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Sally Jewell and REI: combining nature, service, and community

As CEO, she inherited a progressive organization that had expanded greatly. She's built on the heritage, deepening the cooperative's commitment to both people and the environment.

Sally Jewell is CEO of REI

Sally Jewell is CEO of REI Courtesy of REI

Recently the CEO of the Ford Motor Co., Alan Mulally, returned to Seattle and served as a guest speaker at the Puget Sound Business Journal Live event, where he addressed hundreds of local executives. His reception bordered on a hero’s welcome, because only a few years earlier Mulally shocked many in Seattle by leaving Boeing to join Ford as its CEO. Mually’s leadership and ability to change corporate culture allowed Ford to survive the recession without federal bailout, rising to a global force in auto sales.

Two days earlier, another CEO of a smaller, but growing company was the guest speaker at a meeting of the Seattle Neighborhood Coalition. What is unusual about this event and particular CEO is that chief executives who manage companies with sales in the billions to global customers don’t usually bother making time to talk with local neighborhood groups.

In this case the guest speaker was Sally Jewell the CEO of Recreational Equipment Inc. co-op.  Unlike many CEOs whose major focus is on the bottom line, Sally Jewell is one of a small, but growing number of executives who believe that corporations can and should help shape the culture in which they operate.

At first glance, a corporate policy that doesn’t mention profit in the same sentence with its growth might sound a bit over the top, like some theoretical dream where world peace and hunger is abolished in a single stroke. The reality is that Sally Jewell and her executives are hard-nosed players in a world that is no longer confined to an insular or regional economy, but a business whose corporate influence and operations are global.

For REI, it all started here in Seattle in 1938 when some local mountaineers, Lloyd and Mary Anderson, discovered that mountaineering equipment they needed had to be imported. They set up a cooperative so they and their friends could obtain quality products at reasonable prices. Since then the business grown into 114 retail stores, along with worldwide sales now in the billions.

When Jewell took the helm in 2005, REI had an excellent reputation, quality products, exceptional employees, and a working philosophy that set it apart from other corporations or even other co-ops. REI did have one problem. A major debt. REI had been innovative under the leadership of Dennis Madsen as CEO, but expansion had created debt.  In 2000 when Sally Jewell joined REI as chief operating officer, she worked as a partner with Madsen. Jewell became CEO when Madsen retired in 2005. REI now has substantial cash reserves that exceed the debt when she first joined the company.

What makes Jewell so outstanding, besides understanding markets, management, finance, banking, and making REI profitable, is that she feels corporations can succeed and still respond to the greater society with an inherent social responsibility. REI from its inception has broken the mold as a retailer, but Jewell has both led and legitimized the notion that a co-op whose operations are similar to a corporation can have a conscience and still be profitable. Profits from sales support its overhead, employee pay, and growth. Rather than investors receiving stock dividends, REI has 3.5 million members who receive rebates based on the items they buy.

If you have a sense of humor and fantasize how Sally Jewell might have influenced the culture at REI, it might be envisioned best by remembering an Academy Award-winning movie comedy from the 1980s called “Nine to Five.” The story line involved three women, Jane Fonda, Lily Tomlin, and Dolly Parton, who kidnapped and kept a cold-hearted manager away from the company while they put in place company policies that not only made the company more productive, but also made money. While REI had no cold-hearted manager and Jewell is no Tomlin, Fonda, or Parton, Jewell quietly nourished a corporate culture that changed how business can influence the larger society.


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Comments:

Posted Mon, Dec 20, 10:26 a.m. Inappropriate

Good read.

dman

Posted Mon, Dec 20, 4:55 p.m. Inappropriate

Seem's a bit of a REI PR piece. Did anyone bother to interview any REI employees for this bit of dreck?

Sally may be god's gift to outdoor co-ops, but the lack of verification in this article strikes one as ridiculous.

GaryP

Posted Tue, Dec 21, 9:44 a.m. Inappropriate

What have you researched and written lately Pee Gary?

dman

Posted Tue, Dec 21, 12:26 p.m. Inappropriate

Ok, for instance, I happen to know that 50% of the "dividends" handed out by REI are never cashed. And that REI manages to that 10% dividend, knowing that it won't have to cover all those uncashed checks.

