Hap Klopp

Roy Notowitz: Hello and welcome to How I Hire, the podcast that taps directly into the best executive hiring advice and insights. I'm your host, Roy Notowitz, founder and president of Noto Group Executive Search.

Hap Klopp spent 20 years as CEO and President of The North Face. In that time, he turned two small retail stores into one of the most recognized and well-respected outdoor gear companies in the world.

Hap launched a global management consultancy company, HK Consulting, after selling The North Face. He continues to speak around the world on adventuring, leadership, entrepreneurship, and the human side of management. 

He's also the co-author of two books, one on success called Conquering the North Face: An Adventure in Leadership, and one on failure called Almost: 12 Electric Months Chasing a Silicon Valley Dream.

So, I've known Hap for at least a dozen years, maybe longer, and have run into him on multiple occasions at the outdoor industry show. And of course we've had conversations over the years about the outdoor industry and hiring and different projects that he's been working on. I really appreciate Hap being on the podcast today. He's joining us remotely from Berkeley. 

Hap, thank you so much for being here. 

Hap Klopp: Thank you Roy. Nice to be here. 

Roy Notowitz: Back in 1968, you bought a small mountaineering retail shop called The North Face, and you had a vision to design and manufacture technical mountaineering apparel and equipment. Before you started The North Face, did you have any previous experience hiring?

Hap Klopp: I had some, I'm not sure it was extensive, and then as I look back on it, it was probably more about firing than hiring. I went to Stanford, when I was a senior there, my father passed away and we had a small family company in Spokane, Washington that made wood windows, frame, sash, and door.

And it was small compared to the competition, but we had put all the windows in the Empire State Building. And so we had a company that was located at the juncture of the, all of the railroads heading East, and it was a good place to be when they built the company. But when my father passed away, I had to try and figure out how we were going to grow and go forward.

And over the course of a year. I realized that we really didn't have what was required to be able to be successful. We were going to have to move the factory, probably invest millions of dollars, buy more timber because we're getting further away from the timber. But on top of that, the management team that we had in there was pretty dated and pretty complacent.

Great people, and I had known them all my life, but a lot of them just were beyond their born on date. As I sat there, you know, I, I tried to adjust some of the staff and bring in some younger people over the course of that year, but I came to the conclusion it was just too daunting a task to raise the money, to move the facilities and to put a whole team together, coming in.

So I ultimately decided that I would sell the company and I negotiated for a year while I was getting my MBA at Stanford. And at the end of the year, I had accomplished the goal of selling the company. I had a Stanford MBA and, and I was ready to have somebody hire me for their company. Nobody wanted to do that.

There were some funny stories associated with that, but the net was because I couldn't work with anybody, had so many idiosyncratic ideas, ideas like paying women the same as men. The idea of no planned obsolescence in a product. The idea of making a product that lasts forever, a lifetime warranty, all those things I wanted didn't exist in the marketplace.

Roy Notowitz: Tell me a little bit about those experiences interviewing. 

Hap Klopp: I was interviewing the, the classic one was, it was kind of the one that sent me over the edge. It was with Procter & Gamble, and they have an eight hour hiring process, an hour each with eight different people. They invite you into the headquarters, they make an assessment of you and you make an assessment of them.

And the old story about Cincinnati is that if I'm going to die, I want to die in Cincinnati because everything happens a year and a half later there. And, and I sort of felt uncomfortable as I got there because Cincinnati was not Silicon Valley where I had been spending the last four years of my life or five years of my life where the pace was really fast and whatever.

So frankly, I felt a little disingenuous because I always wanted to run a company on my own and taking a job with Procter & Gamble... it was only going to be a waystation along the way, I always believed in being 120% into what I did. If you work there while looking for other jobs, it really sort of smacked to being maybe 80% on the job and 40% on your own behalf, but I didn't have any other choice, so I ended up in this interview.

The first hour was with the HR department and they opened it by saying, "Hap, is your name really Hap or is it Kenneth? We see both of those on your CV." And I said, "Well, it could be either one, but most of my friends call me Hap." He said, "Well, when you work here, it will be Kenneth, because nicknames don't give you the gravitas necessary to manage older people."

