In the next posts, I will share some innovations in agreements that work with abundance at all three levels of perceived reality. THORLO is a small textile company in North Carolina (USA) dedicated to the preventive foot health of its millions of consumers. THORLO’s high-tech socks are sold in dozens of countries around the world. THORLO is exceptional not only for its unique hosiery products, designed to provide preventive foot care, but also for its innovative corporate culture. From its founding in 1953, the company has expanded its original offer of outstanding craftsmanship and high quality, in an industry more typically focused on economies of scale, to include a focus on exceptional responsiveness to the consumer’s real needs. From the start, THORLO’s leadership has understood that its success in delivering value depends on the commitment of all of its employees. To that end, THORLO has maintained a supportive, collaborative culture even as the business has grown in size and dramatically increased the scope of its product lines.
THORLO’s business model transformation shows on-going surprising results in business performance decades later. For example, recently THORLO has been able to reduce its workforce by 15% and its inventory by 30%, while maintaining quality, production rates, and delivery schedules. THORLO has been able to maintain a gross margin on branded products that is 15 percentage points higher than its branded competitors, while its gross margin on commodity products is double that of competition. The company has achieved these margins while retaining all production in the US at its North Carolina mill. In fact, THORLO is one of the only hosiery companies still manufacturing in the US.
This is about THORLO’s culture and its observable outcomes. Ecosynomically, what is the inner being that this outward success reflects? Looking at how the THORLO leadership and its community sees success shows three different levels, as captured in the figure below. The first level of success, which is clear to anyone in the organization you ask, is that of sustainable brand stewardship. For the THORLO community, “brand stewardship” is their collectively defined term for the best foot health interest of the consumer. Everything they do is measured against this single arbiter. In addition, success is also measured through their ability to realize sustainable relationships, with all of their stakeholders. THORLO has very clear, measured indicators for knowing how they are doing with their loyal customers, loyal employees, loyal stakeholders, and loyal shareholders, in that order of priority. THORLO also has a third success indicator around realizing sustainable value for these same stakeholders. We see that the first indicator encompasses the broadest, light levels of all five relationships (self, other, group, nature, spirit), while the second focuses more on the verb levels, and the third assesses success at the noun level.
A deeper exploration of the actual practices within the organization shows how THORLO lives into the noun-verb-light levels of the heat map in the figure below. In the “heat map,” green means the behavior is seen clearly throughout the organization, yellow means it is frequently observed, red means it is seen infrequently, and white means it is not seen. In looking at the way the group looks at resources, organization, and value exchange, you can map these experiences at the noun, verb, or light levels. This simple graphic tells a story of high efficiency and effective policies that reflect a healthy noun-reality, the way things look at a very tangible level. We also see healthy expressions at the verb level, reflecting a liquid conversation across areas about the flows of strategic resources. This figure also shows quite a few strategic processes at the light level, explicitly exploring the possibility in the short and long term throughout the organization. All of this is interwoven very clearly in a process-structure that THORLO calls the integrated collaborative conversation, working the continuous transition from light-verb-noun-verb-light.
These two pictures provide a deeper story of how THORLO has been able to sustain its seemingly extraordinary outcomes. It is how they come together as a company, the agreements they make, that allows this completely different, unexpected outcome. These agreements are possible because of the way the community enters the world, its fundamental assumptions, its knowing about abundance.