Analysis of Patagonia Employee's Engagement Strategies using Mckinsey's 7S Framework

A Case Study of Employee Engagement: Patagonia
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A Case Study of Employee Engagement: Patagonia An effective human resource management approach synchronizes key functions, such as the stewardship of the organization's culture, processes, and change management practices towards the sustainable growth and development of the organization. Such an approach should focus on enhancing the employees' competencies for improved performances as the stewards of the organization's competitiveness across its diverse operational activities (Cohen, 2012). On the other hand, improved employee performance is a function of high rates of employee job satisfaction characterized by low turnover rates due to effective mitigation of human resource management challenges, including 'moonlighting,' 'quiet quitting,' and 'great resignation.' Effective employee engagement strategies are integral to achieving the outlined positive results for the people or employees within an organization. The Patagonia case study highlights some strategic employee engagement interventions accounting for the organization's rapid rise to becoming one of the leading brands in outdoor clothing apparel. The organization's rise to becoming a globally competitive entity in the outdoor clothing industry features improved company reputation, talent acquisition, and high employee retention rates. These features define the effective employee engagement strategies enshrined in Patagonia's business development strategy featuring strategic human resource development practices at the organizational and individual levels. Provided herein is a detailed analysis and evaluation of Patagonia's employee engagement strategies using Mckinsey's 7S framework, highlighting some of the human resource management (HRM) elements to consider for achieving the desired outcomes for the people or employees in an organization. Case Study: Patagonia Founded in 1973 by Yvon Chouinard, Patagonia is an outdoor apparel retailing organization operating across five continents and headquartered in Ventura, California. The organization features a unique organizational culture stemming from the company's mission to build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis. The company's unique culture thrives on the organization's core values lasting for over 45 years, including quality, integrity, environmentalism, and not being bound by convention (O'Rourke, 2017). Under the core value of quality, the company emphasizes the pursuit of ever-greater quality in all its operations while embracing relationships built on integrity and respect in fulfilling its core value of integrity (O'Rourke, 2017). Patagonia also advocates for personal and corporate action regarding environmental conservation in line with the core value of environmentalism. The organization further embraces flexibility in developing innovative ways of designing a wide range of outdoor and other clothing apparel as the force behind its success in exploring beyond the conventional or traditional methods embraced by other organizations in the industry (Casadesus-Masanell, 2010). Integration of the company's mission objectives and core values makes up the organization's unique culture of allowing employees to treat work as play and regard themselves as the ultimate customer for the apparel they produce. The integration of the company's unique culture with its strategic human resource management outlined in its values and mission objectives account for the organization's remarkable achievement in growth and profitability. For instance, Patagonia recorded almost 100% of sales for its product line in the wholesale and direct channels and 80% through retail in the 2010 financial year (Casadesus-Masanell, 2010). In his book, Let My People Go Surfing: The Education of a Reluctant Businessman, Yvon Chouinard summarizes and reiterates the company's unique culture as the basis for its success over the approximately 49 years of operation (Mason, 2017). The founder wrote, "if you care about having a company where employees treat work as play and regard themselves as ultimate customers for the products they produce, then you have to be careful whom you hire, treat them right, and train them to treat other people right (Mason, 2017)." The company's organizational culture advocates for adopting effective employee engagement practices from entry-level recruitment to workplace development in training. The company has over 2,000 employees working across five different continents, with low employee turnover, high morale among employees, and an increasing number of applications for open positions or vacancies in the organization (Casadesus-Masanell, 2010). According to a 2016 survey, approximately 9 out of 10 employees agreed that Patagonia is a great place to work and that they are proud of working at the organization (Mason, 2017). 9 out of 10 employees also revealed that they rarely seek a job at other companies (Mason, 2017). Despite the remarkable achievements, Patagonia continues to invest in enhancing the employees' performance management strategies to maintain its competitiveness in the market while upholding its sustainability approach to business. Such strategic interventions include developing and adopting the New Regenerative Performance Approach in 2015 (Mason, 2017). Below is a critical description and detailed breakdown of Patagonia's employee engagement strategy using McKinsey's 7s model. Analysis and Evaluation of Patagonia's Employee Engagement Strategy Human resource managers or professionals use different strategic tools and frameworks to assess employees' and overall business organizations' performances. McKinsey's 7s model is one of the strategic tools and frameworks used by HRM professionals and managers to evaluate the performance of their organizations. It creates an effective platform for identifying areas that need more attention, applying effective change management processes for enhanced employee performance, and achieving the organization's sustainable growth and development objective. The framework identifies seven critical areas of focus: strategy, structure, systems, shared values, skills, style, and staff. The outlined areas of focus are further categorized into hard and soft elements. Strategy, structure, and systems constitute the hard elements, while shared values, skills, style, and staff make up the soft elements. The alignment of the hard and soft elements is necessary for achieving the organization's desired result of higher organizational performance. A critical analysis of Patagonia's organizational behavior and HRM elements using McKinsey's 7s model allows for evaluation of the alignment of its hard and soft elements towards determining the efficacy of employee engagement practices. HRM Strategy Patagonia's human resource management (HRM) strategy stems from its founder's perception of business being accountable for many of the world's economic, social, and environmental problems but with the potential to mitigate the challenges and inspire positive change (Casadesus-Masanell, 2010). Chouinard believed in challenging the routine or conventional rules of business for a new responsible approach to business that would partly define Patagonia's HRM strategy. The founder's environmental commitment would also find its way into the organization's HRM strategy based on his experiential lesson on making business decisions "as risk-free as possible" (Casadesus-Masanell, 2010). In the essence of challenging the conventional rules of business and embracing the "risk-free" business approach, Patagonia adopted an employee-centered HRM strategy upon which it depends for achieving the organization's mission objectives. The HRM strategy thrives on the company's mission of building the best product, causing no unnecessary harm, and using business to inspire and implement solutions to the environmental crisis. Patagonia ensures the achievement of the mission objectives by entrenching and entrusting the company's four core values to all employees upon recruitment and subsequent placement across the company's different departments. The HRM strategy allows for the autonomous pursuit of the company's mission objectives at the individual and organizational levels by entrusting employees with upholding the company's four core values. Employees are responsible for pursuing ever-greater quality in everything they do, establishing relationships based on integrity and respect, serving as a catalyst for personal and corporate environmental action, and developing innovative ways of doing things for sustainable growth and development of the organization. The organization's mission objectives are clearly communicated to the employees, with the recruitment guided by the outlined company values. Hence, the company's HRM strategy clearly communicates the organization's goals and objectives while firmly aligning with the other McKinsey's 7S elements. Organizational Structure             Patagonia has a horizontal organizational hierarchy with a chief executive officer responsible for the daily operational activities of the company. In 2010 Yvon and Malinda Chouinard were the only shareholders of Lost Arrow Corporation, under which Patagonia was the main subsidiary entity (Casadesus-Masanell, 2010). The board is responsible for implementing the identified change management initiatives at the organization, with the CEO tasked with the company's growth, profitability, and globalization. In essence, the C...