Perfect Balance

Michelle Clements is SVP of Human Resources at Recreational Equipment, Inc., an outdoor gear and apparel retailer. Better known as REI, the company prides itself on unique employee benefits, unique corporate culture and unique core values. Here, in an exclusive interview, she tells HRM’s Matt Buttell about the balancing act of HR.

“At REI we have a unique core value, and that core value is 'balance'”
-Michelle Clements, Recreational Equipment, Inc. (REI)

Michelle Clements has been in the retail industry for 30 years, and she is hesitant to recognize her tenure out loud. Not because she isn't an aficionado of the industry (quite the opposite, as we’ll learn), but because she is a lady and I was always raised that it’s rude to ask a woman’s age. She started in the operations end of retail and, quite literally, grew up running stores. She was a store manager, a district manager and a regional manager, she then oversaw a chain of about 300 stores across the United States; and, then, at one point, she was asked to lead Human Resources. So, in the early 1980s, between being a regional manager and the director of stores, Clements stepped-in and ran the HR department.

It was at this point that she recognized HR was maybe the only division in an organization that lacked long-term strategies. And this wasn’t just the case of the specific company she was working for at that time, but was reflective of companies everywhere. Of course, all that has changed today, but in the early 1980s, while companies had financial strategies, marketing strategies and product strategies, no one had ‘people’ strategies. “The longer I spent running stores, the more I recognized that people are the greatest asset to any company,” she explains when we speak with her in Washington state. “People are the competitive advantage and that particular organization, at least back then, lacked a long-term strategic view about how to nurture, grow and retain great talent.”

So, in early 1991, Clements crossed the line, so to speak, and entered her new career path of Human Resources to build HR into an organization and drive that value proposition for employees. “I’ve stayed on that side of the line ever since.”

Today she is the SVP of Human Resources at REI, which was this year ranked as 12th in Fortune’s “100 Best Companies To Work For” list. It is quite an achievement, given that this ranking places REI as one of only five companies to have been included on the list every year since its inception. And, as if in-keeping with her promise to ensure employees are in a position to really drive value proposition, Clements finds her role encompassing everything from recruiting to training and development to employee relations to compensation and benefits to employee recognition programs and REI’s employee service center. It’s a heavy workload, but one she embraces.

“‘You have to climb the mountains in the hills you love’,” she tells me. “And so, for me, I love the retail industry. REI is an amazing organization that really recognizes that employees are the competitive advantage, and we have amazing people that work here. Because of that, there’s such a fulfillment in terms of the work that I get to do, and how I’m valued in this organization, that really fuels me.”

Of course Clements admits that there are days when the hills are a little steeper or a little higher in terms of workload or what you need to deliver, but the journey is always well worth it. “At REI we have a unique core value, and that core value is ‘balance’. In fact, I don’t know any organization anywhere in the United States that has that as a core value,” she explains “As an employee, and as a leader, one of the roles that I have to demonstrate is balancing the responsibilities of my position, with personal growth and fun. Our mission is to get people in the outdoors, to put people in-touch with their community, and that’s just as true for me as a leader as it is for any employee at REI.”

In line with her responsibilities as SVP of HR, Clements is also the executive sponsor of REI’s Strategic Diversity and Inclusion Initiative. The initiative includes three strategic imperatives that are fundamentally important to REI’s business strategy and the way in which the company does business.

“The first is around employee diversity, and ensuring that we attract, engage, retain and promote diversity in our workforce, and that our workforce really represents the communities in which we do business,” says Clements. To date, REI has 107 stores across the United States, two distribution centers and a headquarters campus, and it is part of their promise to ensure that diversity is represented across all of these functions.

The second strategic imperative is related to diversity in the outdoors, which Clements highlights as a broader concept than just customer diversity. “Our goal is to get people of all walks of life, backgrounds, ages and genders out into the outdoors and enjoying the activities in which we promote, protecting the environment, getting children to experience, for the first time, nature and the joy that nature can bring to their lives.

