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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