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What Patagonia Learned From MBAs

Patagonia CEO and President, Rose Marcario (left) and COO, Doug Freeman (center) speak with members of the University of Michigan team during the first annual Patagonia Eco Innovation Case Competition at the UC-Berkeley Haas School of Business

Patagonia CEO and President, Rose Marcario (left) and COO, Doug Freeman (center) speak with members of the University of Michigan team during the first annual Patagonia Eco Innovation Case Competition at the UC-Berkeley Haas School of Business

It certainly doesn’t take an MBA to innovate. But when a company needs innovation, a B-school is not a bad place to look. And that’s exactly what Patagonia–one of the most trusted, innovative and environmentally aware organizations in the world–did when they knocked on the door of the University of California-Berkeley Haas School of Business. It wasn’t just a casual rap on the door–it was a full-fledged hammering with the most complex issue facing the own company and its competitors.

“We thought we’d bring our hardest problem to you,” Patagonia CEO and President, Rose Marcario said to a room full of buzzing MBAs, PhDs and other graduate students from eight universities. Marcario and five senior staffers from the outdoor gear and apparel company ditched their surfboards for a day and planted themselves front row in the Wells Fargo Room on the Northern California campus. One-by-one, interdisciplinary graduate teams marched in front of Patagonia VPs, directors and C-suite members to pitch their solutions for one of Patagonia’s toughest business and environmental queries at the first ever Patagonia Eco Innovation Case Competition.

The competition was announced last fall and teams began submitting proposals at the beginning of the year. Marcario said in her opening remarks they would have been happy with 30 proposals. And then they ended up with a whopping 111 teams from more than 30 universities. Those 111 were whittled down to the eight that presented 10 minute pitches to the panel of Patagonia execs. After a two hour closed discussion, Doug Freeman, Patagonia’s chief operating officer announced the team from the University of Michigan made up of two PhDs and four MBAs were victorious. Teams from Yale University and UC-Berkeley took second and third, respectively.

FIXING AN ENVIRONMENTAL AND BUSINESS CONUNDRUM 

Indeed, the issue at hand was complex. Last September, Greenpeace, a leading environmental justice and activist organization, released a report revealing that alpine lakes and snowpack in some of world’s most pristine wilderness areas are littered with per- and poly-fluorinated chemicals (PFCs). Greenpeace, known just as much for their shock factor as their game-changing research, pointed a finger at the outdoor apparel industry as the main culprit for the potentially carcinogenic chemical. Earlier this year, Greenpeace released an encore to their original report confirming that basically every major player in the outdoor retail space uses PFCs for their water repellent gear and clothing.

Instead of tucking tail and looking inward for solutions, Patagonia took it to academia. Having previously sat in on a panel for a case competition, Marcario decided Patagonia should host one of its own. “If business is creating this pollution, business has to be responsible in fixing it,” Marcario said. “And so we’re calling on you today to help us do that.”

So Patagonia reached out to the Berkeley Haas Center for Responsible Business with an idea: Ask student teams from top universities to figure out a more environmentally conscious way to produce clothing and gear that will withstand the harshest elements for a long time.

“This case challenge really does represent a really hard tension that we live with around making durable product,” Marcario said during her opening address. “The chemicals we use for durable water repellence make the garment last a long time. And that’s really important because that’s what has the most environmental impact. If you keep something for a long time, you don’t buy more than you need and you keep it in circulation for as long as possible.”

FROM SKI GOGGLES AND FLIP-FLOPS TO NOSEBLEED CHEMICAL EQUATIONS

The upshot: Some wildly diverse, unique and entertaining solutions. Teams from UC-Berkeley and MIT, in particular, took approaches as bipolar as the weather on the April day. UC-Berkeley’s team donned ski goggles, climbing harnesses, belay devices and board shorts and had a performance resembling something you’d binge on Netflix. MIT Sloan’s team, made up of four mechanical engineering and materials science and engineering PhDs and one MBA, had a presentation comprised of nosebleed chemical equations and periodic tables.

Nevertheless, there was a clear front runner from the beginning in the team from the University of Michigan. From the get-go, the presentation was inspiring and had Patagonia execs drooling. Michigan’s team of two PhDs and four MBAs had a ringer in Kevin Golovin. The PhD student studying materials science and engineering has already patented multiple water diversion solutions and has moved on to spray-on coatings for ice-proofing airplanes. Golovin and his team members proposed an entirely plant-based nontoxic solution composed of materials from soy beans, potatoes, rice and corn, dubbed ‘SoyShield’.

“They had all the right ingredients,” said Phil Graves, Patagonia’s director of corporate development, after the winners were announced, noting their interdisciplinary approach and alignment with Patagonia’s mission. The team members were hand picked by first year MBA Ally Stewart from Michigan’s Ross School of Business.  When Stewart heard about the competition, she went right to work reaching out to as many people as she could to find specific teammates. She gathered a team of not only technical experts, but MBAs with significant experience in lifecycle analysis, corporate finance and supply chain and human trafficking.