Kris Tompkins, Former Patagonia CEO: "Impact is What Counts"
Kavitha Venkatraman (WG'09), Staff Writer
Issue date: 10/29/07 Section: News
Kris Tompkins is the former CEO of
Patagonia, the maker of climbing and
skiing apparel. She now lives in Chile
where she works primarily on large scale
land conservation.
What does it take for more than 200 students at a school like Wharton, where there are always 10 different ways to spend any hour of their day, to gravitate together to listen to a speaker like Kris Tompkins, about an environmental and social issues?
You could call it a shift in environmental consciousness; you could call it the enigma of seldom discussed topics, or simply the attraction of listening to a self-made entrepreneur. Call it what you want, but it could have well been an enlightening and deeply introspective hour and a half for the students who attended this leadership lecture.
Ms. Tompkins started off with a dash of self-deprecating humor about graduating from college with a degree in history while all along she was under the impression that she was majoring in sociology, which left her clueless about what she wanted to do after college.
In 1972 she joined Yvon Chouinard, founder of Chouinard Equipment, makers of rock climbing and ice climbing equipment. Being a ski racer herself, in 1973-74 she realized the need for climbing and skiing clothes and thus Patagonia was born. Patagonia started off as a company of six people who tried to create a working environment in which they would enjoy working.
She admits to their impression of businessmen as corrupt and evil. She and her colleagues considered themselves "unhireable" which defined the spirit in which they created Patagonia. Although they did have to conform to some universal aspects of business, they managed to keep Patagonia a company that ran in parallel to their hopes and dreams as far as ethics and values were concerned.
In 1980 they came up with the idea of donating 10 percent of their profits to radical segment environmental organizations such as Earth First! Having helped to pollute the earth, they believed that they must do something to equalize the effects of polluting.
This was also a way to act as a model for other businesses as a business that reflects their own ethics. In 1984 they realized that whether a business was profitable or not they were still polluting and they must pay something like an earth tax. Hence they formed what was called the One Percent for the Planet Club where they donated 1 percent of revenue rather than profits to environmental causes.
Kris Tompkins' foray into the realm of environmental conservation is very unusual. In 1983 while driving between Munich and Northern Italy she noticed that the in forest before entering Austria all trees were in neat rows. This was "a moment of gestalt" for her when she realized that most of the forests in Europe are just manmade plantations and not real forests. She says that we are urban people, very displaced from nature and it is tough for us to see what's going on in the environment.
At an inflection point in their lives, in 1993, when she and her husband were emotionally and ethically exhausted from business life, she sold her stake in Patagonia to her partners and moved with her husband to Chile with just two bags. In Chile they have three family foundations through which they have managed to put 2.2 million acres into permanent protection. They have created two national parks including the first coastal national park in Chile. The third national park, Patagonia National Park, is under construction now. She considers herself blessed for having created companies they are proud of and for using third phase of her life to work for the non-human world while, at some level, improving the human world as well.
When asked about the pains of growing a business and carrying through the difficult times in the company, she spoke about the biggest problem ever faced by Patagonia. In 1990 Yvon Chouinard and Ms. Tompkins decided that they wanted to try different things. They hired a whole array of CXOs and followed it up with several mistakes. They simply handed over control to them with only occasional checks. She was working in Europe and Patagonia went seriously off track.
The new managers extended Patagonia at the banks, put them in markets and grew sales in a way she and Yvon Chouinard would never have done. In 18 months Patagonia, always profitable until then, was on its knees. It was their entire life's work crumbling. She returned and had to work extremely hard during her last two years at Patagonia to bring it back to shape. This experience she says, taught them how fragile things are, how just a few wrong decisions can sink something very quickly. They had to fire 120 people at once. This was a big deal for Patagonia but it was a decision they had to make just to keep the business afloat.
Commenting about the impact of Patagonia, she said that Patagonia has served as a model for business but its impact is very difficult to truly assess. There are certainly companies that are directly philanthropic to the social cause such as the companies in the One Percent for the Planet Club. The impact is so small but is growing.
In terms of philanthropic and environmental work, Patagonia has emerged as a product leader. But she claims that they were on a losing team and every time an acre of land is saved, hundreds of thousands are being mowed down in the Amazon, thousands of species are going extinct. So the overall effect is not noticeable. "But that does not stop you. You keep waking up and going on every morning", she says.
She says that there were four key factors that led to the success of Patagonia. First, they shared the attitude that nothing is impossible. Second, they had no business background and were not beholden to any theory- they made it up as they went along. Third, they had nothing to lose, no inherited wealth.
