Why the Patagonia and Costco CEOs Are Not Worried
The "Epiphany" and the "2x4 CEO" in a post-UnitedHealth Group-event world.
Imagine a CEO sleeping soundly at night, not because they're oblivious to the world's problems, but because they've already built a business that's part of the solution. That's the peace of mind that comes with leadership that truly values sustainability.
What is an epiphany or 2x4 CEO?
In Tim Mohin’s Changing Business From the Inside Out: A Treehuggers Guide to Working in Corporations he shares two terms:
2x4 and Epiphany
Mohin explains that corporate responsibility often emerges when a company and CEO is faced with a metaphorical 2x4 whack. This “whack” is a business threat that can only be addressed through corporate responsibility whether it’s upcoming regulation, allegations or facts coming to light. These "wake-up calls" are a reactive measure, spurred by significant business risks that demand immediate attention and can serve as a catalyst for industry-wide change.
On the other hand there’s epiphany companies with founders and CEOs that proclaim their organization will “be a leader in responsibility” and embed social responsibility into the company’s DNA. Most importantly these companies and CEOs are not born out of crisis management or problem-solving mode; they instead are making profits while prioritizing the planet, their employees, and communities.
The current metaphorical 2x4 whack
After the shooting and murder of Brian Thompson, CEO of United Healthcare, the insurance arm of UnitedHealth Group, we are living through a metaphorical 2x4 whack that’s already affecting multiple industries and sectors. Companies are currently in crisis-mode and have issued public statements and offered condolences, updated their security measures and have even removed executive leadership bios from websites.
Healthcare stakeholders have come together on social media and shared stories, feelings about the company, its leaders and corporate greed, and are ultimately demanding more from organizations.
Source: CNN
All of this led me to wonder, if the fate of Brian Thompson had occurred to Yvon Chouinard, Patagonia’s Founder, would the public sentiment be the same? I believe the answer would be a resounding ‘no.’
Source: Threads
Patagonia and Costco CEOs are going to be just fine
When I shared my 60-second video explanation of Epiphany and 2x4 CEOs relating it to the United Healthcare CEO event, TikTok user @cassandradistin6 replied with “I really doubt CEOs like those of Patagonia and Costco are worried about a thing.”
So what makes these CEOs “safe” and labeled as epiphany CEOs?
Source: Patagonia
Yvon Chouinard (yuh·vaan shwee·naard) isn't just "safe," he's practically a legend in the world of sustainable business. This isn't some recent PR stunt; Patagonia's been walking the walk for decades. Chouinard had his "epiphany" moment long ago, realizing that the pursuit of climbing and his love for nature were at odds with the environmental impact of his business. This led to a complete overhaul of Patagonia's practices, from sourcing sustainable materials to becoming a vocal advocate for environmental protection. In 2018 Chouinard even changed the company's purpose to "we're in business to save our home planet," and in 2022 he lost his Billionaire status when he donated the entire company to a trust dedicated to fighting the climate crisis and stated that “Earth is now our only shareholder.” This proactive, deeply ingrained commitment to sustainability is what sets him apart. He's not reacting to pressure; he's setting the standard.
Source: Unilad
Jim Sinegal might not be the first name that comes to mind when you think of “sustainability” founder in part due to sustainability being primarily and overly associated with the environment. However, Sinegal’s approach to business is a textbook example of "epiphany" leadership. Sinegal built Costco on the idea that treating employees well is good business. This translates to fair wages, generous benefits, and a long-term perspective that prioritizes employee and customer loyalty over short-term profits. This demonstrates a core understanding of stakeholder value that's essential for true "epiphany" CEOs. Sinegal recognized that a sustainable business model requires taking care of your people and fostering a culture of shared success. This holistic approach, focused on long-term value creation for all stakeholders, is what makes him an "epiphany" leader.
While not every CEO or company can be categorized as “epiphany” when it comes to corporate responsibility and corporate sustainability, many have the opportunity to step up when that metaphorical 2x4 has hit the industry and sector. As of this moment, any company in the Health Insurance Industry that begins or decides to step up their social responsibility or sustainability efforts is officially a 2x4 company.
And to that I say, Welcome.
It is unfortunate that it took an event like the murder of a CEO for many business leaders to understand that social responsibility and corporate sustainability need to be embedded into their company’s DNA, but we are a “lessons learned” society. What matters is what happens next.
A path forward for:
Content Creators
If you are a content creator you have the easiest journey of embedding social responsibility and sustainability into your business and business model. As a content creator you are constantly speaking with your audience and should have a great pulse on them and their value - it’s ok to share your thoughts and feelings regarding the United Healthcare incident if you haven’t done so already. You can share that you understand this is a crucial time in regards to how business is done, not just for insurers or healthcare providers and you’re looking at your own brand and business.
Share that you’re not just “listening and learning.” - and actually take the time to listen and learn.
Published in a 2022 study, Dr. Mariah L. Wellman, assistant professor in the Department of Advertising and Public Relations and expert on social media influencers argues that in the summer of 2020 when many influencers shared Black Squares on social media it was performative allyship “utilized strategically to build and maintain credibility with followers.”
