11/18/2008 05:12 am ET Updated May 25, 2011

Can Bad News Lead to Good Business?

What to make of the screaming financial headlines of recent weeks? Where does your mind go when you read the coverage? What do you worry and wonder about in the middle of the night?

One thought that keeps coming back to me is the way most New Radical journeys begin: with some kind of shake up, such as job loss, divorce, or illness. Few people undertake a life-changing journey without being compelled to do so (for more about the New Radicals, who are re-imagining their work so that it is more meaningful and makes a difference in the world, please see archived articles).

While we can't control what life throws our way, how we cope with the inevitable difficulties defines us. New Radical pioneers described what was going on in their lives - no matter how painful or disruptive - in positive terms: even as the world eroded under their feet, even as they faced an uncertain future, they believed that good would come of it.

As I was writing my book, I began to wonder if such difficulties might even be good for us. What might the uses of adversity be? This delightfully wry phrase -- "the uses of adversity" - isn't mine. It comes from Shakespeare, and Jonathan Haidt uses it in his book, The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom. Haidt, an associate professor of psychology at the University of Virginia, writes that, "People need adversity, setbacks, and perhaps even trauma to reach the highest levels of strength, fulfillment, and personal development." In fact, he says, researchers have begun to move beyond studying how human beings cope with adversity to focus on the benefits of severe stress - sometimes called "post traumatic growth."

First, Haidt writes, in rising to the challenge, we reveal our hidden capabilities. This, in turn, changes our self-concept: we realize we are much stronger than we once thought. Second, trauma "opens people's hearts and minds to one another," and relationships are strengthened as a result. Third, difficulties change our priorities and philosophies, leading "many people to consider changing careers."

Might we see a silver lining in the black cloud that engulfs the world?

You may recall that I wrote about Nau earlier this year -- an outdoor clothing company that was attempting to redefine business, by finding the perfect balance between beauty, performance, and sustainability. Nau's founders dreamed big, and the company did well until it hit the wall - it was unable to secure late-round financing in a skittish capital market. This, of course, was long before there was widespread talk of a crisis. "We always did like to think of ourselves as pioneers," Ian Yolles, Nau's marketing head, said with a laugh. "Though, unlike some, Nau was not deemed 'too big to fail' and bailed out by the Feds'."

Closing Nau's doors last spring triggered an overwhelming response from their loyal customers. Coupled with a deep belief in what Nau represents, this outpouring was enough to inspire a small group of employees to take another shot. The remaining assets of the company were bought by Horny Toad, a Santa Barbara-based outdoor leisure apparel company, and the new version of Nau began to take shape.

On October 21st, Nau's doors will re-open for business. Some things remain the same. This truly is "business unusual" - unique, stylish, highly functional clothing made in the most environmentally and socially responsible manner possible. And some things have changed - their Fall '08 line will be available through the website and select retailers (including Paragon in New York City, Uncle Dan's in Chicago, and Lizard Lounge in Portland). Nau's Partners for Change program remains intact - customers making purchases online will be able to select which of six world-changing organizations they want to support. Though the percentage donated from each purchase has been reduced from five to two percent, it is still twice the most generous established benchmark and 28 times the national average for corporate philanthropy as a percentage of sales.

It's a great story with a happy ending. And I wondered if the adversity Nau endured hadn't made them better, more sustainable. So I posed the question to Ian. "Going through the fire certainly has caused us to rethink some of the fundamentals of our business. With the support of Horny Toad, and our new plan and approach, we have a much better footing to develop and support a business."

Which brings me back to the questions at the center of this column. Might we learn from the financial shake-up? Might we, for instance, begin to question the assumptions on which our society is based?

If we're reconsidering our consumption habits, for instance, Nau seems to be a step in the right direction. Instead of buying new things every week from "pile it high and sell 'em cheap" stores, why not invest in one or two good pieces each season? Clothes that have multiple uses, that are meant to last, and that help us make a difference at the same time.

Please share your thoughts on the uses of adversity, and how you are rethinking your work and life this autumn. Post a comment below, or write to me at Or comment on Nau's blog at