Lululemon Organisations And Lean Startups – Listening To The Wisdom Of The Crowd

Organisations and Lean Startups – Listening To The Wisdom Of The Crowd

Sustainability, innovation, growth and expansion cannot be separated and are influenced by what we refer to
as “The Wisdom Of The Crowd”, or the power and influence consumers have.

The end-consumer is the most influential stakeholder in this day and age. Beyond their personal purchasing decisions, they create demand in the market by influencing purchasing decisions of other prospective customers. The multitude of social media platforms has also given the process of voicing opinions greater ease and reach.

Lululemon – The Price of Ignorance

Lululemon Athletica, a Canadian yoga-inspired athletic apparel company, is an example of the price of ignoring the wisdom of the crowd. We examine how this ignorance created considerable negative impact to the Company’s brand, growth and sustainability. Customers became interested in their innovation, which was their driving force.

Previously, clients had complained about how unflattering and see through their fitness yoga pants were. In response, Lululemon’s CEO and founder, Chip Wilson, went on TV in one of the most controversial interviews in recent history. Instead of taking responsibility for the product, he blamed the client’s body shape (as quoted, “Frankly some women’s body actually don’t work for it.”). His comments started an outrage and women deemed them insensitive and irresponsible. Severe damage was done to the company’s image, and within a week there was a drop in sales.

Corporate Philosophy – Beyond Just A Great Product

Lululemon was more than just that of selling sports pants. It had sold the promise of wellness and support for
women, with comfortable and flattering pants that suit their body shape. Lululemon had become daily wear
– where women and men started wearing their line not just for sports activities, but for everyday activities as
well.

The management, in particular, the founder and CEO Chip Wilson, made the mistake of not listening to what his clients were complaining about. He chose to ignore them and did not investigate the quality of his products, or consider the need for improvement or innovation for customers’ satisfaction. He ignored “The
Wisdom Of The Crowd.”

This was one of the most powerful evidence and importance of client satisfaction, and the power that consumers have. Now through the accessibility that consumers have with social media platforms, they can
make or break a business.

In light of his comments, Chip Wilson had to broadcast an apology. However, instead of apologising to his customers – he apologised to his employees and the effect that his comments had on the company culture,
and did not take any responsibility for the product in question. This led to even more outrage by customers,
who took to social media calling the apology foolish and writing off Chip Wilson. As a result clients lost their
trust and connection with Lululemon, choosing to support other brands where their voices were respected and heard.

Never Forget What You Stand For

This case study not only provides lessons to learn for businesses from all sectors, but also reminds entrepreneurs that a business is not just an idea. It is a promise, a dream and a connection that we establish with our consumers to ensure our success.

Lululemon’s sustainability, social impact and manifesto statements formed a large part of the Company’s culture and image that resonated with customers. We reflect on some Key Words from Lululemon’s communications to uncover key learnings.

1.“We communicate our sustainability efforts with honesty, transparency, authenticity, and integrity.”

In his comments, the CEO didn’t honor these key words honesty, authenticity and integrity. Most importantly, there was a loss of communication.

2. “The Here to Be program is designed to support, unite and amplify the work of the yoga service
community.” And “Our focus is on creating a community of practice with our network of partners.”

Lululemon made considerable efforts to support the Yoga community through initiatives such as the “Here to
Be” program. This is the same community they let down by failing to honour the spirit of the community,
unity, support and service. Make sure never to over-promise. Always deliver, even if it means a temporary financial loss – it is better to retain your clients’ loyalty because losing that will cost you much more.

3. “Our manifesto is one way we share our culture with the community. It’s an evolving collection of bold thoughts that allow for some real conversations to take place. Get to know our manifesto and learn more about what lights our fire.”

Lululemon’s manifesto are bold philosophical statements that represented the brand. These statements can be found on Lululemon’s collaterals such as shopping bags. Clients loved showing their bags because it told a story of the person they are or aspire to be. It gave them a sense of belonging to a community that understands and appreciates them, thus enhancing their self-esteem and level of confidence.

With an emphasis on “what lights our fire” – the key word here is Passion. Convey a genuine passion that
your clients can relate to and they’ll become partners in your success and view themselves as important and
vital players.

What Happened To Lululemon Since

Lululemon at one point was worth two times as much as its next closest competitor, Under Armour. They
have since lost market share to competitors, Nike and Under Armour, with CEO Chip Wilson stating that
Lululemon has since “lost its way” in an open letter published to shareholders in June 2016.

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Nadia Al-Sheikh, Founder & CEO of Deal’n. She is a true inspiration for women’s who wish to establish a business from scratch and have potential to handle it actively and smartly.