Just like brands and companies are expected to make statements and take a stance, so are influencers and content creators.
My boardroom activist and sustainability strategist advice for moving forward is to:
Identify what your own values are, what is your stance when it comes to social responsibility
Identify how those values line up with your content creator mission statement and vision for your brand
Conduct a self-assessment sustainability audit to identify where you stand. As simple as generating one yourself, asking ChatGPT or Gemini to create one for you or complete ours
Evaluate your existing work, do those values come through in current and former partnerships?
Identify the ESG issues that are critical to your stakeholders
Understand your industry and sector threats and opportunities to stay ahead of competitors
Share with your audience why this matters to you and take them on the journey
Educate them on social responsibility items that matter in your industry and sector
Startups
If you are a startup with fewer than 5 employees you have the second easiest journey of embedding social responsibility into your business and company’s DNA. This is due to having a great pulse check with your employees, customers and MVP, and MVP users.
Just like brands and companies are expected to make statements and take a stance, so are startup companies, however you have the easiest way of communicating it with your stakeholders.
My boardroom activist and sustainability strategist advice for moving forward is to:
Be transparent with your team and explain that the UHG news has caused you to want to integrate a social responsibility lens into your work and the company
Audit your established company mission statement and vision (subscribe to see upcoming blog on four sets of questions to address when reviewing or drafting a mission statement)
Conduct a high-level ESG and materiality assessment to identify what’s critical to your stakeholders
Identify your:
Strategic Objectives - focus on a timeline of 5-10 years and ensure they are concise, specific, and able to be understood by the stakeholders
Operational Objectives - focus on a timeline of 2-4 years and ensure they are applicable to the operation’s day-to-day activities
Yearly Functional Objectives which should support your Operational Objectives
Set up calls with your existing customers, employees and investors to see if they see your product, service, offering and pitch lining up with established objectives
Audit existing products, services or offerings for agreement with identified objectives and the mission statement
Create a quarterly memo, newsletter or blog where you’ll update your stakeholders on your commitments and progress
Startup Investors
If you’re an investor and want to help your portfolio companies add a social responsibility lens or fully embed sustainability into their company’s DNA you have the third easiest journey due to the size of companies you work with. The activities your portfolio companies will complete will be the same as the ones listed under startup. The great news is that they’ll be empowered by your support, and have a clear understanding of you and your firm's social responsibility and sustainability stance .
My boardroom activist and sustainability strategist advice for moving forward is to:
Meet with leadership at your own firm to identify what your company stance is and identify the ways you’re currently supporting portfolio companies when it comes to building companies that factor and prioritize sustainability and social responsibility
Schedule a call with your portfolio companies to see how they feel about the news, what concerns they have
Set up a call with your own investors to further clarify their stance and support on social responsibility and corporate sustainability
Conduct a sustainability audit - develop it first, if this wasn’t part of your vetting process - to identify the companies stance and the potential risk associated with their offering, operations and product
Decide what social responsibility and sustainability support you want to provide to your portfolio companies
Create monthly sessions to share resources and ways to execute on selected social responsibility and sustainability efforts
Mid-Market and Enterprise (employees)
If you’re a mid-market or enterprise size company… I’m sorry to be the one to tell you but you have the hardest job. However, it’s probably not the company leadership reading this. It’s most likely an employee at said company, so first things first: it starts with you. Whether you’re an employee that wants to see change from the bottom-up, a manager who wants to support their team while adding social responsibility and sustainability tools for continued use while moving up in the company, or if you happen to be an executive or board member responsible for the strategy of the company I hope you see a common trend in shared tips and advice.
Talk to your team and related stakeholders depending on your position and title. What are their thoughts, find out how your team, product or company can be doing better. If you don’t have a direct impact on the mission statement or objectives you do have a say in how you and your team can execute on those objectives and the company mission.
My boardroom activist and sustainability strategist advice for moving forward is to:
Identify what values you want your leadership team to have
Identify what your company’s stance is when it comes to social responsibility and sustainability. Please note that sustainability should be so much more than just environmental work and philanthropy
Read your company’s sustainability report, if created and published
Reach out to your company’s Chief-Sustainability-Officer or sustainability manager to get a better understanding and to learn more about company goals and initiatives. If there’s no CSO or sustainability manager
Lookup to see if there are any Employee Resource Groups or reach out to the highest operations or finance individual to share your thoughts and concerns and explain that you genuinely want to be involved in helping bring a social responsibility or sustainability lens
Future Epiphany CEOs
It’s so nice to meet you - you give me hope for a better future. You probably have the hardest journey but I can guarantee you that it’ll be the most fun and may not even feel like work.
The work truly starts with you. If you’ve read the advice thus far you’ve seen that it’s all about understanding where the company’s mission, vision, values and objectives are as well as the stakeholder stance.
If you’re someone who aspires to be a founder or CEO in the future, the time to start acting like an epiphany CEO is now.
Whether you’re an employee, college or grad student, start by identifying what values are most important to you. Similar to how a founder starts a company because a problem is so big that it needs to be addressed and solved. What are some of the world’s most pressing matters you think companies should be addressing?
Ready to add a sustainability lens to your work?
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