Then his next comment was, "And of course you need to wear a white shirt and tie." As you can see by what I'm wearing now and what I've said that I don't believe that your productivity increases by wearing a white shirt and a tie. I, I'm getting the feeling I'm in the wrong place when he asked that question that all interviewers seem to ask, and you wonder why, and that is where they kind of look at the sky as if they're communing with God and they say, "If you were to join our firm, where do you envision you could be in five years?"

And knowing I was out of there. I said, "Well, where I envision I could be is President of Procter & Gamble in five years." The remarkable thing is they offered me a job. While I make a joke out of it, because it is somewhat humorous, it was actually a great interview because most of the time when you interview for a job, they ask you, "What do you want?"

And then you tell them and they say, "Oh my gosh, you're lucky. That's exactly what we do here." Then people sign on and osmotically over a year, or two year period of time, it dawns on them that that was all BS. That isn't what existed at all. 

What the interviewer was telling me is what the culture was in their company and in large companies, and it allowed me to self-select in a way that I always use going forward, which is be really transparent with people because when you sign them on, the key isn't getting them on board. The key is once they're on board, to have them really be productive, and that's because there's alignment between the company's goals and the individual's goals.

And so I, I actually thank the people who were there for doing that because what they told me was with many of the idiosyncratic ideas I had, all those things were something I wanted to insinuate in a business. And I thought, you know, the way to do that is to start your own business. 

Roy Notowitz: It was a serendipitous event that you had that experience.

So then how did you go about building the team to get things off the ground at The North Face? 

Hap Klopp: Well, what I was looking for, what I really believed was I didn't need experts in business. What I needed, people who are passionate about common goals, passionate about changing the world because we're in Berkeley and we thought we were doing that.

We thought taking people out to the wilderness, they would see a better way to exist. We were fighting the Vietnam War mentality, where urban problems existed. We thought we could do something to actually influence the world. We wanted people who were passionate. People who were passionate about the outdoors.

People who were passionate about changing the world. People who were passionate about their ideas. And so I looked for passion primarily without the need for functional expertise. But the idea was that over time I felt I could train them on business and the way to do business. Certainly because I'd had the background of getting an MBA at Stanford and the background of running my family company for a short period of time.

I thought it was good enough that I could train them, and as it turns out, 11 of the people that were part of my early management team ended up running other outdoor companies that are very successful. Jack Gilbert founded Mountain Hardware. Bill Werlin ran Patagonia's International in Japan. Missy Park ended up starting and founding Title Nine and on and on.

So it was about basically developing people who were motivated by a common goal, and then we would share that goal as we moved forward. 

That's an incredible list of people that you helped launch... careers.

Hap Klopp: Well, conversely, they helped us build a great business by their contribution and the fact that we were working as a team with a usually singular goal.

It made us a lot more effective than the competition. Even though we had some great companies, we ultimately competed with. 

Roy Notowitz: So, what are some stories or examples you can share about how you identified people who were passionate, motivated, genuine, and had the same values that you had?

Hap Klopp: Well, particularly in today's world, I would say you don't want to look at a CV. All you have to do is go online, you can almost copy what they have there. You can use spell check so you don't do anything wrong. So what I always felt was just try to talk with people about what they were interested in. In some cases, it could be sport. We've used that a lot, but it could be music.

It could be food, it could be family. It could be a variety of other things. If none of them generates any passion, it's pretty obvious that we aren't going to be able to generate in our business anything that they're going to be passionate about either. So all we had to do, once we found somebody who's passionate, is to try to find if they were really turned on by the things that we were excited about, namely, taking people to the wilderness, about hiking, climbing, skiing.

If they were excited about that, it was great. If they're interested in some of those others. Did they have a basic desire to make the best products? Did they have a desire to be involved in a triple bottom line business? Which is what... one of the things that was key to us. If we can find those things, then sure enough, we had a pretty good candidate for somebody to join our team.

Roy Notowitz: At some point, you likely they made some hiring mistakes. Can you tell me one or two examples of people that you hired that didn't work out and what you learned from those experiences? 

Hap Klopp: Well, the first thing, and we certainly know it more and more as we see it in Silicon Valley, is what you should be doing is failing forward.

Don't be afraid to make a decision, but recognize that some of those are going to actually not work out. And hiring is a critical element where that happens and what you do is you try something, you believe for the best. You test test it. If it doesn't work, you move on and somewhere else. 

