Executive Crisis at Lululemon: Who Is Responsible for Establishing Company Culture?


This case reviews the sudden exit in February 2018 of CEO Laurent Potdevin from the Vancouver, Canada-based women’s athletic wear company Lululemon. It was not clear at first whether Potdevin had voluntarily resigned or whether the board of directors had requested that he step down. News later broke that he was responsible for encouraging a toxic work culture at the company. In the wake of his departure, investors feared for the future growth of the brand. Employees pointed not only to the CEO, but also to the Human Resources Department of Lululemon and the board of directors for failing in their duties to promote a positive work culture. Market analysts, looking to identify reasons for the executive crisis and forecast the company’s next moves, noted that Lululemon—being primarily a woman-oriented brand—should be led by a woman. This case encourages students to discuss how a CEO’s departure impacts the multiple stakeholders of an organization, including employees, customers, and investors. They are also asked to explain reasons for the rapid turnover in executive leadership at Lululemon and imagine a way forward for the company. More broadly, the case prompts students to consider who and what forces drive corporate culture: how much responsibility do CEOs bear for their organization’s cultural issues, and how do leaders share this responsibility with human resources, the board of directors, and others within the company?

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