We opened the chapter with the story about an outdoor company, and we end it with a story about another outdoor company. The company we’re discussing this time, based in Portland, Oregon, was the brainchild of a small group of executives who left big times jpbs at Patagonia, Nike, and Adidas. These individuals shared a belief that ‘ in addition to generating a profit, companies have an equal responsibilities to create positive social and environmental change.’ Putting their beliefs into action, the group formed Nau (which is Maori for ‘Welcome! Come in”). and Nau id not just another outdoor company! When deciding what Nau was going to be like and how it was going to do business, the founders knew they didn’t want to do things the way they’d always been done by traditional businesses. CEO Chris Van Dyke said, “We started with a clean whiteboard. We belived every single operational element in our business was an opportunity to turn traditional business notions inside out, integrating environmental, social, and economic factors.” From design to sales to finances, Nau is driven by these factors.
Everything in Nau’s operation had been approached with sustainability and social justice “filter.” In the design area, the company, in partnership with its suppliers, developed 24 of its 32 fabrics to be more sustainable and to combine performance and visual appeal. Each supplier, manufacturer, and even Nau itself is bound by a code of conduct. To ensure that all parties are living up to the standards, their actions are overseen by an independent, nonprofit auditing and research firm. In the sales area, the way the company retails its products is also unique. Using a concept it calls a “Web-front,” Nau has combined the efficiency of the Web with the intimacy of a gallery like boutique. In the “store”, customers can try on clothes, but they use self-serve kiosks to purchase from the Web. Because in-store inventory is greatly reduced, the stores are small 92,400 squares feet compared to the standard 4,000 plus square foot outdoor retail store). This approach saves operating expenses because less energy and fewer materials are used. Good for the planet…..good for the business.
Finally, Nau has a unique financial approach it calls “aggressive altruism”. The company has pledged 5 percent sales to charitable organizations dedicated to solving crucial environmental and humanitarian problems. The “philanthropic gold standard” is 1 percent of sales, and the average among all corporations is 0.047 percent. But although the amount it gives is unusual, what happens with Nau’s dollars is really exceptional: Nau puts the giving decision in the hands of its customers. They’re asked to indicate which “Partners for Change” they’d like their 5 percent to go to. Using this “conscious choice” process, Nau is “calling its customers out, daring them to connect the dots.”
1. What do you think of Nau’s approach to doing business? Is it being ethical and responsible? Discuss. 2. Will Nau’s approach have a limited appeal, or do you think it had staying power? What drawbacks might there be to what Nau is doing? 3. Is it a business’s responsibility to get customers to “ connect the dots’ and make choices about social issues? 4. Are there lessons here for other businesses? Discuss.
1. Students are required to form a group of 4 (FOUR) to 5 (FIVE) persons. One of the group members should be assigned as the group leader.
Deadline: Submit your report in Week 5, which is 18.04.2014 (FRIDAY) before 12pm. * Late submission will not be entertained and you should bear the consequences.