Patagonia, Inc.
If you are an outdoorsman, then I don’t have to tell more about Patagonia. Yes, they are a successful brand name in worldwide markets. It was founded by a rock climber named Yvon Chouinard. His love of nature and his dissatisfaction over some rock climbing equipment, lead the way for his innovative creativity. He created or let’s say modified the existing rock climbing equipment in terms of nature friendliness, efficient and reliability, thus founding Chouinard Equipment, Ltd. It had an estimated 80% of the U.S. markets during the 1960’s. Besides this, he also started focusing on the clothing line of quality outdoor clothes and named it Patagonia, Inc. All the Patagonia products were ensured of high quality, durability and reliability. By the 1980, their sales were increasing rapidly, also thanks to the breakthroughs in new fabrics. Moreover, they also started the mail order business, the forefather of online sales and it brought in more profits to the company.
However, fast they were growing or more profitable they were becoming, Patagonia had a humble beginning with yet humble mission statement: “Make the best quality product and cause no necessary harm.” It simply relates to a caring idea of the founder Yvon Chouinard, who loved nature. He also focused on quality as a priority for his company’s mission as a whole. He once stated, “It’s linked, quality product, quality customer service, quality workplace, quality of life for your employees, even quality of life for all living things on this planet. If you miss any one piece there is a good chance you’ll miss it.”(Page 111, Management control systems, Merchant K., 2003) This statement of his explains it all it terms of corporate culture at Patagonia, Inc. Since, this corporate culture focuses more on the humanitarian factors and less on the financial and accounting sectors. Due to which Patagonia experienced the financial downturn in 1991 and had to lay off 20% of their work force. Therefore, to better manage their company on both financial sector and human factor, they implemented the process called “the workforce process”, which was already in existence in their mail order department.
The workforce process consisted of four factors. They are:
1) Making every department’s and the corporation’s plan visible to all employees,
2) Making monthly department and corporate financial and operating reports visible to all employees,
3) Investing substantial time and resources to train every employee in financial management so that they would understand the information made available to them, and
4) Encouraging all employees to become actively involved in the planning and operating review processes.
The very goal for this process is to help employees understand their very role within the strategy of the company, to encourage them in sharing each-others resources and objectives and put them into consideration while planning, and finally, give them enhanced sense of control over their destiny. A very humbling process towards their employees but it is not without drawbacks. Some embraced it and some resented it.
Many managers resented the fact that this “Workforce Process” will give reduce their controlling and decision making power. This completely reduces the leverage power of the department mangers that I believe is one of the best tool to rightly manipulate your employees to achieved his/her departments targets. This made few managers not to believe in the process as a whole, which also had a negative impact on the employees because they did not believe in it to participate at all. It will also weaken the company’s security systems by declassifying all the information to all their employees, who possibly could be a rival corporate spy. The process was also very costly. This process required lots of paperwork, took lots of time and efforts from each individuals involved, and to keep up with the process and also monitor them, there were intensive meetings of workgroups and subgroups.
There were also other concerns such as, in terms of incentives and how can it be decided fairly. Also the objectives and plans to achieve it were considered vague by most employees. And, the timing period of the entire process was not clear to most.
Therefore, to better themselves within their own company and still hold on to their culture and mission statement of the company, I believe that they should be very clear onto what their objectives of the company as a whole and the objectives of each department. They should also come up with the fair and well planned incentives programs to motivate their employees to get them interested and more involved in this process. I believe sharing information between departments are great idea but getting involved in achieving in other departments goals than their own will eventually confuse of his/her very role and goals. Therefore, every individual should have a very clear idea as to which departments they are involve to and what’s its very goal. Frequent training regarding any changes made is also good ways to sharpen the employees and keep them up to date on the latest. Computerization of the entire process would also be accepted with open arms. It also helps reduce the paper usages, which strengthens the company’s very core value towards protecting nature. The employees would also appreciate if the monthly financial figures would be published sooner than a month or two after the months end. This would give employees a better, clear and latest data to follow through in their workforce process decision making. Finally, in my experience as a manager, I would get my employees involve in suggestions to better their job performance, increase sales, about incentives, and customer care. However, the final decision is to be made by managers. Because, access to company records and classified information are not relevant to their very job description. It is always in the best interest of everyone involved if objectives of the job and jobs descriptions are made cleared. All employees are fairly treated with respect with well- planned incentives as a motivational factor.