This article fails to mention that she was COO in 2000, that at that time there was a push to spin off REI.com as it's own entity and finance it with bonds like Amazon.com did. Instead it's kept the business in house and IMO does a relatively poor job even 10 years with it's website after the fact.

But really, REI claims sustainability, where are the numbers?

GaryP

Posted Tue, Dec 21, 5:51 p.m. Inappropriate

Calling this article "a bit of a PR piece" is a model of understatement. Why is this person at REI when she should be travelling the land laying hands upon the halt, sick and lame?

If only one tenth of this article is true then it marks a huge transformation for REI. The supposed "co-op" was for years famed for treating its employees as utterly disposable. Its reputation was of being run first and foremost as a very nice earner for the small clique of people in charge. As I recollect the Weekly did a bit of an expose about them maybe 8 or so years ago. The reporter tried hard to pry out the numbers on management compensation but got nowhere.

If that's all changed now, how about the author supplying us the real numbers on management vs. grunt pay there. And everyone in between, too. And maybe a quick summary of the critical numbers on sales, costs, profits that are usually available for regular old publicly traded companies, but that I rather suspect may not be for the "co-op." As in, tell us how much money there is and where it goes. That IMHO would be far more interesting info about our "co-op" than this piece of hagiography.

Posted Wed, Dec 22, 4:51 p.m. Inappropriate

REI openly reports all their financial numbers on there web site. All you have to do is look. How much they earn in profit (1), how much the give in grants (2), how much each employee makes - yes, even the top ones (3), down to how much energy REI uses (4). It is all there.

That is at that heart of Being a Co-op!

1(http://www.rei.com/pdf/aboutrei/2009REIFinancialStatements.pdf)

2(http://www.rei.com/aboutrei/csr/2008/giving-philosophy.html)

3(http://www.rei.com/pdf/aboutrei/REI-Top-4-Pay-2009.pdf)

4(http://www.rei.com/aboutrei/csr/2008/energy-use.html)

PhiloFish

Posted Wed, Dec 22, 11:32 p.m. Inappropriate

Good! That really is a remarkable change.

Posted Wed, Dec 29, 10:13 a.m. Inappropriate

Disclaimer: I've been an REI member since 1969. And I work in the film industry in Seattle.

REI is guilty of amazing off-shoring. While I realize they need to be competitive in today's world, they used to manufacture a lot of their products here in Seattle, and I understand most of that moved to Mexico. In this age of globalism, I would hope that an American coop could produce INSIDE the USA.

BUT then I've also called REI on their TV ads, which were produced by an LA company AND SHOT IN CANADA. REI doesn't even have any stores in Canada, but, rather than finding good locations in Washington or Oregon (or Montana, Wyoming, Colorado, etc) they produced in Canada. What's the big advantage of Canada, you might ask . . . they don't pay the actors residuals, so using Canadian on camera talents saves a bunch of money and takes work from Americans.

So, this PR drivel doesn't particularly see through REI. A shame in Crosscut!

MartyOpp

Posted Wed, Jan 25, 7:31 p.m. Inappropriate

I just stumbled across this article and as a Current employee of REI, I was kind of taken back by all of the negativity. I work at a store on the East coast and am only a sales associate but I have personally met Sally Jewell and from the amount of time that I have spent with her, I think she is a wonderful person. Secondly, I can vouch for the way employees are treated. I (and everyone that I work with) absolutely LOVE our job. I have never worked for a company that treated their employees as well as we are treated. I have also never met so many satisfied and returning customers. As far as my store goes, many of our fixtures are made of bamboo or pressed grass (sustainability), there is an incredible amount of natural light from sky lights to cut down on electricity. Our hot water heater is solar powered and everything that can possibly be repurposed or recycled is. We are offered incentives for commuting by bike, bus, foot, carpool etc. and our managers are more than willing to help you map out routes and will even ride with you the first few times if you are new to biking. Authenticity is one of REI's core values and I assure you, the company lives up to and by every core value. If you have had a negative experience with the company, I assure you that if you let someone know, they will make it right. If you have never shopped with REI, I urge you to give it a shot.

cubreezy

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