So then another value that we really valued was flex time. You know, when I had a partner in the climbing equipment, he would take off to go to do an expedition to Annapurna in the Himalayas. He'd be gone for four or five months, and I would run the business, and then he'd come back, and I would take off down, drive down to the tip of South America from California and climb for six months, and he would... watch over the business and but that's what that's what the book is the title of the book is let my people go surfing we have a company policy that says you go surfing when the surf comes up pretty simple but you know what most people go surfing next tuesday at two o'clock because that's when they have time off but you're setting yourself up to be a loser with You go powder skiing when there's powder snow.

[01:00]

You stay home to take care of your kids when they're sick. It's a different attitude. If you're a really serious surfer, you make sure that you have a job, you have a life that allows you to go surfing when the surf comes up. The other thing we wanted to do was blur the distinction between work and play and family. We wanted to continue making stuff that we used We wanted to have our family with us. We didn't want to disappear for eight hours a day. So in the beginning, you know, we had new mothers with their babies in cardboard boxes on their desk. And that worked a little bit for a while. We have open offices. We don't have any cubicles. It's all open offices, so it contributes to really good communication. But... One time, somebody had a baby that was a screamer. And that became a real problem.

[02:02]

The mother had to go out, sit in her car with this kid that was screaming like crazy. So my wife said, I've had it. We're going to start a child care center, which we did. We started one of the first on-site corporate child care centers in America. Plus, you know, I mean, it's just good business. I had 80% of my employees were women. I didn't want to lose them. You know, they say when you lose an employee or you have to replace an employee, it costs you $50,000. When you think about it, it's, you know, lost productivity, headhunter fees, blah, blah, blah. It's very expensive. It's much better not to lose a good employee. So the other thing we want to do is we wanted to continue hiring friends. No one in my company had an MBA. Everybody had a degree in anthropology, biology, sociology, or, like me, had a degree from John Burroughs High School in auto mechanics.

[03:06]

We always had an attitude that would much rather hire... The thing we looked for was a passion, a passion for anything, it didn't matter, but as long as we wanted to get really passionate people, somebody that would be interesting to go to dinner with, and preferably somebody who did the sports that we were making stuff for and then would teach them business. We would all learn business together because we didn't know what the heck we were doing. You know, it's much better than hiring a business person and trying to get them passionate about kayaking or climbing or something. So that was important to us. We wanted to go to work with friends, surrounded by friends. We wanted to go to work on the balls of our feet and have our families with us. I took those values, and we started writing them down, and they gradually turned into a philosophy of doing business. And when I got back, we had to lay off 20% of our workforce in order to save the business, and it was the hardest thing I've ever had to do because these were friends, and I swore that I would never, ever go through that situation again.

[04:17]

And so we decided to really try to be more a sustainable business. In fact, about the same time, I started getting really concerned about environmental degradation around the planet. We had a mission statement that said, make the best quality product. That was our mission statement. And so I added one more part of the mission statement, which was cause no unnecessary harm. It didn't say cause no harm, because that's stupid. There's no way you can make a product, you can manufacture anything without causing harm. There's no such thing as sustainability. There's a beginning and end to everything. There's a limit to every resource. But we wanted to minimize that. It's just a matter of degrees. The other thing I did is I started taking 15 of our employees at a time and would spend five days

[05:20]

talking about the different philosophies of business. So we'd sit down and talk about, you know, what are we trying to do in retail? What's our philosophy of retail? What's our philosophy of architecture? I mean, do we go into malls and, you know, be next to Mrs. C's chocolates? Or do we try to find old buildings somewhere and restore them and Make it a gift to the neighborhood. So I did that with every single employee in the company. And what that did is got us all aligned in one direction. I had a psychologist do a study of all our employees one time. And he came to me. He said, you know, this is really strange. I've got to tell you this. I've looked at all your employees here, and I've never seen such independent people. In fact, they are so independent, they are unemployable in other companies.

[06:23]

So that was music to my ears, but... You know, when you have all those independent people, the only way you can lead them is by consensus. They have to be convinced that it's the right thing to do. And that's what I was doing with this philosophy class. The other thing we did is I've always thought that You know, a responsible farmer leaves the land in better condition than when he received it. And a forester leaves the forest in better condition. He doesn't just clear-cut it. And a responsible government makes its decisions as if society is going to be here for, like the Iroquois say, for seven generations into the future. They don't make these little short-term decisions. But somehow business is exempt from all of that. Business can grow as fast as it possibly can. The sole mandate of a CEO of a public corporation is to maximize profits for the shareholder. So I thought that was wrong.