Finally, they were determined to be a success and were more worried about quality than money or volume. She credits herself with the single trait of getting things done no matter what it takes. Yvon was the visionary, getting things done was her job, she puts herself through what she calls the "Birdy Business School" every time she looked for great people, heads of giant banks in LA, she did everything it took to get the help she needed. They had great aspirations for themselves and for Patagonia. They had a very low fear factor and never thought about failing. "Which may have been stupid..." she says
One of the questions asked was, "What leadership skills did she need to have to stave off the temptation to become more profitable or grow faster and transition into running a foundation?"
She said that while Patagonia was aggressive environmentally and progressive socially, financially they were very conservative. "You have to be committed to your ideals, don't barter with them. You cannot live in a moral vacuum", she says. "There are many great companies. It's not rocket science to be successful in business.
To build a business that inspires people and to do something with your life that you are proud of when you look back is leadership. People don't look up to you unless there is not more to your business than money. So take hard stances, be a part of something that is not just making money".
What was arguably the best question came from a wizened gentleman who asked "If Coke gave 1% of their revenue, how much good can they do? What they do to the inner biological environment is exactly what you are trying prevent for the outer environment. Is it really good to be fooling the public that you are green when you are as brown (talking about teeth) as you can get?"
"I'm desperate", she says. The real question is: What is better? Taking 1% of Coke's roughly $120 billion revenue and helping direct those funds into species restoration or salvation? Or because it is a nasty product, do nothing at all? Her personal philosophy was to take the money, don't worry about greenwashing, but support good environmental work instead. "There is nothing left to green-wash anymore. The impact is what counts and I would do it", was her verdict.
Parting advice to the students... "When you leave B-School you will know about global warming and the extinction crisis. When you know, you know. You have an ethical responsibility to do something about it.
The ones who incorporate these difficult decisions into their lives and hold on to it are, in my opinion, the future leaders. You are in a tough situation. You are well schooled, can get great jobs, great money.
I would just hope that you would give yourself some latitude to think about what your personal ethics are. Chip away against the common cultural norm of 'Run out, get what you can and to hell with whatever your leave in your path'. Tough luck! You are in 2007 and not in 1976. The luxury of education comes with the enormous responsibility of doing something with it. I feel this responsibility to do something with my life and they have me up here talking to you, so it must mean something..."
The video of the complete lecture is available on Spike.
What does it take for more than 200 students at a school like Wharton, where there are always 10 different ways to spend any hour of their day, to gravitate together to listen to a speaker like Kris Tompkins, about an environmental and social issues?
You could call it a shift in environmental consciousness; you could call it the enigma of seldom discussed topics, or simply the attraction of listening to a self-made entrepreneur. Call it what you want, but it could have well been an enlightening and deeply introspective hour and a half for the students who attended this leadership lecture.
Ms. Tompkins started off with a dash of self-deprecating humor about graduating from college with a degree in history while all along she was under the impression that she was majoring in sociology, which left her clueless about what she wanted to do after college.
In 1972 she joined Yvon Chouinard, founder of Chouinard Equipment, makers of rock climbing and ice climbing equipment. Being a ski racer herself, in 1973-74 she realized the need for climbing and skiing clothes and thus Patagonia was born. Patagonia started off as a company of six people who tried to create a working environment in which they would enjoy working.
She admits to their impression of businessmen as corrupt and evil. She and her colleagues considered themselves "unhireable" which defined the spirit in which they created Patagonia. Although they did have to conform to some universal aspects of business, they managed to keep Patagonia a company that ran in parallel to their hopes and dreams as far as ethics and values were concerned.
In 1980 they came up with the idea of donating 10 percent of their profits to radical segment environmental organizations such as Earth First! Having helped to pollute the earth, they believed that they must do something to equalize the effects of polluting.
This was also a way to act as a model for other businesses as a business that reflects their own ethics. In 1984 they realized that whether a business was profitable or not they were still polluting and they must pay something like an earth tax. Hence they formed what was called the One Percent for the Planet Club where they donated 1 percent of revenue rather than profits to environmental causes.
Kris Tompkins' foray into the realm of environmental conservation is very unusual. In 1983 while driving between Munich and Northern Italy she noticed that the in forest before entering Austria all trees were in neat rows. This was "a moment of gestalt" for her when she realized that most of the forests in Europe are just manmade plantations and not real forests. She says that we are urban people, very displaced from nature and it is tough for us to see what's going on in the environment.
