Outdoor-equipment retailer REI made headlines in November 2015 when chief executive officer Jerry Stritzke gave all of his employees Thanksgiving and Black Friday off. Black Friday is considered one of the most profitable shopping days of the year for retailers.
Last Thanksgiving, more than five dozen national retailers followed REI’s lead in giving workers the holiday off, disrupting the industry status quo.
“We felt uncomfortable with what Black Friday had become,” said Stritzke, whose company was founded 80 years ago as a consumer cooperative. “And we wanted to do the right thing for our employees. Paying 12,000 people not to work on one of the most profitable days of the year would be sacrilegious to a lot of retailers. But we felt strongly that we needed to remind people what we stand for as a co-op.”
Nearly 1.5 million people chose to OptOutside (spend Thanksgiving outdoors with family and friends) in year one, and six million in year two (2016), including over 600 organizations that joined REI.
The move also had a curious effect on REI's connection with its 16 million members across the country.
With more than 140 stores in the United States, REI reported revenue of $2.56 billion last year, and more than six million active members received dividends or credit card rebates worth more than $193 million. It also gave 70 percent of its profits back to the outdoor community, he said, including about $9.3 million to nonprofits.
“A lot of companies need to rethink how they measure success,” Stritzke said. “We have a quadruple bottom line at REI, where we look at our impact on employees, members, the business, and society.”
Stritzke will be the keynote speaker Tuesday at the Conscious Capitalism conference — a three-day confab at the Sheraton Philadelphia Downtown Hotel with 300 business leaders who share the same mission: a purpose-driven business that imparts a positive impact on humanity.
“This gathering is all about getting the most influential, conscious CEOs in the world under one roof,” said Alejandro Velez, 28, a conference attendee who cofounded Back to the Roots seven years ago with fellow University of California-Berkeley grad Nikhil Arora. The start-up displaced Kellogg this year as the provider of breakfast cereal to the New York City public school system, the country’s largest.
Back to the Roots Stone Ground Flakes is the first bio-dynamic, organic cereal with half to one-fourth the sugar offered by other cereal in public schools, Velez said. His organic food company with 23 workers launched the product to 5,000 schools at the same time it sold it at Kroger’s, Whole Foods, and Sprouts, thanks to the support of John Mackey, a cofounder of Whole Foods Market and Conscious Capitalism.
His company’s mission is “to undo food and take food back to how it used to be made in the kitchen, not in a science lab.”
Conscious Capitalism may not be for every firm. A company trying to "do good" will work only if a lot of its consumers will care, said Noelle Nelson, a University of Kansas assistant marketing professor who specializes in consumer behavior. “It looks like millennials care a lot about companies' social responsibility practices, so a company whose main market is millennials would benefit from these practices. On the other hand, these practices are expensive; a company that has consumers who might not value uplifting social practices wouldn't find these actions worth the trouble.”
These Conscious Capitalism executives say their movement has evolved.
“It’s not a matter of cleaning up a fundamentally dirty enterprise, which is what you saw with a lot of the corporate social-responsibility movement years ago,” Stritzke said. “This is about a deeply held belief that the organizations that focus on their purpose are the ones that will win in the long term. Period.”
It’s also about making a difference now, said Mandy Cabot, cofounder and CEO of Dansko, which boasts of making “the world’s most comfortable shoes.”
Cabot’s father, a grandfather, and a great-grandfather were all what she called “classic capitalists” who ran multinational companies and later gave most of their wealth away.
“As much as I loved my dad, the cycle of wealth accumulation and gifting that he grew up in seemed staggeringly inefficient,” she said. “So when I started my own business, I wondered if there wasn’t a better way I could make a lasting, positive impact. I didn’t want to wait until I retired to ‘give back.’ ’’
Dansko employs about 150 workers, is 100 percent employee-owned as an ESOP (employee stock ownership plan), and utilizes 100 percent renewable energy on two Gold LEED-certified campuses.
Founder Roshi Bernie Glassman created Greyston Bakery 35 years ago in Yonkers, N.Y., to treat people equally – regardless of their past.
Greyston is known for its open hiring model. The firm hires without concern for people's past history, including those with a criminal record. Employees make the brownies found in Ben & Jerry’s "Chocolate Fudge Brownie" and "Half Baked" ice cream.
“We invest to bring people in, rather than spend to screen people out,” said Greyston CEO Mike Brady. “We spend on training, mentoring, and pathmaking rather than on background checks, screening interviews, and profiling."
Greyston is creating the Center for Open Hiring in Yonkers to develop new ways of managing human capital. It will offer classes, toolkits, and research.
"Conscious Capitalism is an evolving way of seeing the world through the twin lenses of business efficiency and social justice,” Brady said.