4 Ways To Improve Your Sustainable Business Strategy, From The Man Who Grew REI

Kevin Hagen learned quite a bit from leading the sustainability charge at REI for the past seven years. Here's what he thinks he did well—and what he wishes he'd done better.

In a series of recent posts on his blog, Kevin Hagen, who just left REI, went into great and transparent detail about the mistakes he made and lessons learned leading corporate social responsibility at the outdoor retailer for the past seven years.

This is especially surprising and helpful to other business leaders because, by many measurements, Hagen's rein was quite successful. During his tenure, the company, the nation's largest consumer cooperative, grew from $1.3 billion to $1.8 billion in annual sales, and from 3.3 million to 5 million active members, even while reducing its environmental impact. With the support of his suppliers—longstanding green brands like Nike, Patagonia, and Timberland—his employees, and the members, Hagen was responsible for taking REI from "random acts of greenness to sustainable business strategy," in the words of former CEO Sally Jewell.

His posts and an "exit interview" with Greenbiz.com founder Joel Makower contain some great insights for business, whether you're going green or not so much. Here are five of the best.

Think "I have a dream," not "I have a nightmare." Build a positive vision of the benefits of change for people to latch onto, instead of resorting to scare tactics. "Success comes from talking about the upside of change rather than the downside of the status quo."

Don't settle for trade-offs. Push to improve on all metrics at once.
REI wanted to cut electricity use, but dim lighting was affecting sales. They redesigned stores with windows, skylights, solar tubing, and LEDs. It was more expensive up front, but sales per square foot increased while utility costs dropped by more than $3 million a year. From 2008 to 2012, REI added almost 40 stores while total electricity use remained almost flat.

When it comes to sustainability, as with other metrics, your intuition is probably wrong, so do the math. "I assumed that moving $2 billion in goods all over the world would make freight the biggest part of the CO2 impact after energy use. When the numbers where crunched, it turned out that freight was 10%, but employee commuting was substantially bigger at 15%." By quantifying and targeting the impact of employee commuting, REI was able to design a commuter reduction program that improved retention and recruitment as well, a nice example of multiple benefits.

You can't be sustainable without collaboration between customers, clients, and even competitors. "Collaboration is an excellent litmus test, in my opinion, for how advanced or how sophisticated a company’s sustainability efforts are."

Bottom Line: "You’ll know you achieved real innovation when folks look at the final solution and say, 'That’s not sustainability; it's just good business.' "

[Image: Flickr user Ton Rulkens]

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