Should REI’s CEO have stayed away from Reddit?
About two weeks after earning wide praise for his decision not to open his company’s doors on Black Friday, Jerry Stritzke, REI’s CEO, fielded questions via an "Ask Me Anything" event on Reddit. Unfortunately, largely negative comments came back.
The executive expected the discussion to focus the Black Friday closure, with the company encouraging people instead to get outdoors. However, after spending two hours on Nov. 10 answering questions, the freewheeling social media site was flooded overnight with complaints from current and former REI employees on company policies.
The complaints focused on pay, hours and benefits as well as the company’s push to encourage membership sales to supports its co-op structure.
One employee complained, for example, that she wasn’t promoted and had her hours cut due to subpar membership sales, despite superlative performance reviews in other areas. Mr. Stritzke the following day answered that he was surprised by the strong emphasis on membership sales when he joined REI two years ago. The company "may have lost sight of the bigger picture" and he stressed performance should be measured on "deep outdoor knowledge and customer service."
Jerry Stritzke, CEO, REI – Image: REI
The debate over compensation included one comment that the retailer should balance its donations to public parks and trails with room for higher pay standards. Mr. Stritzke said REI will pay employees $15 per hour in some markets, although pay is based on the local cost of living. Wrote Mr. Stritzke, "I think we will strike a good balance between our full time and part time employees but the reality is that it’s not an easy problem to solve and you need to factor in healthcare and other benefits."
The CEO vowed to look into both membership and pay issues, although many forum respondents remained skeptical about any positive outcomes.
The thread drew over 4,500 comments and widespread media coverage.
Still, Mr. Stritzke appeared unfazed by the largely negative comments about labor relations with his company, which has regularly ranked as one of America’s best companies to work for.
In an interview with The New York Times for its "Workspaces" section, Mr. Stritzke pointed to his Reddit Ask Me Anything participation as an example of how REI remains committed to an "open dialogue" with its employees and consumers. "I believe in stepping up, listening to all sides and taking action," said Mr. Stritzke. "Transparent leadership is the only way to go in a transparent age."
Editor’s note: REI issued a press release today with news that it has received nearly one million endorsements for its #OptOutside campaign. More than 150 companies, non-profits and agencies that support state and national parks have joined with the company in encouraging people to spend Black Friday in the great outdoors.
- I am Jerry Stritzke, CEO of REI and we’re closing all of our stores on Black Friday. Ask me anything! – Reddit
- REI’s CEO faces employee revolt during Reddit question-and-answer session – The Oregonian
- Jerry Stritzke of REI: If You Can’t Be Outside, Bring the Outside In – The New York Times (tiered sub.)
- Expecting Warm Embrace, REI Chief Is Harangued in Reddit Forum – The New York Times (tiered sub.)
- REI’s CEO faces angry workers on Reddit – CNN
Discussion Questions
Does Jerry Stritzke’s experience on Reddit best exemplify the benefits of a strong commitment to transparency or the risks of social media? How transparent should executives be around labor issues with employees?
Poll
BrainTrust
Jason Goldberg
Chief Commerce Strategy Officer, Publicis
Ryan Mathews
Founder, CEO, Black Monk Consulting
Transparency cuts both ways, positive and negative. I salute Mr. Stritzke’s willingness to appear in a public forum and wish more CEOs would follow his lead. Too often CEOs are cocooned from workers’ and customers’ concerns. An appearance in a forum like Reddit is bound to produce negative comments, but they are just as important to hear as the kind words whispered by underlings and associates who want to curry favor.
Hopefully Jerry knew exactly what he was getting into when he agreed to do the AMA. Gandhi and Mother Theresa would have gotten roughed up if they agreed to do a Reddit AMA.
As a not-for-profit co-op, REI, is in a perfect position to be transparent with employees and customers. If they can’t get comfortable with and find benefit in transparency, then there is very little hope for the majority of publicly-traded retailers.
Rule to my students: never ask a question if you might not like the answer.
Jerry is a great guy and a super leader. Reddit is fine for a co-op like REI. Let them all vent and let the supporters chant JERRY! No CEO should fear the social space. It takes a different style of communicating but it is the transparent world or galaxy of retail that we are now entering. Great work Jerry! Take Thursday off!
P.S. thanks for speaking at our Global Retailing Conference at the University of Arizona last year!
Being transparent around labor issues will always boil down to the same common denominator complaint — wages. Nobody ever thinks they are paid enough or have a great work schedule. It’s usually the worst employees who complain. The same results would probably come from Costco or Trader Joe’s.