Two specifics that come to mind.

One was somebody who was a financial genius who was really passionate about making money that I brought into the company and I thought would be great for the company. Turns out, he ended up being a brilliant and highly successful venture capitalist, but he had a different mentality than we have because our philosophies were different.

The passion was good. Definitely brilliant. Certainly could help in a variety of ways, but it came down to not understanding the culture of the company. What we found when we were hiring people is that sometimes people came to you because of the brand or what they thought the brand was, and they were superimposing their own attitude on trying to change the brand.

And the way a company is successful is being true to its DNA. That's what a brand is. It is your DNA. It is what you stand for. It is not something the marketing department puts together. It's not a tagline. It's not any of those things. It is how you live and exist.

Now, every two years, we tried to have a long range planning process where we spent an inordinate amount of time on talking about the culture, the direction, the non quantitative goals of the company.

At the end of those long range planning meetings, I would say the same thing. I'd say it every two years. People that had been around for a while thought it was a little boring, but the people that hadn't been around thought it was very novel.

Because what I would say is, "I hope we've been so clear with what we've said, that some of you leave the company not because you aren't great employees, but if you can't align with what we're doing, we're not going to change from that. And we'd much rather help you find a job somewhere else in the industry with a company that is aligned with your thinking."

And that is how we did that. 

Roy Notowitz: Yeah, that's sort of like the Zappos model where after orientation, for two days, they offer people money to leave if they don't feel like it's a fit.

Interesting that you did that way back.

Hap Klopp: One thing that we always joked about, but that is if you hire eagles, you can't ask them to fly in formation. And certainly when we had all these passionate people, what we're talking about, alignment around what we stood for or what we believed in, you still had to give them the freedom to be able to make mistakes of their own.

You had to give them the freedom to go somewhere. It was a key to make sure there was alignment on where we were going on how we were going to do the business so that we could allow that delegation of things and didn't have to worry about the decision making that they did. 

Roy Notowitz: At some point, you had to empower your leadership team to hire, and so I'm interested in learning what ways you developed their competency in hiring and how you promoted good hiring or your hiring philosophy throughout the company.

Hap Klopp: Well, there, there's an assumption. What you say is that that we did a good job of it, and we had an HR department, of course that got involved in it, but it was more of the individuals. We normally allocated hiring decisions to the managers, and that was vetted by the HR department.

We didn't delegate hiring to the HR department and then impose that on managers. So that was the first thing. The second thing is, as I said, we had a long range planning process every two years. And in doing that, we established really what we thought the DNA of the company was. We were able to educate the people to make hiring decisions consistent with the overall objective of the company. 

Now, you have to delegate some of those things, and when you do, what you find is not every decision works out, but frankly, not every hiring decision I made worked out either. So it's okay to fail. But it is not okay to persist with something when you know it isn't working.

So we spent as much time encouraging people who are making hiring decisions to make a decision about whether somebody should stay with the company. So we obviously had the usual trial period when somebody came in, didn't make them a full time employee. So if we had to let them go cut early, cut fast.

Let those people go on to another job that's more consistent with what they have. So we encouraged people to do that. And we tried to make people not feel bad about making hiring mistakes because a lot of companies, that's a reason nobody is let go. They just sort of bury those mistakes and either they try to move that person to another division or somehow not be accountable for them. 

Our idea is: you are accountable for them, but a decision that you make, if it doesn't work out, is to, with dignity, let that person go. 

Roy Notowitz: Was there anything that you could have identified as being the reason why somebody didn't work out? Were there any things that you were able to uncover in terms of patterns within that realm of hiring and then people not working out?

Hap Klopp: Yes, for sure. I'm not a big believer in things like "Briggs Meyers" in terms of evaluating people or whatever. I, I think that those are sort of abstract and at too high a level. I'm not sure I'm right on that, but I focus more on the interpersonal relationship because I believe that the way a company really works well is not through a formal structure alone and not where all the decisions kind of elevate through the pyramid to the top and then back down to the other side of the company, but rather across channels where people don't have control of somebody else but they have a relationship with them.

