Conquering the North Face Read online

  “We replaced that person,” I said. “Progress is now excellent.” I pointed out to the board that the company had grown dramatically in the preceding year in both sales and earnings.

  “I have a proposal,” I said. “Give the remaining management six months to prove that we can, with this one personnel change, not only continue our dramatic growth but also reach our forecasts. The same forecasts. Just give me six months. If we can’t, my entire management will resign without argument.”

  They were silent. I assumed they had already made up their minds. But I pressed on. If I was going out, I was going out honestly. The chairman finally spoke. He was complimentary. He spoke of my talent, my vision. It was too much. And then slowly, skillfully, he turned the corner. A dual head to the company, he proposed.

  Take it or leave. That was the proposal. Take the offer of someone to, in effect, watch over me, or leave the company. Not exactly those words. He veiled it in semantics, but his intent was clear. The chairman smiled at me and then went to work on the board.

  “A rejection of this proposal would be divisive to the board,” said the chairman. “It could perhaps split it irreparably and lead to the demise of The North Face. If that happened, it would all be on Hap’s shoulders.”

  It was curious to hear the chairman say my name as if he were my friend. If it hadn’t been for the pressure of the situation, I would’ve laughed. “We shouldn’t let Hap risk his wealth when the problem could easily be solved by Hap acceding to this proposal.” There was such sincerity in his voice. What a phony. He sat there wearing a red sash from his shoulder to his hip like some foreign dignitary. It was absurd.

  I felt like a street fighter who had walked into an ambush. But instead of a dark alley, I was in the midst of leather and velvet. “I won’t accept your proposal,” I said. I felt a lump in my throat. This was my life. My body filled with adrenaline. My eyeballs became huge as the whole scene clarified. “If you want to fire me, go ahead.” I remember those words. I can still taste them. They weren’t bitter; they were survivalistic. “But I know and you know,” I said, “that you are wrong!”

  I needed those in that room to understand the passion that ran through my company—the commitment I had asked of and received from my employees. I of course knew it was more complex than that. But I had to get them to understand that our company wouldn’t submit to being a faceless pawn on their game board. They needed to know this was about people.

  It worked. They backpedaled. “I don’t think we should walk headlong into these important decisions,” said the chairman, after a long pause. He suggested lunch and cocktails.

  We went to the next room. But even though the meeting later continued, the confrontation was over. I had stood up to them. I had swum through their foul embalming fluid and lived to write about it. Six months later The North Face had more than met our forecasts. Our board room solution had been to bring in a consultant to analyze the company and report back to the board. Six months later the consultant gave his report. He said the company was being run very well—as well as he could imagine it being run. And 15 years later, in 1989, I sold the company for $5.4 million. The company’s sales at the time I sold it had increased tenfold from those on the day of the meeting. It was a profound change indeed.

  To leaders, I say lead. Nurture talent; it is your best resource. To employees, I say stay strong, act out, contribute. And to all who work in America, I say don’t just let it all be. Do something. Don’t just let global competitors win. Take risks and smile. Have some fun—it’s not against the rules. At least it shouldn’t be. If you do nothing, nothing happens. If you don’t swim through the embalming fluid, you drown.

  As Richard Bangs once told me when talking about the expeditions he leads, “The longer somebody is out there and the more difficult the challenge, the greater the probability that person will profoundly change.” The same is true in business.

  If you want to know if an employer is drowning its employees in embalming fluid, just walk into the work area and see if anyone looks at you. See if they take their eyes off their work for even one moment to greet you, to smile at you, to show they are alive. If they do not, the leadership has beaten them down. If the rules are set up to suck the life from employees, it inevitably will do so from all but the most determined. And those most determined will never stick around to help the company. They will cut their own swath—determined to prove business does not have to be lifeless.

  2

  DIGGING BELOW THE BOTTOM LINE:

  The Numbers Don’t Tell the Story

  “Doing things the old way,” Steve Powell told the Wall Street Journal in 1991, “is like trying to clap with one hand.”

  Powell is senior adviser on human resources at British Petroleum Exploration—the arm of BPE that is most dependent on creativity. British Petroleum has set out to reduce the layers of management and thus clap with both hands. Sure, logic suggests you should try to reduce bureaucracy. But BPE has a deeper reason for doing this, one much closer to the core of the decision. The company is going to reward ingenuity and talent instead of ladder climbing. The Wall Street Journal said this shift in philosophy “could turn out to be a revolution in corporate culture, with far-reaching applications in other industries’ … and the changes at BP Exploration will fundamentally alter the way the company is run.”

  “Fundamentally alter.” “Revolution.” Big words. And you know what—the folks at the Journal are right. Although they hid those words in a 15-paragraph column called “International Manager,” they used all the right words. This is a tremendous idea.

  In essence it would overhaul the way employees are evaluated, promoted, and compensated. It would reward creativity without forcing people into management.

