Oakley defies conventional beliefs about how to grow a business, how to develop product line extensions, and even how a corporate headquarters should look. But for Oakley, it works. In 2006, the company recorded net sales of $762 million, up 18% over the previous year. In the world of athletics, its eyewear is considered de rigueur.
From the start, Oakley favored revolution over evolution. Founder Jim Jannard was a 25-year-old pharmacy school dropout in 1975 when he pooled together $300 to form a company named after his dog, Oakley, to market a better handgrip for motocross motor-cycles. He made the grip from a new high-traction material he called "Unobtanium" that shaped to the human hand.
The success of the grip spurred Jannard to look at what's wrong with motorcycle goggles as well. Oakley ski goggles soon followed and sunglasses a few years after that. The first products to incorporate lens geometry, Oakley eyewear provided non-distortion lens qualities and precision craftsmanship that high-performance athletes eagerly embraced.
The holder of more than 600 patents, Oakley still puts as much emphasis on its futuristic technology as the look of its products. "'God is in the details,'" says President Colin Baden, quoting legendary architect Mies van der Rohe and claiming Oakley's products are "invention wrapped in art."
Describing Oakley's methodology, Baden says, "We look for problems and we invent solutions from scratch. What we saw in eyewear was that the active outdoor person was not able to get glasses that functioned well in a given sport. We entered the category because no one [i.e., competitors] cared about optics." Baden claims that Oakley eyewear is still unsurpassed. "I could put our glasses up against anybody's, and you would see a superior point of difference. That difference is our juice. We can walk into an account and say, ‘Look, you won't get headaches when you wear these glasses.' Once someone sees and understands that, they are lifelong converts."
To call Oakley an eyewear company, however, is to ignore the eclectic range of its enterprises. "We are a design-driven company," says Baden. "We create things that interest us. When you want to be a company at the forefront, you really can't go into the marketplace and look at what is going on or ask people what they want because all there is is what there is. We are all about what is going to be."
The shock of the new may leave some people uneasy, Baden admits. But for Oakley, living outside your comfort zone is how innovations come about. "The products that we think are the ‘next thing', we call them ‘talking to the people in the front row.' They are the people who get our jokes and can turn around and explain them to the people in the last row. Then everyone goes, ‘Oh, okay.' When our front-row athletes are wearing our glasses strapped to the top of their heads, we sell thousands of them."
Even without such tacit endorsements, Baden says that Oakley would still be driven to explore new frontiers. Indeed, Oakley's office—or "corporate interplanetary headquarters," as it is officially called—looks like a set from "Star Wars". Its bunker-like exterior leads into an equally forbidding vault-like lobby with a torpedo in a cradle on the floor and B-52 ejection seats in the waiting area. The building was designed by Baden, an architect before he was asked by Jannard to head Oakley's design functions in 1996. Today Jannard and Baden are still closely involved in the design process.
"Buildings can be a great vehicle for making a statement," Baden says. "When you come here as an employee, you feel like part of the club. The culture drives the team. That competitive fierceness drives the design features we make. If you are a competitor, you sense that we put a lot of value in what is going on in this place."
What is going on is all of Oakley's design and research and development—and the manufacturing of most of Oakley's eyewear. More than three-quarters of the 417,000-square-foot headquarters is devoted to manufacturing.
Oakley invests heavily in technology, not only in R&D and in the products, but in the machines that make its products. Every machine was created by the Oakley design department. Oakley builds its own parts, invents programs to run cutting tools, and even develops mold processes unheard of in the world of industrial manufacturing. "This is all to drive the quality of the product," Baden explains. "There are no machines on the planet that can make our products the way we want them. We are forced to make the machine that makes our products."
Keeping all of Oakley's R&D and design work in one place offers tremendous advantages, Baden believes. "We use a lot of rapid prototyping equipment. I am a firm believer in sketching and hand models, but I also am driven to get that into the digital world so we can really craft the product and test its functionality." While Oakley's creative process may take months, once the design has been determined, the company can create a model and prototype inhouse in less than a week.
This is radically different from how most companies operate, Baden emphasizes. "There, you might draw a pair of glasses, then go describe the drawing to a developer. The developer rolls up your drawing and has your words in his head. He gets on a plane and flies 14 hours to Asia, where he meets with the head of a factory and tells him what your company wants. His words are then relayed to the factory design engineer. In three weeks, you might get a prototype back from the factory, but that prototype is an interpretation of what just three people thought it should be. You can imagine the diminishing return on a vision that started out really good. Here at Oakley, it is constant evolution, dialog, visualization, modeling, prototyping, back and forth. You get a much better end product and get it much faster."
The R&D and design team keep many unusual objects —wooden guitars, barbells, Elvis pictures—around for inspiration and contemplation. "Our best products haven't started as what they were intended," says Baden. "A pair of eyeglasses didn't start out as a pair of glasses. It started as a blower on a drag racer. We constantly keep it loose in that department so we have the opportunity to discover something different."
Perhaps because of that, Oakley has not shied away from products that do not fit its flagship eyewear line. Interestingly, a portion of Oakley's business comes from making combat boots for the U.S. Special Forces. That came about because Oakley was providing protective M Frame eyewear to the military, and the relationship led Special Forces to ask Oakley to reinvent performance footwear for tactical use. Until then, no one had built an athletic variance for military footwear. Today Oakley boots are standard Special Forces issue. Oakley also now offers footwear for civilians, as well as leather bags and backpacks.
"Our brand has evolved successfully by pursuing design at the highest level to gain a competitive position," says Baden. "This creates a construct where outcome is front-row stuff. It is not about market studies. That is not what we are about."
At the same time, Oakley focuses heavily on appealing to outdoor sports that have as their premise technical performance—e.g., skiing, snowboarding, surfing, cycling, extreme motocross. For each of these markets, Oakley offers a selection of products, including fashion apparel. The brand has also expanded into precision performance products such as watches and wearable electronics.
That does not mean that Oakley will stay contentedly within the confines of these businesses. "The most disappointing point [in the process] is when we launch our product," Baden admits. "It is over. It is all about the hunt, the adrenaline rush. We need our highs. We are always looking for the next thing."
Perhaps Oakley's corporate profile sums it up best: "With a corporate culture dedicated to purpose beyond reason, Oakley blends science and art to redefine product categories, rejecting the constraints of conventional ideas."