What we usually found was a problem with people we brought in is they were either too hierarchical for the way we ran our company, where they believed in politics and power, or they believed in the fact that it was more important to be right than to make a quick decision. We were ones that always believe that in the changing and accelerating speed of market that was out there, the worst decision was no decision.

And we hired a number of people who as we got larger, were worried about their job or their longevity, and they had a tendency to defer decision making. So, so that was one. We also found that there were a couple of people we hired that didn't honestly believe in the triple bottom line, which we put in, and they thought that probably percolated down from Hap and that isn't how you run a real business. 

This idea of gender equality, this idea of diversity. We spoke 14 languages at all times in our factory because that allowed us to hire anybody who was really a great worker who wanted to come in, also allowed us to expand around the globe, but those things seemed kind of soft to some people who were very technically oriented.

As we grew, we, we found that we had to hire more and more functional specialists who oftentimes came from companies where professionalism cut out or eliminated the human quotient of what we were trying to do, and we were trying to put the human quotient back into that. As we were hiring more and more functional people when they came in, they didn't necessarily buy off on our triple bottom line concept.

Roy Notowitz: How did you incorporate the DNA of The North Face brand into the hiring process? So was there anything that you did to bring that out in that process? 

Hap Klopp: What I really believed in was transparency. Tell the people what the company is about. Let them react to that. Don't let them figure out what it was or don't give them the manual that we had that tells them about the company and have them figure out what it's all about.

Talk to them about what they think about and tell them where we are so they can, in whole part, self-select if they want to stay with the company. Now the reality is some people were so hard-pressed to find a job, that maybe they were gaming the system when they came in. And that's where you make some of the firing errors.

But the, the reality is we tried to, one, be clear with everybody about what the DNA was of the company. And two, ask them, expect them to insinuate that into the conversation with any new potential hires. 

Roy Notowitz: So how did your approach to hiring change over time? 

Hap Klopp: Well, that's a really interesting question, Roy.

Initially, as I was mentioning, we hired for passion. We hired people who basically loved the outdoors. They loved the product. They had a desire to change the world, and what we would do is sort of educate them about business. And so none of that was hiring people at the outset for their functional capabilities.

The person who became the Head of Design, Mark Erickson, actually came in as a janitor working in the company. A person who was Head of Product Development started out in materials. As we got larger and larger, and as the speed of business increased, what we found is we had to start hiring for functional expertise and that was more critical.

We didn't have time to train them in all of the capacities that were needed and the business became more sophisticated overall. I'm not talking about just our business, but the general business of apparel and supply chain. And you had to utilize that as we've got involved in more sophisticated marketing, we needed people who understood those tools, and we didn't have time for all, everybody to sort of learn on the job.

So it changed significantly over time. And if you were to hire for the company right now, and I have no involvement with The North Face at this time, they're two and a half billion dollars in turnover, and in terms of sales, they have to hire for functional expertise because things are moving too fast.

They're growing too dramatically. They can't allow people just to learn on the job. Hopefully there's a few entry points in these companies that still allow people to learn on the job. We, we thought it was great if we could start somebody as a salesperson in our store and then they could elevate themselves into other roles in the companies.

And I think you can still do some of that. Just the majority, in fact, the large majority is going to have to be functional hires. 

Roy Notowitz: That's really interesting. So as a board member and investor and consultant with small to mid size and growth companies, how have you taken that experience and approach and how do you advise them as it relates to hiring? 

Hap Klopp: Well, it goes back to a point that I made earlier. Don't make no decision. No decision is the worst decision. It's the only indefensible one. Make a decision and don't be afraid of failure. If it doesn't work out, then ask the people to leave and move on.

Set up your structure in such a way that isn't a great penalty for the company, but recognize that not every hire is going to work out. Secondly, try to define what your DNA is to understand what it is that you stand for so that when you are having discussions with potential employees, you can be transparent about what you stand for and allow them to tell you if that fits where they're trying to be.

And probably the third thing, effectively recognize that you need to have inclusive hiring. 

Roy Notowitz: Has the pace of change and innovation influenced your approach to hiring in the current day? 

Hap Klopp: You now have to look at people not only for the knowledge that you have about the job, but you have to hire people that know more than you do.

