Saturday, April 19, 2008

Cool place to work....

Today's New York Times has an excerpt from an upcoming book The Big Squeeze: Tough Times for the American Worker by Steven Greenhouse described as "(an examination of the) difficulties faced by workers at companies like Fed Ex and Wal-Mart, and points to Patagonia and Costco as models for corporate America." Look at the following description of Patagonia:

Patagonia is not like anywhere else. With 1,300 workers and $275 million a year in sales, it donates 1 percent of its annual sales to environmental groups. Four days a week at lunchtime, the company offers yoga and Pilates sessions; there are also occasional classes on fly fishing. Each year Patagonia lets 40 employees take paid two-month internships with an environmental group. The best spots in the parking lot are reserved for the most fuel-efficient cars, and above dozens of parking spots are solar panels that supply all the power for one of Patagonia’s administration buildings.

Patagonia has 900 applicants for every job opening at headquarters. It sponsors civil disobedience training for employees who want to participate in environmental protests. Its mission statement calls for making the best outdoor products while doing the least damage to the environment. Its Synchilla fleece vests are made from recycled plastic bottles.

While $275 million in sales seems impressive, when compared to the stalwarts of public companies it's revenue per employee pales to other companies (though I did not do a direct segment to segment comparison) at $210,000. For instance, GE regularly posts $500,000 revenue per employee, and Cisco delivers $625,000 per employee. These are the kind of results that public companies are pressured to deliver, and the kind of benefits that Patagonia offers works best in private companies. In fact, Yvon Chouinard directly addresses this point in an interview at Stanford Graduate School of Business.

Chouinard says his resistance to the runaway growth that would ultimately land his company on the IPO track comes back to his environmental mission. There are limits to how much organic, recyclable clothing a company can make. He argues that going public would force expanding production to the point he would have to abandon his standards. "It would be committing suicide, going against almost everything I believe in."

One final counterintuitive practice of particular interest to Business School students: Chouinard rarely hires a business school graduate. Counting "less than a handful of MBAs" among his 1,200 employees, he reasons that sometimes the best business people are students of another discipline.

"None of us ever wanted to work in business; it just happened," he said. "For me, breaking the rules and making it work, that's the fun part of business."

For those struggling with a reason to go to work, Patagonia's mission seems to make it easier. Private is not always hampered either, there are exceptions. For instance, privately held delivers an astonishing estimated $6.25 Million (yes that's an M) in revenue per employee.


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