Goals, Culture, and People Development

Goal Setting

Many people might now have grown tired of the concept of goal-setting, but in 1998, it was almost non-existent. There are always those who won’t try goal-setting because they fear failure if a goal is not attained. In my view, learning to fail might be the most crucial learning of all. Most people don’t like goal-setting because it makes them responsible for their lives. Often, people want to dream about their ideal life, and then vote for a government whom they think will give them their ideal life without actually having to work for it.

SMART

As lululemon’s early culture developed, we used the SMART template set out by Brian Tracy in his monumentally great work The Psychology of Achievement1. SMART stands for Specific, Measurable, Attainable, Relevant, and Timely goal-setting.

Our brains are like computers. Garbage in, garbage out. A goal that is measurable, with a by-when date, is something with which our brains can work. A perfectly worded goal contains the right information for our subconscious computer to work on the goal 24/7, even when we’re asleep or doing something else.

One fundamental idea is that a goal must be so specific that there can be no grey area as to whether the goal was achieved.

Unfortunately, most goals I see look something like this: I will spend more time with my family in the next 6 months or I will eat healthier next year. While a noble idea, as a goal, this cannot be measured and has no date for completion, therefore, it does not adhere to the SMART template.

Conversely, a workable, SMART-oriented goal looks like this: I will take my family to Europe for 10 days by December 31, 2025 or I will cook 5 gluten free meals a week by April 30, 2023.

At lululemon, we developed a template for staff to set out a 10-year vision for their lives, their three top personal values, and 18 goals. The goal template was split between family, career, and health goals. The goal-setter set two goals each for family, career and health to be attained within three different periods of time: ten years, five years, and one year.

The goals fed into and were aligned with their vision. In this way, lululemon became a leadership development company disguised as an apparel brand.

Where I differed from Brian Tracy was in my belief that a person should fail at achieving stretch goals 50 percent of the time. Failing is a part of life. It is merely a setback and an opportunity to reset the goal with new conditions of satisfaction and new by-when dates.

I also believed that the teachings of Landmark combined with vision and goal setting produced an even more powerful synergy.

I wanted a way to keep the transformational concepts of Landmark alive well after people had taken the course. By combining vision and goal-setting with insights around integrity, choice, and possibility, it created something very tangible and real that people could action in their own lives.

As I said in my purple shirt story, my past constrained my future. Prior to investing in transformation- al development, I would set a goal like this: I will weigh 220 pounds by December 31, 2013. The problem is that the goal to weigh 220 pounds goal was based on my previous weight of 240 pounds which I had fluctuated around for at least five years. If I didn’t know my past weight and I researched the optimum weight for my age and height, I would find my goal would be 208 pounds. Setting goals from a vision-based future, unconstrained by my past made my goals audacious.

Setting goals from my vision-based future also enabled me to create a plan. I set my 10-year goals based on the vision for my future. Then I asked myself, to be there in 10 years, where do I need to be in five years? And if I am there in five years, where would I need to be in one year? This way of goal setting freed me up from the pitfalls of mediocrity; it had me create goals from a future of free choice as opposed to a future that was going to happen anyway.

lululemon’s Culture and Training

In early 2001, I decided we would take advantage of a relative lull in the higher pace of business to codify lululemon’s core culture and training, which took its inspiration from The Psychology of Achievement2. I only wanted to go to work with people I loved to work with. That was the basis for lululemon’s culture.

I had listened to The Psychology of Achievement, and then as I finished each cassette, I passed them along to Shannon and Jackie. They responded positively and immediately gave us a common understanding. I told them I wanted anyone they hired to hear the same lessons, so Shannon and Jackie provided the audio to all new hires, and this was the very beginning of the lululemon training program.

I assumed each new lululemon person was already great and all we had to do was help catalyze their lives. I believed it was important to train people for their own benefit, not because I was expecting some sort of return. I wanted to develop employees to their full potential and then set them free. They could then choose to work at lululemon or to fulfill other goals. With choice, the ones who stayed were outstanding employees and the ones who left, left happy and always talked well of their time at lululemon.

It was critical for everyone to attend the Landmark Forum. I had experienced such a positive, transformative impact on my own life that I wanted anyone working with me to have the same access to understanding what a great life could look like. I wanted to surround myself with people who were excited to live a long, fun, and fulfilled life.

