Should your strategy always plan for growth?

It is commonly accepted that initial failure tests one’s motivation and commitment to one’s cause.  The social entrepreneur is forced to ask, “Do I really care enough to keep going forward?”
 
But outsized success also brings a similar test. He entrepreneur has to ask, “Do I really care enough to stop and perhaps even reverse?”
 
In the 1990s, Patagonia was one of the fastest growing outdoor apparel companies in the world. It had grown from a niche brand targeting serious mountaineers and trekkers and was expanding its offerings into the broad market. It was achieving serious scale.
 
During that decade, founder/president Yvon Chouinard realized that the organizational soul of the company was getting lost in the rush to get bigger. Its traditionally flat management structure was getting more and more hierarchical. He also felt that the greater the scale of its manufacturing operations, the less it could control its environmental footprint. 
 
Chouinard decided to slow growth and revise the corporate structure to realign with its deeply held value on egalitarianism. More important, it chose to revamp its clothing line by drastically reducing the use of conventionally grown cotton, which was judged to be one of the most environmentally destructive fibers on the planet (and crucial to the growth of almost every apparel company). In the process, Patagonia dropped 30 percent of its clothing, retreating from its penetration of the mass market.
 
Yet in the process, Patagonia achieved a different kind of scale. 
 
One might call it “moral scale.” It was one of the first companies to offer employees onsite child care, maternity and paternity leaves, and other benefits. Other companies, including the Gap and Sam’s Club, look at it as a pacesetter for corporate ecological responsibility. It has pioneered ways an apparel company can recycle its products, even inviting customers to send in used items. 
 
The case of Patagonia illustrates that social impact does not equal size. Indeed, size can be a barrier to certain kinds of impact. The impact that will be most powerful and lasting will be the one flowing from the deepest well springs of an entrepreneur’s values and passions, not an ever larger organization.
 
In my experience consulting with clients, the biggest temptation to lose one’s way is in trying to win the approval of philanthropies, especially the so called “social investors.” Their demand to show “a growth strategy” or a “model to scale” can all too easily become the tail that wags the dog.
 
In the face of such pressures, here’s a set of questions that a social entrepreneur should be regularly asking herself:
 
  • Am I happy? Seems like a trite question, but it’s too often ignored as a basic barometer.
  • Are my colleagues happy?
  • Why did I get into this game in the first place? Is that happening?
  • What values might be threatened by getting bigger?
  • What can my organization accomplish by being bigger that it cannot now?
  • Can someone else accomplish that outcome? Does it have to be us?
  • What will be the costs involved – including to my personal life – to getting much bigger?
  • If I didn’t have to worry about funding, what leadership decisions would I make?

View more blog entries.