  Imagine getting rewarded for staying in your job and performing well. You don’t have to move up into a job you don’t want. There is a better way to make good money and receive recognition. You simply have to do a good job and keep getting better. You are measured on how good you are, not on how many meetings you attend. It’s staggering.

  Let’s think about bowling balls. Brunswick is the largest American company that makes bowling balls. A few years back Brunswick had a dilemma. Their product was better than their warehouse equipment.

  Bowling balls weigh between nine and 19 pounds each and so are quite heavy when sent out in bulk. Brunswick had a huge warehouse. The problem was the overhead equipment used to move inventory. The bearings in this equipment kept breaking down. It was a simple problem, but the solution was expensive.

  Brunswick replaced the bearings. The bearings broke. Again and again. They kept breaking. Brunswick put their engineers on the problem. The engineers tried and tried to design unbreakable bearings, but to no avail. Finally some warehouse workers had an idea. Brunswick, to its credit, listened.

  The workers suggested an inexpensive, ingenious, commonsense solution. Each month, they pointed out, bowling balls were returned to Brunswick because they had minor flaws—usually something to do with color.

  Why not redesign the machines a bit so that they could use the rejects as bearings? suggested the workers. Then, even if they break down, they are cheap to replace.

  My favorite part of this story comes next. A few months later representatives of the Japanese company that was Brunswick’s partner visited the United States. The Japanese saw the new bearings and were impressed by the ingenuity of the Americans.

  However, something was definitely lost in the translation. A few months later when the Americans went to Japan, they found the Japanese using the same system, with one variation. Instead of rejected balls, the Japanese were using new bowling balls. Factory made, right there. And, incredibly, they had even taken the time to drill the three finger holes into each ball. That way, explained the Japanese, they are exactly like those used in the United States.

  Apparently the Japanese never realized the holes were only in U.S. bearings because Brunswick was using recycled product. The Ja
panese didn’t take the time to measure anything but the financial success of this approach. The American company was successful because it used bowling balls as its bearings. And, thought the Japanese, it’s cheaper to make bowling balls than to buy designer bearings. They didn’t look any further than the bottom line to understand the total ingenuity of the solution.

  It is unusual for a Japanese company not to look below the bottom line. Unfortunately it is all too common for an American company. No matter what the company, though, it is essential to expand the number of measurements you use to determine its health. Too many companies are being run by professional, MBA-type managers. Many are water bugs skimming over the waters of commerce, more intent on their own career paths than on learning about the intricacies of their business or the passions of their people.

  Just as blood pressure and heart rate tell only part of the story in relation to the health of a human body, so too do profits tell only part of the story about any company. Unfortunately many executives are trained to hear “get your profits up” to mean the same as “get your blood pressure down.” The thinking is that if you do, everything else will fall into place.

  It sure is simple. One goal—short-term profits. But life is not that way. Business certainly is not that way. Although you need to simplify, not complicate, your goals, you must also realize there are a vast number of opportunities to both measure and improve your company. There are new ways to look at things, fresh perspectives. But you have to get beyond blood pressure and heart rate. You have to somehow measure the soul of your company.

  The Japanese bowling ball company, for instance, never took the time to measure employee satisfaction at Brunswick. They never noticed, as they entered the Brunswick factory, that the employees were smiling, happy to meet them, and proud of their own work. Instead they looked at the bearings with the three finger holes.

  They never even looked, really, at the bowling balls. They never stopped to think why the balls were better than the bearings. Oh, sure, they thought about the cost involved—the bottom line. If they had looked at the bowling balls on another level, they would have realized that drilling the holes was a waste of time and money. And if they had examined that aspect further, they would have understood just what the Americans were up to—recycling unwanted stock. But no; they saw only money.

  Narrowing every business analysis to profit and loss would be like a ski area narrowing its focus to just its hills. The Vail Associates, Inc., under the leadership of George Gillette, looked far beyond the hills into what was essential for a great skiing business—humanity. Vail is dedicated to quality and consumer satisfaction. All Vail employees are trained to enhance the customer’s vacation. The training includes a study of customer psychology and ways to satisfy the customer.

  Gillette had a vision to make his a new type of ski resort—not just a spectacular destination, but a family destination as well. Home in the Rockies. He and his team wanted it to be a place families would talk about 12 months a year. They wanted Vail to be not just a destination, but the destination.

  They wanted children to talk about it. It had to be extraordinary, and it was. They had more than hot chocolate, one instructor, and a day-care center. They thought it through and imagined what it would be like to be a child on vacation on a mountain.

  They put up teepees. They made a ski run go right through an Old West fort, with 20-foot-high sentry towers on either side of the run. Arrows are embedded in the fort. Vail humanized the experience and connected to the curiosity of every child. Best of all, they connected to the concept of letting children be children. No adults, except for instructors, are allowed on the run.