Dave Halliwell had been involved with Landmark for a long time. “I was an introduction leader for the Forum,” he says. “Landmark is an intense transformational experience that allows people to embrace breakthroughs in their lives. It’s clear that the relationship between lululemon and Landmark is fundamental to the company’s success. Like anything so dramatically effective, there are people who love it and people who fear it, but to my mind, there’s no question about its power.”

I knew if the people who worked at lululemon could communicate using a common language, and if they had the same context for what greatness was, we would build an amazing launchpad for success. I knew if we could build a solid educational platform that could be absorbed in two weeks, our people could grow faster than the company.

Even with a handful of people, a unique culture was already taking shape. Part of it was the series of audiobooks we shared. These books set the foundation and the context of who we could be. As I look back on everything now, I want to thank the authors of Why We Buy3, Tipping Point4, Pour Your Heart Into It5, Straight from The Gut6, and Built to Last7, among others, for offering the wisdom and insights that helped make lululemon what it was.

More than that, our development training showed Jackie, Shannon, and the women they’d hired that we were investing in them.

In a sense, I was exceedingly selfish about people development at lululemon. I wanted to go to work with people I loved, so I was willing to invest in their greatness. I believe when a person is transformed, they become leaders to themselves, then to their family, and then to their community.

A transformed person loves themselves and has the mental focus to generate a wonderful life. A fulfilled person has so much evidence of success, they automatically want the people around them to be trained in the same way. The leadership of one person automatically begets the leadership of those around them.

With the development culture, I wanted to be able to send a 23-year-old to another city to run a $10 million store with 20 employees, knowing that 23-year-old would act with integrity, be responsible, creative, and because of this, well-paid. They would reach their goals, then the company’s goals, and be rewarded for being a leader first to themselves and then to others.

As foundational lululemon Trainer Jenna Hills puts it, “Something that gets hidden about lululemon is that the company wants its people to have goals way outside of it – goals that may take them some- where other than working at lululemon. The way it succeeded was by having people understand they could develop the skills and leadership at lululemon to attain their personal goals outside of the company. Conversely, if this was forgotten, people were consumed by the company and no longer did their best work. Leading by this principle requires strong leadership that is ‘all about people’ – leaders who love to get out of bed to watch their teams grow and flourish in their work and are not focused on company profit.”

We viewed failure as a positive. When someone failed and it cost the company $100,000, I asked them if they had learned anything. If they did, I assumed that person was now $100,000 more valuable to the company. We knew we were making mistakes, but we were in daily reinvention mode, and we knew mistakes made us stronger.

Educators and Super Girls

Lululemon had become something truly unique. This started with the Educators working the floor of the store. They were excited because they were part of the future of how businesses could run. The Educators we hired were living, breathing models of the Kitsilano life. Each morning, our Educators chose to bring happiness into their lives, which, in turn, brought happiness to the lives of those around them.

I was fascinated by the convergence of the employees’ self-interest and our company vision. As much as I believed our employees were interested in the betterment of the world, I knew that they each had their own personal motivators as well. I wanted to create an incentive-based model that prioritized the employee’s personal life over the company as a new way of driving a profitable business.

I had engaged a group of dynamic and enthusiastic university-educated women who were con- temporaries of the highly educated customers I knew would pay for technology.

I wanted Super Girl employees to interact with Super Girl customers. No company had ever put this puzzle together because wholesale apparel was focused on the lowest common denominator. The lowest common denominator was cheap labour with high turnover.

Everyone in the company created their own vision and goals. Our Educators were so excited about their own lives that they wanted to discuss what it was to live a full life with everyone that entered the store. This Super Girl Educator created a sense of belonging; she listened to the commitments of our Guests and partnered with them on the big things they were up to. The relationship between the Educator and the Guests was based on finding the perfect item for the Guests’ specific goal or need.

I also trained our Educators to point the customer to Nike or Adidas if their product provided a better solution for the Guests. I felt that everyone should win; even the competition. Lululemon was to be agnostic and egoless.

Our training worked. I overheard real conversations shared between friends over coffee about the authenticity of our brand. It was exactly the experience we wanted for our customers.

Super Girls were defining lululemon, and I was learning from them.

The 6/13 Rule

Part of our formula also depended on our customer experience – how we educated our Guests once they were in the store. Using our Kitsilano store as a sort of laboratory, I studied how people interacted with our products and thought about the optimum way for us to engage them. We assumed the number one thing the Super Girl wanted us to solve was her compressed time. She was busy and needed a new way to shop.