[07:33]

And so I decided to try to run my business as if it's going to be 100 years from now. And so we made all our decisions from then on according to that, which means You know, even if you grow 10 or 15% a year, in 20 or 30 years, you're a multi-trillion dollar company, which is impossible, of course. But that's what everybody else is trying to do. We put our business on a rate of growth that was sustainable. From that time on, we've thrived. We got out of debt, because I didn't trust the banks. We grew... what we call natural growth which is we don't encourage this artificial growth by say a company like Columbia has maybe 10 or 20,000 wholesale accounts in America we have 700 we don't advertise on inner city buses so that the gang kids buy our black down jackets instead of a north face that's not sustainable in fact

[08:43]

The reason I got into trouble in the first place is that I started selling to people who wanted those fleece jackets but didn't need them. So whenever you're making products that people want but don't really need, you're at the mercy of the economy. And I didn't like that at all. The other little Zen lesson I learned is that profits happen when you do everything right. And so even though some years we have 3% growth, we still make a profit because my company is set up to be profitable with 3% growth. Most companies, unless they're growing 10% or more, are not profitable. It's just a matter of how you set the company up. If you ask me what our profits were last year or what they're going to be this year, I have no idea. I couldn't tell you. I have no interest in it, for one thing. And I just know that the process is going well. And at the end of the year, we will be profitable.

[09:46]

The last part of our philosophy that I had to write up, and it took me years to do this. You know, I've been working on this book for 15 years because I've never studied business, and I've broken a lot of the rules of business, and I had to prove that they work because I didn't want to come out with a book and then go bankrupt. That'd be pretty embarrassing. The last part was the environmental philosophy, and it was the most difficult And it's basically a five-step philosophy. The first thing is to lead and examine life. You know, I firmly believe that most of the damage caused to the planet is caused unwittingly. It's caused by ignorance. It's caused by people who just don't ask enough questions. You know, there's a method of management at Toyota that says you ask, when you have a problem, you ask the five whys.

[10:47]

You ask the five questions. You know, unfortunately, you know, most of society and certainly the government, we don't ask enough questions. That's why we end up working on symptoms all the time. We don't really work on the causes. You know, for instance, one out of eight women in this room are going to get breast cancer. Before World War II, it was about one in 30 or 40, and now it's one in eight. So it can't all be genetics. Yet, all the organizations working on cancer are working on cures. Only 3% of the monies that go to breast cancer research go to finding causes of breast cancer. Because the causes may be one of the 300,000 chemicals that are in use today. Or it could be a cocktail of one of those chemicals. which adds even more complexity. I think society has just committed that we're not going to get rid of those chemicals. So let's find a cure.

[11:48]

Plus, there's no money to be made in finding causes. There's money to be made in cures. To lead an exam in life, let's say you want to feed your family healthy food. You have to know where it comes from. You can't just go to Safeway and buy some tomatoes because they may come from Mexico that still uses DDT. You have to know the farmer. You have to... You have to ask a lot of questions. We didn't know what we were doing in making clothing. We had no idea. We'd just, you know, call up a fabric supplier and say, hey, give us 10,000 yards of shirting, you know, in this color or this pattern. And that was it. So we started asking a question. Okay, of all the fibers used in making clothing, which ones are the most toxic and which ones are the most benign? It's not easy to find the answers to that, but After digging around a lot, we finally found out that the most damaging fiber to be making clothing out of, by far, was 100% pure cotton.

[12:49]

And that's because the way it's grown. Cotton uses 25% of the world's pesticides and insecticides, only occupies 3% of the world's farmland. To pick the cotton with mechanical pickers, you have to defoliate the plant. And you use Paraquat for that. The same stuff we sprayed on Vietnam. All of those chemicals go into the aquifer. They go into the workers' lungs. The cancer rate in cotton growing areas is ten times above the normal. I went to the Central Valley and I started looking at some cotton fields and I was aghast. It was a killing zone out there. There's nothing alive. There's a No weeds, no birds, no insects. There's just nothing. It's just dead. And there's big sumps out there, big lakes where the water comes up from all that irrigation and all those chemicals.

[13:51]

And they have to hire these guys to sit on lawn chairs with cannons and shotguns. And when the waterfowl come to land on the water, they scare them away because, you know, if they get some of that water in them, they'll have Chicks with two beaks and three legs. I came back and I said, okay, we're getting out of the cotton business. I will not be part of that. And it's like, you know, you're a little company making landmines. And you're one of the best companies to work for in America. And you're hiring people, giving them a job, blah, blah, blah. But you're making landmines. And you go to Cambodia and all of a sudden you see the results of your work. Now you have a choice. You can either continue making landmines with guilt or you get out of the business. So I gave the company 18 months to completely stop using any industrially grown cotton. Well, thankfully, there's an alternative.

[14:53]

I didn't have to get out of the cotton business because there was organic, organically grown cotton. But I don't just call a fabric supplier and say, hey, you know that shirting I ordered switched to organically grown. It wasn't that easy. We had to work with the gins and the mills and the spinners and it was really hard, but it mobilized the whole company and we learned finally how to make clothing. The other thing is, you know, when you buy cotton clothing, only 73% of that shirt or that pair of pants is actually cotton. even though it says 100% cotton. The other is all chemicals put on the fabric. And formaldehyde is one of the most common. And it's to make that cotton stay pressed and not shrink.

[15:54]

So it makes it actually a more practical product, putting all those chemicals on. Well, we weren't about to use organically grown cotton and then put all the chemicals on it, and toxic chemicals as well. So we had to learn how to do it by construction. You know, maybe use a longer staple cotton and spin it a little tighter, pre-shrink it, you know. So we had to learn how to make clothes. So that was the result of asking one question. So you ask another question. Okay, well, are the dyes toxic? We didn't know. You know, you just never think about those things.

[16:37]

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