At an inflection point in their lives, in 1993, when she and her husband were emotionally and ethically exhausted from business life, she sold her stake in Patagonia to her partners and moved with her husband to Chile with just two bags. In Chile they have three family foundations through which they have managed to put 2.2 million acres into permanent protection. They have created two national parks including the first coastal national park in Chile. The third national park, Patagonia National Park, is under construction now. She considers herself blessed for having created companies they are proud of and for using third phase of her life to work for the non-human world while, at some level, improving the human world as well.
When asked about the pains of growing a business and carrying through the difficult times in the company, she spoke about the biggest problem ever faced by Patagonia. In 1990 Yvon Chouinard and Ms. Tompkins decided that they wanted to try different things. They hired a whole array of CXOs and followed it up with several mistakes. They simply handed over control to them with only occasional checks. She was working in Europe and Patagonia went seriously off track.
The new managers extended Patagonia at the banks, put them in markets and grew sales in a way she and Yvon Chouinard would never have done. In 18 months Patagonia, always profitable until then, was on its knees. It was their entire life's work crumbling. She returned and had to work extremely hard during her last two years at Patagonia to bring it back to shape. This experience she says, taught them how fragile things are, how just a few wrong decisions can sink something very quickly. They had to fire 120 people at once. This was a big deal for Patagonia but it was a decision they had to make just to keep the business afloat.
Commenting about the impact of Patagonia, she said that Patagonia has served as a model for business but its impact is very difficult to truly assess. There are certainly companies that are directly philanthropic to the social cause such as the companies in the One Percent for the Planet Club. The impact is so small but is growing.
In terms of philanthropic and environmental work, Patagonia has emerged as a product leader. But she claims that they were on a losing team and every time an acre of land is saved, hundreds of thousands are being mowed down in the Amazon, thousands of species are going extinct. So the overall effect is not noticeable. "But that does not stop you. You keep waking up and going on every morning", she says.
She says that there were four key factors that led to the success of Patagonia. First, they shared the attitude that nothing is impossible. Second, they had no business background and were not beholden to any theory- they made it up as they went along. Third, they had nothing to lose, no inherited wealth.
Finally, they were determined to be a success and were more worried about quality than money or volume. She credits herself with the single trait of getting things done no matter what it takes. Yvon was the visionary, getting things done was her job, she puts herself through what she calls the "Birdy Business School" every time she looked for great people, heads of giant banks in LA, she did everything it took to get the help she needed. They had great aspirations for themselves and for Patagonia. They had a very low fear factor and never thought about failing. "Which may have been stupid..." she says
One of the questions asked was, "What leadership skills did she need to have to stave off the temptation to become more profitable or grow faster and transition into running a foundation?"
She said that while Patagonia was aggressive environmentally and progressive socially, financially they were very conservative. "You have to be committed to your ideals, don't barter with them. You cannot live in a moral vacuum", she says. "There are many great companies. It's not rocket science to be successful in business.
To build a business that inspires people and to do something with your life that you are proud of when you look back is leadership. People don't look up to you unless there is not more to your business than money. So take hard stances, be a part of something that is not just making money".
What was arguably the best question came from a wizened gentleman who asked "If Coke gave 1% of their revenue, how much good can they do? What they do to the inner biological environment is exactly what you are trying prevent for the outer environment. Is it really good to be fooling the public that you are green when you are as brown (talking about teeth) as you can get?"
"I'm desperate", she says. The real question is: What is better? Taking 1% of Coke's roughly $120 billion revenue and helping direct those funds into species restoration or salvation? Or because it is a nasty product, do nothing at all? Her personal philosophy was to take the money, don't worry about greenwashing, but support good environmental work instead. "There is nothing left to green-wash anymore. The impact is what counts and I would do it", was her verdict.
Parting advice to the students... "When you leave B-School you will know about global warming and the extinction crisis. When you know, you know. You have an ethical responsibility to do something about it.
The ones who incorporate these difficult decisions into their lives and hold on to it are, in my opinion, the future leaders. You are in a tough situation. You are well schooled, can get great jobs, great money.
I would just hope that you would give yourself some latitude to think about what your personal ethics are. Chip away against the common cultural norm of 'Run out, get what you can and to hell with whatever your leave in your path'. Tough luck! You are in 2007 and not in 1976. The luxury of education comes with the enormous responsibility of doing something with it. I feel this responsibility to do something with my life and they have me up here talking to you, so it must mean something..."
The video of the complete lecture is available on Spike.
Viewing Comments 1 - 1 of 1
Douet patrick
posted 8/14/08 @ 12:02 PM EST
HI,
I want to contact this guy. Douglas Tompkins...
Has it an e-mail?
Greetings
Patrick
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