Patagonia CEO: Insist on Growing at Own Pace

Also had a chance to catch up with Patagonia CEO Ryan Gellert out at the Economic Club of Chicago, and we talked about his firm's approach to environmental activism, his views on growth and profitability, and where he thinks leaders across the industry stand today. Take a listen. I think there's some phenomenal human beings running businesses across the landscape. I could name many people who I consider great friends and really respect their values and what they stand for. There are some companies out there and some at scale that I think are doing really important work. I think about Costco. I believe the CEO of Costco might have spoken here recently and I I look at what they have centered as they have navigated these shifting cultural wins and just said this is who we are, this is what's important to our employees, this is what's important to our community, we're tuning out the noise, this is what we're gonna do, and I have a lot of respect for them. There there's an issue though with regards to a lot of CEOs as to how they're judged in terms, obviously, judged primarily on financial metrics, whether it's the the success of their company or the success of the share price Yeah. And the shareholders. What is the metric that you use to actually determine success if it's not, obviously, not a share price, but even I've heard you talk about revenue growth being a reductive metric Mhmm. Profitability basically being a sort of a resource to invest back in. So how do you measure your success? I mean, it's pretty simple ideas, but it can sound a little nuance and complicated when you wrap it all up. I mean, I I don't think growth is good or bad. I think growth is just progress at a certain pace from a place to a place, and so I do prefer to grow than the opposite, but I absolutely insist that we grow on terms that we're comfortable with. Profitability, I look at similarly and different. I think the thing about profitability that's incredibly important to our businesses, first of all, this is an inflationary environment and we have got to be able to take care of our people. We've got to be able to reinvest in the business, and I think one of the responsibilities I hold right up there at the top with anything is to, as long as I'm in this role, when I hand this off to somebody else, I want the business to be in at least as good a shape as when I found it relative to its ability to continue to run independently. I think that's incredibly important. Do you want it to be a bigger business? I think it will be a bigger business. I think it can and should be a bigger business. I have never thought about doubling the size of the business in the time that I'm in it, and I, you know, again, I'm super competitive. If I believe we're making the best product in a category, I wanna see that product all over the world and I don't wanna see anything else. But we will make the product the way that we feel it needs to be made, communicate to people what it is, and provide great service to back it up. I think, you know, to the tension that other businesses may feel, I think the system is broken. I think the quarterly... I think the focus on share price, the focus on quarterly earnings and performance, I think is way too short short term, and I think it creates perverse incentive structures. I will also take the opportunity to say in these last roughly twenty four months in this cultural moment, and yeah, definitely influenced by this administration, there is kind of this sense of let's celebrate how much can I get, how strong am I, how much am at the? Everything I get, I take at the expense of you and that's what winning looks like, which I don't find interesting on any level, not as a business, not as a leader, not as a human.