AN EXTRAORDINARY COMPANY

Agenda Company Overview Positive Deviance Employee Life & Culture REI’s Leadership Organizational Transformation

Recreational Equipment, Inc. Began in 1938 as recreational cooperative The REI of today… Sells a variety of outdoor gear Offers educational sessions Promotes culture of sustainability

Company Structure and Operations Privately held and operates as a consumers’ Co-Op 130+ stores in the US More than $2 billion in annual sales $114 million shared with Co-Op members through annual dividends

Positive Deviance…

The Co-Op REI customers and employees can become members by paying one-time $20 fee Members paid annual dividend (since 1966), receive special rewards, and get discounts on REI Adventure and Outdoor School packages Allows REI customers and employees to literally become part of their company Builds significant loyalty

REI Adventures REI goes beyond a typical store by planning trips for avid adventurers; the company’s key target market. “Getting people outdoors is our mission, our goal, and our passion. We handle the details—so you can have fun in the world's most amazing places.”

REI Adventures Brings customers into REI mindset, builds trust that REI is more than just a store. Employees can be hired to lead and plan these adventures!

REI Outdoor School A forum for learning about and exploring the outdoors, designed for REI customers of all levels. Classes in cycling, paddling, fitness, hiking & camping, snow sports, climbing, wilderness medicine, nature photography, and more!

REI Outdoor School Good business: Classes directly relating to the store’s different departments More ways for customers to interact with the store in a way other than pure retail.

Culture and Employee Life Warm, inclusive culture - collection of people all passionate about the outdoors Emphasis on a sense of Camaraderie Participation in stewardship projects Outdoor bonding trips with co-workers REI Work/Life Program - encouragement of work/life balance by offering a wide range of services

Benefits Annual incentive (profit sharing) plan Retirement plan that doesn’t require individual contributions Healthcare for all FT & PT employees Tuition Reimbursement to encourage employee betterment and growth Paid time away from work- vacation, sick, 8 paid holidays, “Yay Day”, sabbatical

Leadership: REI’s Mission “To serve our members by selling great gear and promoting an outdoor lifestyle; to help people have fun, appreciate nature, and become stewards for the environment.”

Exemplary Leaders Jim Whittaker Sally Jewell

Organizational Transformation Gradual, Clydesdale-like growth First store opened 6 years after founding Importance of failure: Japan expansion Largest consumer co-op in US REI Values: Dennis Madsen Started w/ Lloyd Anderson and 23 Pacific Northwest climbers who wanted Swiss mountain climibing gear (1938); Anderson leader for 30 years First store came 6 years after forming co-op, and it was three shelves in the back of a Seattle gas station Second store 31 years later, w/ spurts of expansion Dennis Madsen: REI employee from age 17 to age 55, retired as CEO

Why REI Is Extraordinary Organizational Structure Organizational Culture Leadership