Is the giving away of Patagonia positive or negative for the purpose movement?
3rd October 2022
While heralded as an example of true purpose by many, I fear the giving away of Patagonia by its founder will do more harm than good for the purpose business movement, as we need more businesses to operate, and be founded with purpose at their core. The false expectation being crafted is if you are truly about purpose, you will give your organisation away (e.g. to said cause), along with the value created on the way. While this hasn’t been specifically said, expectations are created by experiences, and this will no doubt be pointed to in future when evaluating a business’ contribution to the world, and if they really are living their defined purpose.
I appreciate in this example the shares are going into a trust to fund climate action, but did it need to be as definitive as the transfer of shares from the founder to this new entity, and does this again highlight tension in a perception that purpose and profit can’t work together?
Purpose and value creation are not mutually exclusive. In fact, this is what will drive and inspire more of our greatest talents to embark on projects to make the world a better place. Lets face it, many, if not most will not have the same altruistic outlook of Yvon Chouinard, and that’s ok. Why shouldn’t someone or a team of shareholders that run or invest in a purpose-led business, generate value from this endeavor? In the system within we operate, this is self-defeating. As in fact, we need to see purpose and value creation as going hand in hand.
We are consistently reminded that governments are lacking the capability to solve the big issues of today, be that the climate crisis through to the cost of living, which is impacting many as we speak. Wrapped up in politics and self-serving agendas, government is struggling to keep up with the needs of society due to these political factors, and lacks the ability to move quickly and solve problems through policy or innovation. Business has the chance to fill this gap, and we see many examples of this, as consumers or buyers are continuing to opt for brands and products that align with their values, and move away from those that don’t.
We should reward individuals and teams that create a business that has a positive impact on the world, rather than create an expectation or narrative that if they are truly about their purpose, then they will give it away. It isn’t as binary as that, and we are missing a huge trick when convincing those established businesses in the world to change course, as the choice becomes “make money” or “do good”. These are in fact linked, not polar opposite forces.
Dan Neale is the founder and MD at Alfred