Eric Artz, the CEO of REI, has announced his retirement. I love REI and am sorry to see that it has been struggling financially lately. I write this blog to focus on leadership in general and Artz’s role as a leader in particular.

I met Artz on the day he became CEO at the REI annual meeting in D.C. in May 2019, the company’s first annual meeting outside Seattle. As a side note, the REI flagship store opened in 2016. It took over the long-abandoned Washington Coliseum and Uline Arena, where my mother saw the Beatles play their first concert in America in February 1964.

Leaders need followers

During the annual meeting, REI’s board president, Steve Hooper, had two official duties, one of which was announcing the board’s selection of Eric Artz as the company’s next president and CEO. Artz had been with REI for several years before his elevation, and it was clear that the audience trusted and respected him. There were over 200 people in the REI store for the meeting, which was also a pep rally and a party. The place was full of co-op members, store employees, and managers nationwide. When Hooper announced Artz as the next CEO, the room thundered in a standing ovation and shouts of joy. Two managers that I was sitting next to were thrilled beyond measure.

How often does a CEO get a standing ovation and loud cheers from his or her workers when that person is announced to lead an organization? My guess is not that often.

There was a clear mutual admiration society between the CEO and the employees on hand that evening. Artz spoke from the heart when he said to the REI employees, “you inspire me…You bring your passion, you bring your love for the outdoors to our customers, you help more people get outside, you have an impact in your communities.”

The leadership shadow, the leadership silhouette

Zach Hudson leads talent management and leadership development and has a podcast on leadership, Passing the Baton. In one episode, Hudson asked people to think about the following: “what leader shadow are you casting?” Since a shadow can be good or bad, I prefer to think of the positive aspects of a leadership afterglow as a silhouette rather than a shadow. Hudson said, “[g]ood leadership cascades out and impacts the team long after a leader leaves the room. Like a shadow, it follows a person and can be even larger than the person themselves.”

In his book Leaders Eat Last, Simon Sinek discussed how an organization’s culture stems from its leadership. I am on board with Sinek, who points out that “nurturing trust and cooperation fosters loyalty, sustainable growth, and innovative thinking. Conversely, rewarding self-interest and short-term gain often breeds insecurity, inhibits collaboration, and threatens long-term success.”

Eric Artz led by example at REI when, during the pandemic, he suspended his pay and refused additional compensation incentives. The board also took pay cuts. Those funds were refocused to help keep paychecks going for people in the field during uncertain times. In the How I Built This Podcast interview with restaurateur Danny Meyer, Meyer emotionally discussed how he had to let go of a substantial part of his staff during the pandemic and worked tirelessly to help those people find new work. He said that if we could not be an employer to those people, we want to be the best former employer.

I have seen up-close leaders who govern by fear or who could, before seeking a “win,” benefit from the focused learning and relationship-building described by Michael Watkins in The First 90 Days.

Mirror, mirror on the wall

Hudson recognizes that the people who work for a leader are “highly influenced by what [the leader says] say and communicates to [the team].” Hudson offered several helpful points for consideration:

• Does my communication align with the larger direction and vision?
• Is my communication inclusive of others?
• Does my communication instill trust and confidence?
• Is my communication clear?
• Do I have strong active listening skills?
• Do my actions match the message that I communicate?
• How supportive are you in prioritizing other’s well-being?
• Do your priorities align with the larger business goals?
• Are there unresolved questions or drama that need to be addressed?

Making people feel welcome

Steve Hooper, whom I mentioned above, was the REI board chair and the former CEO of AT&T Wireless. Hooper was named Director of the Year (2019) by the Puget Sound Business Journal. One of the highlights of his honor was how he goes out of his way to make new board members feel welcome. Being new to something can be intimidating, and making people feel appreciated and welcome is important. As interim CEO at CDIA, I instituted our first-ever new board member orientation. The program was so successful that some board members who had served on the board for years asked to have that orientation, too.

In an organization starving for connections, be the connector.

Without money, there is no mission

REI is well-known as a company that gives back to outdoor groups, veterans, its people through profit-sharing, and beyond. Artz said “REI’s purpose is to inspire and enable a life outside for everyone. We strive to connect people to a life outdoors and encourage them to protect it.” But that good cannot be accomplished without revenue.

Board chair Hooper said at the 2019 annual meeting, “if you don’t have margin, you can’t have your mission.” Amen to that. I have spent my career in the association world, representing member-driven organizations.

The need to drive revenue (dues and non-dues) is mission-critical for associations as they seek to advance the interests of their members. I am proud to have served as a dues revenue growth engine for the Consumer Data Industry Association (CDIA), and as acting CEO, I helped push record sponsorship growth for CDIA’s annual meeting in 2023. Money and mission are inextricably linked, whether you are a retail co-op, like REI, a trade association, or the Mayo Clinic. After all, Sister Generose Gervais, a founder and thought leader of Mayo Clinic, is often quoted as saying, “no money, no mission.”[1]

Raising money, generating revenue, and pushing profits are hard, but without it, there is nothing.

Bringing this in for a landing

I met Eric Artz just once. I admire his leadership and energy. I share his passion for REI, the outdoors, the people he leads, and the places he preserves. Steve Hooper has emulated that leadership as the chair of the REI board and the need to make money core to the mission. Zach Hudson has thoughtfully reminded us that actions have consequences. Danny Meyer shows how a leader can succeed with empathy and compassion. Michael Watkins offers leaders a path to success.

“Leadership is an action, not a position.”[2]

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[1] No Money, No Mission: Addressing Tensions Between Clinical Productivity and the Culture of Medicine, Beckman, Thomas J., Mayo Clinic Proceedings, Volume 94, Issue 8, 1401 – 1403.

[2] Mari Carmen Pizarro, Leadership Is Action, Not A Position: How To Develop It, Forbes, Sept. 22, 2023.