  Business is about so many things, it is foolish and inaccurate to narrow down success to profit and loss. It is the same with people. A sparkling resume may be a good indicator of someone’s potential, but it may not. There are always other things to consider.

  One of the most intelligent employees I ever hired at The North Face was a single mother of three living on food stamps, welfare, and her wits. Her resume was not exactly sparkling, but I took the time to look beyond her lack of employment.

  I was impressed, you see, because she had figured out how to beat the system—definitely my type of employee. She had an “old man” who was the father of one of her children. They didn’t get married because it would cut the payments in half, and he claimed to live elsewhere for the same reason.

  To get money to pay the rent, she baby-sat other children along with her own for income that she didn’t have to report. At night, when her old man was around, she worked in the garden of a local vegetable producer and was paid in vegetables and other food.

  And she sold small amounts of marijuana that she grew in her apartment. The fact that she sold marijuana didn’t thrill me, but I learned long ago that it is not what people are but rather who they are that counts. The reason I got a lot of great employees was that I took the time to look at who they were—I got to know them. I know circumstances dictate a lot of what people do in life. It is how they overcome those circumstances that identifies the difference between good employees and great employees. I look for the latter.

  The way I met her was that she and a friend, using the friend’s truck, used to pick up scraps from our factory in Berkeley. She used scrap fabrics and filling from The North Face to make stuffed toys for children, and she also picked the trash at other Berkeley factories to make other toys, like marbles from glass beads. After she made the toys, she baby-sat for her friend’s children while the friend sold the toys at flea markets.

  Finally she had enough money to buy a car and pay for a baby-sitter. I was so impressed with her background, I hired her. At The North Face she had a real job making constant money and she had health benefits. And better yet, for our company, she increased our can-do attitude. She was a seamstress who ended up working in our warranty department. She was excellent. When people came in, they liked dealing with her, and it reflected well on The North Face. I am convinced it was because her various experiences and positive attitude enabled her to identify with those who came in needing repairs.

  The truth is, in life as in business the numbers often don’t tell the story. In the earliest days of business everything was based on the agrarian calendar. Harvest-time was the ultimate measuring stick. This yearly measure made perfect sense when sustenance was the goal. But times have changed, and a yearly measuring stick of profits, though important, should not be the end-all.

  No one fact standing alone means much of anything. Just as the mere fact of a mother being on welfare does not make her ignorant, so it is with money. Profits, especially short-term profits, do not equal success. Profits are to be factored in, certainly. But the goals of a business are now more complex than a quarter-to-quarter, year-to-year measurement of an increase in profits. A truly successful company is one that inspires its employees, one with a true sense of its role in the marketplace, and one with far-reaching goals that look beyond the bottom line at the end of the next quarter toward long-term prosperity.

  Adventuring, like business, is not just about who goes the highest or the farthest. The highest mountains have already been climbed. Adventuring means doing things in different ways—measuring one’s self within the parameters of individuality. Sir Ranulf Fiennes decided his quest was walking around the globe. Steve McKinney chose to hang glide off Mt. Everest. Numerous people parapent (use highly guidable parachutes) off mountains. Jan Reynolds became the first person (and woman) to balloon over Everest. Rheinhold Messner climbs without partners or oxygen. Everyone defines adventure and success on his or her own terms. In fact, one of the happier people I’ve met is a man who became a butterfly rancher in Guatemala.

  Another satisfied adventurer is Royal Robbins, who learned through the mistakes of others how to look at the big picture. The first thing you notice about Royal is his eyes, because they are intense, intelligent, twinkling. His are active eyes, the kind that always say, “What’s that?” in s
incere curiosity.

  Royal is a gentle man, not large in stature, but strong and smart enough to get a well-earned reputation as one of the best rock climbers in the history of Yosemite National Park. And he is funny. There is something splendid about his sense of humor, his way of making you laugh at situations you could never imagine. His humor is like his eyes, very engaging. A connection comes easily with Royal.

  And so it was when he told me about Dru Mountain in Switzerland. Some had succeeded in climbing it, but many had failed. Most of the climbers had years of experience and months of training. They had the skill, equipment, and desire necessary to climb most mountains. But for the Dru, something else was needed. Most of the failures had resulted from becoming caught midclimb in the volatile weather. Driving rain or snow had pushed them back.

  Royal smiled at this next part. “The problem,” he said, “was that no one took the time to examine the weather patterns. It was really quite easy once I thought about it.”

  The weather, though volatile, went in a predictable cycle. So Royal did the opposite of everyone else—he started his climb in bad weather. He figured nature would swing back to good weather in time for the main assault. He was right.

  His is an analytical approach. If such an approach is coupled with a healthy dose of passion, it is by far the best approach. Royal Robbins has the proper passion. Though he can seem pondering, he is anything but dull. Rather he is driven—a man in search of truth. He is not bullheaded in the sense of blind ambition. He is logical. When logic leads him to a solution, he is virtually unstoppable in his quest.