ful­ly and be care­ful not to jump into every cam­paign going. Once you’ve cho­sen one, he says, offer it a cred­i­ble plan of action. Clever tweets and catchy ads have their place, but this work needs to be baked into the busi­ness mod­el and strat­e­gy. Patagonia’s approach to doc­u­men­tary film­mak­ing is a case in point. Behind every new release comes a series of fol­low-up actions, from town-hall-style debates through to par­lia­men­tary peti­tions. 

Talk of peti­tions brings the con­ver­sa­tion round to pol­i­tics, a sub­ject that few brands seem will­ing to dis­cuss pub­licly. Patag­o­nia is dif­fer­ent. Brands, like cit­i­zens, oper­ate as a part of a wider ecosys­tem, he says, so efforts to effect change even­tu­al­ly encounter struc­tur­al bar­ri­ers that only leg­is­la­tors can fix. 

While play­ing pol­i­tics is undoubt­ed­ly a dicey game for brands, Gellert believes that there’s more room for con­sen­sus than many peo­ple might imag­ine. The bearpit of par­ty pol­i­tics aside, most peo­ple broad­ly want the same things, he rea­sons, adding: “The more we can fig­ure out where those basic val­ues unite us, the more effec­tive we can be.” 

Not every CEO has as much free­dom as Gellert to express an opin­ion. In the same month he start­ed in the job, pairs of Patag­o­nia shorts began mys­te­ri­ous­ly appear­ing with a stitched tag read­ing ‘Vote the ass­holes out’, clear­ly refer­ring to the Trump admin­is­tra­tion. This sort of thing would push most com­pa­nies into full-on cri­sis mode, but Patag­o­nia is dif­fer­ent from most com­pa­nies. Chouinard sim­ply said: “These are great. I need a pair in size 32.”Gellert con­cedes that brand activism is a tougher task for com­pa­nies with­out such “enlight­ened lead­er­ship”. But he con­cludes that “the absence of an own­er like Yvon is no excuse for you not to work out how to play a role in the busi­ness world that goes beyond lin­ing your pock­ets”.

---