Reference no: EM132183707

Yvon Chouinard was an accomplished mountain climber in the 1960's,successfully ascending Peaks throughout the world. To support his climbing activities, he began selling mountaineering equipment out of the back of his car. This endeavour evolved into Chouinard Equipment, a ful l- service climbing gear manufacturing and sales operation located in Ventura, California.

Chouinard increased sales volume by importing rugby shirts, gloves, hats, and other clothing

From Europe and New Zealand. Soon, the focus turned to manufacturing clothing, and in 1973 the Patagonia clothing company was born. The business struggled at first, but by themid-1980s sales began to increase, growing from$20million to over $100million by 1990.

Today, sales volume at Patagonia is around $250million per year, and the company makes a wide range of products from outdoor clothing and travel gear to fishing equipment. Chouinard never aspired to be an executive, but he soon found himself facing business challenges as the founder and owner of an expanding company.

Despite the growth, he held fast to the values of teamwork and camaraderie he had enjoyed as a mountaineer. Employees at Patagonia dress as they please (often in t-shirts and shorts, sitting barefoot at their desks); surf when the conditions at nearby beaches are good (the daily surf report is prominently displayed in the lobby of the corporate headquarters, and employees can take advantage of the liberal flex time policies); and enjoy company-sponsored ski and climbing trips; a cafeteria serving high quality, healthy food (including a wide range of vegetarian options); a subsidized on-site day care center; and the option to take leave of absence from work for up to two months at a non-profit of their choice, while still receiving their full pay from Patagonia.

These benefits make the company a highly desirable place of employment-on average some 900 people apply for every open position. The company is highly committed to environmental causes and a corporate philosophy to "do no harm." Chouinard and each of Patagonia's 1,200 employees try to make decisions based on the impact that will be felt 100 years from now. That approach requires asking tough questions about manufacturing processes and making the right choices, even if production costs increase.

In the early 1990s,for example, an environmental audit revealed that the chemicals commonly

used for growing and harvesting cotton made it one of the most damaging fibers used by Patagonia. Cotton farming, Chouinard discovered, consumes 25 percent of the world's pesticides on just 3 percent of the world's farmland. As a result, the company switched its entire product line to organic cotton, a decision that ultimately improved profitability.

More recently Patagonia decided to shift from the traditional kind of polyester used to make its fleece jackets to a new type of polyester made from recycled soda pop bottles. It takes 25 soda bottles from land fills to make a jacket; between 1993 and 2003 Patagonia diverted 86million soda bottles from landfills.

How does Chouinard lead the company and drive this environmental mission? Through a hands-on directive approach? No, he uses what he calls his MBA theory-management by

absence. Chouinard travels the globe developing and testing Patagonia products and serving as a crusader for environmental issues. To run his business, he hires employees who will question authority-challenging bad decisions and working with others to seek out the best solution.

As he explains, "the best democracy exists when decisions are made through consensus...decisions based on compromise often leave the problem not completely solved with both sides feeling cheated or unimportant." And the most effective leaders, Chouinard argues, are those who can communicate their ideas to others, not via email, but by talking face-to-face to work out collaborative agreements.

To support this democratic approach, there are no private offices at Patagonia-everyone works in open rooms with no doors or separations. When Chouinard is at the Patagonia headquarters, he does not have a reserved parking spot(such spots are reserved for those who drive fuel-efficient cars) or special perks or office space; he considers himself no more important than others in the organization.

Such treatment would only damage the democratic spirit of the company. Chouinard believes, "find the right balance between the management problems that come with growth and maintaining our philosophy of hiring independent-minded people and trusting them with responsibility is the key to Patagonia's Success.

Questions:

1. What in your understanding is the nature and personality of Yvon Chouinard?

2. Do you feel it is possible to become a leader when confronted with situations? What are the skills required of a person to become a leader?

3. What are the situations and factors that are to be taken into account, if one were to exhibit the leadership quality exhibited by Yvon Chouinard?

4. In today's globalized, competitive world, do you feel the leadership practices followed by Yvon can be applied?

5. What do you feel are the advantages and disadvantage of following Yvon's leadership approach?