We had the best quality, so she would rarely have to return a garment. We supplied free hemming, so she didn’t have to go to another location to get the right length of pant. Our store was set up according to function, not colours or outfits, so she could quickly find what she needed. We were fanatical about having the perfect combination of Educators, change rooms and cash desks to make the shopping experience friction-free.

I came up with several new procedures. One was something I called the “6/13 rule” – if a Guest was looking at a product for six seconds, an Educator had a 13-second window to educate them about the item. Barring any follow-up questions, the Educator would then leave them alone until they looked at another item for around six seconds. There wasn’t anything scientific about it. I’d come up with those numbers by looking at people and observing their body language to see what they were comfortable with. I wanted our Educators to impress customers with their sheer knowledge of and enthusiasm for the item.

Our Educators were on the front lines and knew more about the customer and the product than most people at the Store Support Centre (the SSC was lululemon’s answer to the “HQ” of other companies). When we made big decisions, we made sure the decision was heavily weighted toward the person who works in the store.

Nothing on Hold

Our success also came from breaking retail rules at the store level. For starters, we put nothing on hold. Some people couldn’t believe we wouldn’t put products on hold, but we were selling our clothing quickly, and I always felt it was our responsibility to prioritize the Guest who was actually in the store.

If something was on hold behind the shelf and someone who wanted to buy that same garment was out on the floor, it didn’t make sense to hold it for the person who wasn’t physically present.

This rule wasn’t accidental – I’d noticed that a large percentage of people who’d asked for some- thing to be put on hold never returned. The product would sit there in the back of the cash desk for several hours. A store Educator might remember to put it back out at the end of the day or the next morning.

So, I decided I would never put our products on hold. Sometimes people got mad because we were the only retailer to do this, but, in 95 percent of the cases, customers would immediately buy the product.

We broke another retail rule by rarely answering the phones in our store. We would answer the phone if there were no customers on the floor, but our priority was always the Guest who had dedicated their time to come into the store and who was maybe already at the cash desk. I wanted us to be really, really good at being present with in-person customers.

The New Year

The move to the new store had been expensive, but the location was already bringing excellent returns. Local media had started to take an interest in the company since lululemon was in a unique position at the forefront of the yoga movement. The press was approaching us and creating free, authentic editorial for lululemon. Attaining free media was another big piece of the new business model I had created. If we created enough innovation, the media would find us. We just had to wait.

Prior to the advent of e-commerce, every retailer knew the holiday season represented 30 percent of a year’s revenues in 40 days. Most retailers go on discount and suffer massively during January and February.

I was feeling great about our sales through December 2000 and January 2001. Lululemon had surged because of New Year’s resolutions to get back to the gym or get into yoga.

The biggest sales day we’d ever recorded in the old store was $2,000. Our slowest day in the new store was multiples of that figure. It was thrilling, but I knew to prepare for the sales dip sure to come in February and March. I scaled back production to ensure we didn’t get in over our heads with inventory.

But then, the end of January 2001 came, and our sales volume showed no signs of slowing. Every day I looked at our sales figures for the telltale dip in volume. And every day, I saw our volume increasing instead.

I knew what was happening was abnormal. Experience told me I was observing concrete evidence that lululemon was over the awkward stage of retail infancy. Our patience was paying off. The spring of 2001 arrived, and sales had not slowed down.

It was incredible to watch this happen, but it also meant our little company had to change to keep pace with our newfound popularity.

The Power of Attraction

The recent change in lululemon’s revenues also coincided with the growth of our small staff.

As we hired more Educators, I noticed a higher number of them were older Super Girls (generally aged 28 to 34), with stories similar to Fiona’s. They had been working 14-hour days in finance, were not dating, and could see no prospects for marriage or children. They dropped out, looking for a better balance in life. Lululemon and yoga represented their myopic ideal of achieving that balance. We hired them as Educators, but their Type A Wall Street personalities swung the pendulum in the opposite direction.

The personality type that made type “A’s” work so hard on Wall Street had them also striving to be the best at zenning out, and this was not lululemon. Lululemon was not in the wellness business – we were in the “good to great” business. We soon had to shift our hiring practices.

Balance for lululemon was maximizing every moment in life. It was knowing when the line-ups were short and jumping on that opportunity so as not to waste a second more than was necessary. We had great things to do and waiting in line was not one of them!

Around that time, I got talking to a woman who lived across the back alley from me. Deanne Schweitzer had been on a swimming scholarship when she became pregnant in her final year. Now a mother of two with no steady job, she was highly stylish and the overall perfect candidate to become an Educator.