You can’t be transparent and be worried about occasional attacks, and you shouldn’t advance a well publicized “employee-friendly” policy without understanding that you will inevitably draw criticism from unhappy workers. Put another way — when you hold up a target you can’t be shocked when people start shooting at it.
Presumably Jerry Stritzke understood what he might be getting into and decided it was worth the flack. How transparent should executives be? Well, how pregnant is enough? Either you are transparent — with all the upside and downside possibilities — or you are opaque, translucent or whatever adjective you prefer to describe a state of partial concealment.
And in the current social media environment, you are likely to be attacked no matter what your record. It’s just part of the new deal.
Like my colleagues, I applaud Mr. Stritzke’s appearance in an AMA (a Reddit feature I enjoy every day). That said, wages for many retail workers lag way behind what they might be, and associates aren’t happy about it.
The transparency that comes along with the proliferation of social channels is undeniable, therefore CEOs should willingly take part in discussions, or initiate them as Mr. Stritzke did.
Customer complaints are one type of issue to address, but internal issues are another. Although uncomfortable to address in a public forum, the volume of negative or concerned comments about employee treatment and salaries indicate there may be some policies to address within REI.
If you are a CEO seeking to effect continual improvement in the enterprise, interactions like this one present ideal opportunities to make those improvements.
Who doesn’t want to be paid more? Who doesn’t want better benefits? Overall, REI’s employees seem to be happy. I happened to make a purchase the other day and did my own “survey” of employee sentiment, asking four employees their thoughts about Black Friday’s closing and the overall REI employee experience. All four were overwhelmingly happy with their jobs.
The CEO that steps up and answers questions, takes some heat and is open to public criticism and praise is the kind of CEO that people want to work for.
I have never been a fan of companies airing their dirty laundry in public. And unfortunately, well meaning CEOs (who increasingly seem to be directly using interactive social media themselves) make this so much more likely to happen than in the recent past when more controlled and vetted communications — both internal and external — were the norm. I’m not sure Jerry’s vaunted “transparency” on Reddit bought him a whole lot with either employees or potential customers in this case.
Stritzke absolutely did the right thing. Are you kidding? Hard to imagine their culture without it being totally transparent. We’re talking about REI!
What you’ll find in situations like this is that the leadership rule of the belle curve applies. 10 percent are happy beyond belief, 10 percent are upset beyond repair, and everyone else is somewhere in between. Unfortunately the 10 percent who are the most upset will make 90 percent of the noise. Stritzke has to solve the issues of the 90 percent, and do the best he can with the noise (i.e., deal with it). That’s his job, and it sure seems like he’s good at it.
Meanwhile, ask the 90 percent how he’s doing, or even the 80 percent in the middle. That’s the real test, sans the sound bites.
I love that Mr. Stritzke took this approach, however it kind of exposed him as not walking the walk that he talks. He believes in transparency but it took him two years and this forum to find out what the real issues were.
I hope that, upon this realization, he will continue to engage his employees and share.
For my 2 cents.
Any time you have more than 3 people in an office, someone is going to be angry. REI is one of the companies I track for the WEF. In the case of REI, their biggest segment is hourly employees. All employees at REI go though a grueling interview process to determine if they are a good fit. To expect the CEO to know that Suzie Creamcheese was passed over for a promotion because her manager felt she wasn’t selling memberships really speaks to the level that REI employees feel they are part of the company. Would Jeffrey Immelt of GE even acknowledge an hourly employee? Doubtful. Would GE bonus hourly? No. But REI does which is part of their compensation.
Factoring in working for a company like REI or Dicks or Bass, REI comes out on top ever time.
Be careful what you ask for because sometimes you will be surprised at the responses. That appears to be what happened here. He can say he was unfazed at the response and comments. But there is no way he would have expected or wanted to hear the earful he got. The next phase is to see what he does in response to the criticism. If nothing, then he is no better than any other profit driven CEO and the people who are in the trenches mean little to him. Let’s watch and see.
Based on the poll response vs. the comments, I think people are confusing “transparency” with “freewheeling.” Casual Q&A sessions (on Reddit), and the unscripted responses they encourage, just aren’t a very good place to discuss company policies; not because honesty is bad, but because they are likely to either encourage statements that will be taken out of context, or devolve into personal gripe sessions, or both. Of course I was notably absent in giving praise to the Black Friday decision.