Whether it has to be with the tools that you use. Could be social media, it could be things in, in manufacturing, like additive manufacturing, 3D printing or whatever. A lot of the new technologies, a lot of new ideas are ones that your team doesn't already have on board. So what you have to do is be able to try to bring those in with some of the hires that you have.

And a lot of universities are turning out fabulous students who are really enthusiastic about taking the knowledge that they've collected and applying them in a business. So I encourage hiring young people, people who maybe will make some mistakes, but while they're making mistakes, they're going to really add to the vitality of the organization and bring in new ideas.

And insinuate them into the company that probably would never be learned internally, or if it was, it would be agonizing. Whereas with the student, it just comes with them. 

Roy Notowitz: So as it relates to hiring, what do you know now that you wish you knew 20 or 30 years ago? 

Hap Klopp: Well, this idea that some are going to fail.

I spent probably too much time trying to make people work out who wouldn't work out. I sort of had the Pollyanna belief of living in Berkeley that everybody was going to be a great employee, not recognizing that you need to make quicker decisions if it isn't right. A move that took me a while to get there and I probably should have known that earlier.

I think the, the next thing that I believe I should have known but didn't know at the outset, is that there's more ways to do a job than the ways that one was taught in school. Some of the academic approaches that we used really didn't fit so well into the real world that existed. Because a lot of those have to do with interpersonal relationships and communications, and those are things that they don't talk about in school very much.

And when you're young, you don't think about very much. But the reality is those interpersonal relationships, human characteristics, what's happening to people in the outside world is more effective than what you have. When we started the company, most of us were working 12 hours a day, six or seven days a week, and we didn't have much else that we focused on other than our job.

But as you grow and hire, what you realize, some people may be single parents and they have children and they have to make sure that they go home to take care of the kids when they come home from school. That's a different set of problems that doesn't make them a lesser employee, but we were kind of thinking, "Well, everybody should be like us, why don't we go have beer after work and BS for another five hours about the future of the company?" 

It doesn't work for everybody.

Roy Notowitz: And that's okay. 

Hap Klopp: Yeah. 

Roy Notowitz: I'm interested in hearing about any current projects or interesting things coming up that you'd like to share with the audience. 

Hap Klopp: Oh, there's a lot.

I mean, that's what keeps me vital. I've written a couple of books, one about success, one about failure. Success is called Conquering The North Face, failure is titled Almost. It's about a company in Silicon Valley that should've succeeded but didn't. And it's all done in storytelling in both books because I believe storytelling is a way to convey ideas.

I go around and give presentations and speeches about that because I think failure is the secret sauce of Silicon Valley. I can share that and maybe it helps people learn. I'm doing some interesting work, working with some companies that are disruptive. Anything that's disruptive is interesting to me.

I'm working with one company called 37.5 which applies nanoparticles to fibers or fabrics to change the functional properties of that. They're revolutionizing the way you have cooling in a, in a product. I serve on the board. I work on a company, which is in data visualization. 

Disruption is what's intriguing. Disruption is where the opportunity is. Disruption, I find, plays out in a similar fashion. The problems that you need, whether it's financing a company under those conditions, or whether it's anticipating the changes that will come about or the hiring problems that you will have. All of those things seem to be similar despite the industry that you're in or what is causing that disruption.

Roy Notowitz: That's great. What's the best way to reach you?

Hap Klopp: Well, I can be reached in a variety of ways. I'm on LinkedIn, I'm on Facebook. I actually respond to those things. I'm not too much of a Luddite to be able to do that, and those are probably the best ways to get me. 

Roy Notowitz: Hap, you are amazing. You're a legend. You've built an incredible legacy with The North Face. And I really enjoyed learning how you hire, so thank you so much for being on the show.

Hap Klopp: Well, thank you, Roy, and I enjoy the opportunity to share some of my thoughts.

Roy Notowitz: Thanks for tuning into How I Hire. Visit HowIHire.com for more details and episodes. Sign up for our newsletter to get updates and featured career content.

If you know somebody who might be interested in my conversation with Hap, let them know about our podcast. 

How I Hire is created by Noto Group, an executive search and leadership consulting firm for consumer brands that support healthy, active, and sustainable lifestyles. To learn more about Noto Group, visit NotoGroup.com or follow us on LinkedIn. 

This podcast was produced by Anna McClain.

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