“And the third one,” she continues, “is around inclusion. It is the idea that if you’re out casting the net to get a broader base of people in the outdoors, a broader base of people working for you, then we can create an environment for which they feel valued, that their differences are celebrated and that there is a tremendous, engaged workforce or consumer-base or community group that we’re working with.

“I am the executive sponsor for the initiative, and we have formed teams of leaders across the co-op, who represent different parts of our business, who have developed long and short-term strategies and goals around these three imperatives.”

Essentially, the strategy is about ensuring that, while there are annual goals that are targeted, REI also knows the work around diversity and inclusion is a journey. “There’s no stated finish line,” says Clements. “How can there be? It requires focus, resources, and a commitment throughout the organization: it’s just another part of my role to really help bring the talent together and deploy this across the co-op in a very natural and fluid kind of way.”

Among the myriad reasons for REI’s inclusion on Fortune’s list, one of those cited was the fact that the employer is well-known for subsidizing healthcare coverage for all its employees. It's a commendable scheme, given the rising cost of healthcare and the current economic situation. But what is it about this particular concept that sticks so steadfast to REI’s principles? For Clements, the answer is simple: “We truly believe that our employees are our greatest asset. Whether they work five hours a week, or they work 40 hours a weeks, they create the customer experience and they create the success for the organization.

“We don’t delineate that a part-time employee versus a full-time employee adds less value, we simply believe that every employee brings value. And so, as we have a large part-time workforce, we really had to search the nation to find a provider that actually had an offer around part-time healthcare. That was back in 2004 and it wasn’t something that you saw many organizations offer. In fact, I still don’t know of another retailer in the US that offers the part-time healthcare plan that we offer our employees.”

Ultimately REI felt very strongly that this was an important thing to do, to cover the lives of their employees, and in many cases, explains Clements, before this their lives were either uncovered or they were paying six to eight times the amount the REI could offer them. “We just found something that was affordable,” she explains.
 
The commendations for such a well-respected healthcare plan don’t just stop at Fortune, however. In fact, on Mother’s Day of this year, REI’s CEO Sally Jewell, together with six other business leaders, joined President Obama for dinner at the White House. All were brought together as thought leaders who could educate his staff in terms of how the country might go forward in terms of healthcare coverage. For Jewell and REI this was a true reflection of the unique offer that the company provides around healthcare.

Incentivized
But incentives go far beyond just healthcare options at REI. Take recognition, for example. “Our ‘Anderson Awards’ program is very unique because peers nominate peers, and then peers vote in terms of who is the Anderson Award winner for their division or store,” explains Clements. “Then we fly all winners to our headquarters where they spend three days really celebrating their contributions to the organization. And then, and of course this only happens at REI, they get a ‘rock of fame’. We are known for historically being rock climbers, after all,” she laughs.

“One of the programs that we instituted about three years ago was around workplace flexibility, and really recognizing that employees’ lives are very complex,” notes Clements. “So what we’ve encouraged our employees to do is to get the work done in a way that works well for the company, and for them. We have promoted tele-working and customized work schedules, and if somebody can work 7:00 am to 4:00 pm, versus 9:00 am to 6:00 pm, or a compressed work-week of four days, or a job-share with someone else, then that’s fine by us.”

REI is also very committed to getting people off the road, and so if the company can have people working from home and therefore not have cause to use a vehicle the company encourages that. That also aligns around enabling the company to reduce its impact on the planet. Further to this, four or five years ago, REI deployed five van pools at its Washington headquarters to minimize the number of workers travelling individually to and from work. Today, the van pool figure is closer to 20. “These are van pools where the employees become a trained, licensed driver and we fill these vans every day with their co-workers, people coming from all over the greater Seattle area,” explains Clements. “As a leader, I ride the van one or two days a week, and I really view that as setting the example. I think it’s very noteworthy to employees when I’m catching a van at 5:00 p.m. and getting out the door and my peers in the senior leadership team also actively van pool each week.”

