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.
Jewell recognized that REI was already a progressive organization, but she further supported existing policies that included flexible or part-time work schedules, health care, incentives, and retirement plans along with humane working conditions where employees are valued. Employee experience, knowledge, and training are considered equally with sales proficiency. As a result of corporate policies, REI is ranked among the top places to work in America.
REI’s corporate mission, however, goes much further than being a good place to work. Jewell and REI consider both the customer and the entire community in which they live of equal importance. Under Jewell’s leadership, random acts of “stewardship,” while appreciated, aren't as valued as stewardship becoming a matter of corporate policy. Call it corporate social responsibility, or by any name you wish, but giving back to the earth and its people is essential if both are to be sustainable in the future. Jewell notes, whether we like it or not, the world is changing through globalization, transportation, technology, use of land, and often misguided politics. Corporations or co-ops must change to exist in the future global economy even if political leadership fails to see issues clearly.
Part of the success of any business, including REI, is understanding a changing world. People are moving from rural areas to cities in larger numbers both here and abroad. People, because of their jobs, are drawn farther way from nature and have fewer opportunities to connect with the outdoors. Major segments of our population have far fewer opportunities to embrace nature, let alone have any concept of a wilderness experience.
Part of this dynamic is how children fit into this new world order. There is less play outdoors, more time in front of a TV or computer screen, greater danger in the streets, longer school or study hours, and far more in the way of organized or structured activities.
Jewell believes that aside from being concerned how all these changes affect children and people, REI can and should play a role in educating its members along with selling products that allow them to get closer to nature. Jewell feels that it is essential for the mental and physical health of people to find emotional respite in nature along with the associated health benefits.
Sally Jewell observed that as more people are drawn to cities for jobs, they are moving farther away from a world where mother nature is in charge. Jewell expressed a deep belief that city dwellers are enriched if they visit the natural beauty and wilderness still available. But, beyond the need for experiencing mother nature, she believes that city dwellers also need more city parks, open spaces, and places where people can shed some of the intensity of the urban environment.
Both she and her Seattle audience appeared to support enlightened environmental policies that comprehend the concept of capacity, wise land use that doesn't overbuild, retention of views, tree protection, open space, and parks.
It’s a breath of fresh air to watch Sally Jewell and REI develop a corporate policy of demonstrating as much concern for the earth and the people who live upon it as profitability. It’s also delightful to understand this policy is consistent with an old American custom of making money.
If done well, sometimes you can have it both ways.