Executive Q & A: Sally Jewell, President and CEO of REI

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EXERCISE: I always start the day with a workout. When things get busy, I have to get outside. On [a recent] Saturday, with my husband and dog, I climbed Grand Prospect [on Rattlesnake Mountain]. It feels so nice to get a little mud on your feet, a little mist in your face.

YOUTH: My father was a doctor who came over from England in 1959 when I was 3 to take a teaching fellowship at the UW Medical School. My father asked what people did here. They said, “You join REI, you buy a tent and you go camping.” So that’s what we did. Our first trip was to Mount Rainier National Park.

EDUCATION: It was a different era for women when I graduated from high school in 1973. My college [aptitude] test showed high scores in mechanical reasoning and spatial ability, but my recommended professions were nursing and teaching—the same as all my female friends. At UW, I was going to be a dental hygienist, but my roommate said, “You’re smart enough to be a dentist,” so I did pre-dental. When I started dating Warren, now my husband, his engineering homework looked a lot more fun than mine, so I transferred to engineering. Turns out I’m a natural engineer in terms of how my brain is wired.

CAREER: In engineering school, I worked for General Electric for a total of 18 months over a period of three years. It was a good time for engineers. I had 15 offers for jobs coming out of school and ended up working for Mobil. I came back in 1981 to work for Rainier Bank as an oil and gas expert because I loved Seattle. Oil and gas isn’t found in the most pleasant places in the world and, being a woman, there were things I had to put up with that would be considered illegal now, and it just became tiresome. I also wanted to raise my children around grandparents.

REI: When I began as COO, our growth was stagnating. We invested in the internet, but we underinvested in our retail stores, the core of the business. We were good at colder climates but not so good at southern climates. We developed great, innovative products, but I felt we had an enormous opportunity to analyze our member data better to understand what our customers wanted. We’ve since relocated a lot of our stores to more convenient places where people could find us. Now we’re learning how to reach younger customers. We’re also seeking racial and geographic diversity.

NEW CUSTOMERS: We love it when an outdoor product becomes a hot thing for people who otherwise wouldn’t be coming in our door. We’ve been quite successful in selling jogging strollers after mommy blogs said, “This is the best jogging stroller and REI is the best place to get it.” That probably brought families in that wouldn’t otherwise have been there. Once you walk into an REI, it’s hard not to get a touch of inspiration about going out and playing in the great outdoors.

GETTING PEOPLE OUTDOORS: Studies show children are spending more time in front of a screen. Children have an affinity for playing outdoors, but it’s up to us as adults to help facilitate that. What are the critical points of entry to introduce someone to outdoor activity? College is one point. School groups, YMCAs, and Boys and Girls Clubs are others. We had a store catch on fire a year ago in Eugene, Oregon. A lot of the merchandize was smoke damaged but serviceable. Our insurance carrier agreed to allow us to donate it all to YMCAs in the L.A. area to help get kids there into the outdoors.

CHALLENGES: You don’t want people to use your stores just as showrooms [and then buy online]. How do you compete with that? You have to think about the value you add when someone shops at REI. There are benefits to being a member. Our stores are staffed by incredible colleagues who know the products. And we have to look at how we are doing in terms of price, service, breadth of assortment and convenience relative to our competitors if we want to be in business for the long term.

TAXES: One thing that’s frustrating is to be providing employment in a state and then be penalized with a 5 to 10 percent sales tax that the online retailer is not collecting but that the consumer still owes. The state of Washington estimates there’s about $438 million a year in uncollected sales taxes from out-of-state direct purchases.

DESIGN: In a world where product is ubiquitous, REI apparel is unique. We have invested in our own designs continuously over the time I have been here. We have a top tent designer. We have taken more design in house to make sure we have a compelling value proposition. If you take the top brands in the industry, we want REI products to represent equivalent quality for a lower price or a better product for the same price.

CIVIC ENGAGEMENT: Community service has been very important to me for decades. Whether it’s board work or volunteer work, you learn to lead through influence and not through power. I try to help share that ethos with my colleagues here. In a job like mine, you have a title that commands a certain amount of power, but when you are on a nonprofit board or you are volunteering, your title doesn’t really mean anything other than perhaps your ability to have influence.