“I remember thinking Chip may be a little bit crazy,” Deanne laughs. “One day, I was running in the rain, and this car pulls up alongside me. The windows are all steamed up. The window opens, and its Chip, naked, except for these tiny little shorts. He says: ‘Hi Deanne, wanna lift?’ I was like, ‘No thanks!’ Later he’d told me he’d just come from hot yoga – which I’d never heard of at the time – which explained why he was driving around with little shorts and steamed windows. Sort of.”

I’d initially asked Deanne to work for me in 1999. I’d wanted her to promote lululemon at the high-end athletic clubs, same as I’d tried to do at the Glencoe. However, Deanne wanted to focus on an accounting course and on taking care of her children, so she said no.

Then, when our sales picked up around Christmas of 2000, I approached Deanne again. This time, she said yes. Deanne first came to work as an Educator, helping with the unprecedented sales volume we were experiencing. Within four weeks, she became our first store manager. Bright and quick, with an ability to hire the right people, Deanne would eventually go on to become lululemon’s Head of Product.

Deanne’s sister Delaney, who was managing a bar in downtown Vancouver and was also a single mother, joined the team in 2001. “I loved what the company stood for and the people it attracted,” Delaney says.

Like her sister, Delaney started as an Educator, but she soon moved into a managerial role. I loved being in Delaney’s presence because she so easily absorbed everything I knew about retail, and in the years to come, Delaney would move on to run all store operations and e-commerce (in fact, Delaney would one day become my pick for CEO). Both Schweitzer sisters were superstars; they were corner- stones to the growth and culture of lululemon.

Eric Petersen, like Deanne, was also a neighbour of mine. When I got to know him, he was director of marketing for EA Sports.

As Eric recalls, “Chip drove by my house one day – with no shirt on, of course – and he reached out the window and said, ‘Hey Eric. Come over here. I want you to listen to these audio tapes.’ He hands me some of these cassette tapes by this guy named Brian Tracy. I think he handed me tapes one, two, five, six, nine, and 11. He said, ‘I want you to listen to these, give them back to me when you’re done.’ I thought ‘Well great, my weird neighbour has handed me a series of cassette tapes with several missing – he’s going to think I pinched them.’”

After I had invited Eric to a lululemon Brian Tracy event of 60 people, he said: “I had no idea what type of business Chip ran up there,” Eric adds. “I knew it was some sort of apparel company, but I was blown away by the energy in the room, these young women who felt that they could change the world. I went home that night and told my wife that in 30 years of team sports, I’d never seen a group of people who were so passionate about achieving something and said, ‘I’ve got to go to work there.’”

Eric would join us as director of marketing and would play a pivotal role in our disruptive plan for the 2010 Olympic Games in Vancouver.

One of the next people to join us was Darrell Kopke. Darrell was another person I’d known through Westbeach – he’d been doing sales for a zipper manufacturer that did business with Westbeach (and then lululemon, in its early stages). Having just finished his MBA at the University of British Columbia, I hired Darrell as general manager in November 2001.

“Chip told me he didn’t want to get on another airplane,” says Darrell. “He knew what he was good at, but he wanted me to grow the business. We were an unusual group of people that had no business being successful. We didn’t come from pedigree. We didn’t listen to what anyone else was saying. It was fun. It was exciting. It was us against the industry.”

Darrell was the perfect person at the perfect time to grow lululemon. Like Delaney, Deanne, Shannon, and Eric, Darrell became another lululemon philosophical icon, because he understood why our specific development model connected to the value of the brand.

To have had core Kitsilano people understand my vision and trust that the company would become something great was all I ever wanted. There was no traditional recruiting. In my mind, lululemon was built organically through the Power of Attraction. By sharing my love of athletics, fun, and greatness, I attracted people who were all about the same things. I am completely blunt and transparent, and every- one knew where they stood. We had zero internal politics, and immediate direct feedback was the norm.

As lululemon grew, our teams were often assembled using the same technique. We went out into the community and practiced yoga, we joined local run clubs, and attended athletic events. We did the things that we loved doing, and in doing so, we met great people that we wanted to spend time with. Relying on the power of attraction instead of recruitment analytics or traditional channels allowed us to quickly attract people that were interested in what we were up to.

Most of the people I hired from within the community were athletic, educated, and had a healthy West Coast approach to living. They withstood the growing pains as we morphed from entrepreneurial to professional, growing and shining. It was a synergy thing – one plus one equals three. Lululemon would never have achieved what it did without these initial core players.