Patagonia connects heart-led leadership to the bottom line

Patagonia responds to human needAll smart leaders look for solutions that are good for their business, but not all smart business decisions have to be based on the carrot of some positive financial metric. Sometimes leaders need to make decisions based first and foremost on one criteria: It’s simply the right thing to do.

We live in a world that increasingly demands this human element of leadership. In my personal 3H-Core leadership values, I speak of the importance of leading from the “heart” (the other two are leading with “honesty” and “humility”). I’ve found that making decisions with a heart – from and for “humanness” – is not only the right thing to do, but, over time, it also typically benefits any business or organization.

Jenny Anderson, in an article for qz.com, shares the success story of Patagonia’s highly family friendly culture. It includes an on-site child care center run by teachers that provides multiple opportunities during the day for parents to interact with their kids.

I’ve found that making decisions with a heart – from and for “humanness” – is not only the right thing to do, but, over time, it also typically benefits any business or organization. tweet

“The child care program was not put in place to fight the war for talent or because its executives wanted to fix the leaky pipeline of women leaving before reaching senior management levels,” Anderson writes. “When Yvon Chouinard, Patagonia’s iconic founder, and his wife, Malinda, started the company, their employees were friends and family and they wanted to support them as they worked and started their families. The solution was not to fix a problem, but to respond to what humans need, including a place to nurse newborns, and, later, to provide safe and stimulating child care.”

Did you get that? Their programs and policies were a response “to what humans need.” That’s leading with a heart.

Patagonia, by the way, has been leading like this for 30 years, so this isn’t some trendy approach. And, yes, it’s been good for their business. According to Anderson, 100 percent of the female Patagonia employees who had children over the past five years returned to work. The national average is 79 percent.

Anderson looked more deeply into the numbers around the child care center at Patagonia’s Ventura, California offices. It costs about $1 million a year to run, but the company recoups 91 percent through tax breaks ($500,000), the value of retention, and employee engagement. She found that “as a percentage of all selling, general and administrative costs, it is .005 percent.”

My challenge (to myself and to other leaders) is to lead with a heart – to put the human needs of people first and then to look for innovative, creative ways to ensure these solutions benefit the bottom line.

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