INITIATIVE FOR GLOBAL DEVELOPMENT: The initiative was launched after 9/11. As we looked at the attacks on the United States, we thought, “Why does the world hate us?” We saw an opportunity to bring a business voice to the issues of global poverty, the idea that you are never going to solve global poverty if you don’t create economic opportunity in those communities. I was the first chair of the board. We’ve become a pretty effective national organization with people like George Mitchell, Madeleine Albright and Colin Powell involved. I’ve met with CEOs of African companies with sales of more than $100 million. One company produced retroviral drugs in Uganda while another had a seed and vegetable oil business in Zimbabwe. One of our group, the CEO of Cummins Engines, is investing $75 million in Africa. He wouldn’t have done that without those relationships. We would like to go beyond Africa to Latin America and South Asia.

EDUCATION: As a regent at the University of Washington, I’ve seen the university do some amazing things in a difficult environment. It has prioritized cuts in administration first and has worked hard to make sure that access is high regardless of socioeconomic background. Twenty-five percent of our students pay no tuition. The state wants us to create more graduates in high-demand fields like engineering and computer science, but that’s hard when the budget keeps getting cut. One possibility is to charge higher tuition in fields like engineering where you have high potential for earnings and it costs more to educate you.

ENVIRONMENT: Last year, we made $4.2 million in direct donations to nonprofits. We’ve facilitated over 3 million hours of volunteer work on public lands. And that’s not just picking up garbage. That’s swinging a Pulaski and an ax and building trails.

Off the Clock Profile #2: Karl Bischoff

Off the Clock Profile #2: Karl Bischoff

Chairman & COO, Phinney Bischoff
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EDITOR’S NOTE: This is one in a monthly series of miniprofiles featuring local executives “off the clock.”

EXECUTIVE'S NAME, TITLE AND COMPANY NAME.
Karl Bischoff, Chairman & COO, Phinney Bischoff, Seattle.

TELL US WHAT YOUR COMPANY DOES AND WHAT ATTRACTED YOU TO THIS BUSINESS.
For over 30 years, we’ve created innovative solutions for both global and local brands. Since our start in 1982, we’ve evolved from a traditional design house to an experience design studio providing strategic branding, creative and digital services. But one thing has never changed: our unwavering commitment to provide meaningful, engaging and strategic solutions that create valuable experiences across every connection point.

After 20 years as a commercial photographer, I discovered my favorite part of the job was learning about my clients' companies and what made them tick. I started working with my wife, Leslie Phinney, on various projects and we eventually joined forces.

WHAT BOOK/TV SHOW/PODCAST ARE YOU READING/WATCHING/LISTENING TO AND WHY?
I love to read Medium.com, a blog by and for writers. I’ve even been brave enough to write a couple articles for it. I like to watch Roadies, a show about the backstage crew for a touring rock band. I spent my youth as a musician playing rock, blues, jazz, and traveling with an international avant-garde group called Amra Arma. I like reading anything by Neil Stephenson or William Gibson (speculative fiction writers) as well as technical manuals (sorry, what can I say?).

WHAT'S YOUR FAVORITE SPOT IN SEATTLE?
Either home with my lovely wife and two pups, or at Bischoff Boatworks, my boat shop.

WHAT KIND OF CAR DO YOU DRIVE AND WHY?
After many years driving vans to carry musical equipment or photographic gear, I did my time with ragtops. Now the boatbuilding has me driving a Toyota Tundra monster truck with a rack for carrying big stuff.

TELL US SOMETHING PEOPLE DON'T KNOW ABOUT YOU.
In 1972, while on tour with the band in London, we did a biofeedback demonstration for the American ambassador at a U.S. Embassy reception for us.

WHAT ARE YOU PASSIONATE ABOUT OUTSIDE OF WORK?
For the past 15 years, I have been building wooden boats. I am intrigued by the history of the craft. I study how things were done hundreds of years ago by the masters. While I do use modern power tools, I also make some tools myself, as many hand tools are no longer manufactured. Most of the materials and processes I use are similar to those used for centuries. I am currently building a 30-foot wood schooner (two-masted) named Bish, my dad’s nickname, in my shop on the Duwamish in Georgetown. I’m six years into it, with an estimated 12 years to go. I don’t have a ton of time to dedicate to it, but it's fun poking away at it.

› Tell us about your Off the Clock activities. Visit seattlebusinessmag.com/clock-seattle-executive.