In addition to all of the programs that are currently in place at REI, the company also completes a formal employee engagement survey every year. “We have a tremendous participation in the survey, and we have tremendous engagement scores across the co-op, that are really consistent, division by division,” says Clements. “We are very committed to conducting this formal survey every year, and we publish the results transparently across the co-op. And one of the things that we really advocate is that everyone participates if they’re interested in doing so.

“We don’t just measure to measure,” she continues. “We measure, and then we form action teams in every store, and in every division. And those action teams are based around what strengths we want to make sure we protect and foster, and what the areas of opportunity are.” So, if REI have a team in the finance division, for example, that gets a low score in recognizing employees, then a leader in the finance division will form a team of different employees to put together a strategy around how they could do a better job in recognizing employees on a daily, weekly and monthly basis. Then, the leader would measure that within their team throughout the year, looking for incremental improvement. “We’re very committed to asking our employees for their feedback,” says Clements. “And we aim to do that in more ways than just the employee engagement survey.

“For example, we don’t call our executive officers, executives. They’re called the Leadership Team. And there are 15 Leadership Team members for the co-op. One of the unique programs that we offer is, as a leadership team member, I am assigned to a group of stores every year, and every year that group of stores changes. This year I have Michigan, Minnesota, part of Washington, and part of Oregon, and my job is to go out, contact the store managers, contact the retail director and go to those stores and hold a session with all the employees in the store, share the mission and the vision of the co-op, talk about strategic imperatives for the year and then just open a Q-and-A time.”

Commitments
Alongside all the efforts of employee engagement, recognition and wellness, there is also a great deal going on at REI to promote environmental stewardship. After all, it might be a little backward if such an outdoors company were not showing a responsibility to the environment. In fact, today the company has a 2020 goal to be carbon-neutral in its business operations.

“During the last decade, we have gotten a lot more formal and organized in our efforts to address our impact on the planet,” explains Clements. “We now have a corporate social responsibility division that helps us evaluate and measure what we’re doing across our best practices and insure that we get a return that will be strong.”

For example, REI is now retro-fitting its stores with solar panels where it can and where it makes sense, and looking at the energy savings for that. “Our social commitment and involvement in our communities have always been a way of life, but we’ve recently gotten more focused on where we can make the greatest impact.”

In addition to that, as REI opens new stores, teams closely examine the materials with which those stores are built and Clements explains how new locations use the US Green Building Council’s LEED certification during their construction; this includes REI’s new distribution center in Bedford, Pennsylvania. “It’s about looking at building design, sustainable fixtures and technology such as solar panels, and as we add to our locations, ensuring that we’re doing that with a very green footprint.”

Clements counts herself lucky. She explains, however, that her leadership footprint is also how she is measured, and how the ability to achieve the kind of balance that she demonstrates in her role comes from having a great feeling of teamwork. “I have an amazing team in HR,” she professes. “There’s a focus to empower people to help deliver the great work that we’re doings. Being a privately-held co-op, the roots of REI, is all about being a team. It’s never about an individual. The work we do together is very fulfilling, and I feel like I learn as much from the people around me as, hopefully, they will learn from me. It allows us to be, well, balanced.”

Winning Streak

REI is one of just a handful of companies to have appeared on the Fortune’s 100 Best Companies to Work For list every year since the magazine began compiling it in 1998.
At the time of this years ranking, REI President and CEO, Sally Jewell, said: “It's a great honor to be recognized as one of the country's best places to work. The biggest reason for our continued success is our passionate employees who not only inspire and educate our co-op members and customers for outdoor adventures, but enthusiastically volunteer in their communities.”

So what puts REI among the best in America?
• A retirement plan that doesn't require individual contributions
• Healthcare benefits for all, including part-time employees
• Gear discounts and free gear rentals
• Encouragement of work/life balance
• Outdoor-focused culture that encourages outdoor activity
• Camaraderie, open communication and opportunity for advancement
• Gear grants to take on a personal outdoor challenges
• Community involvement and support for non-profit organizations
• Incentive pay programs