Makower: What worked at REI in terms of things that you were able to do, and the things you learned along the way. Can you name a project that was particularly successful and impactful?
Hagen: I think real work started to happen when we got organized. We realized we required some frameworks — what became now the Higg Index out of the Sustainable Apparel Coalition, which has a set of lenses on environmental and social issues. That came from looking at the whole waterfront of this issue. How do we avoid unintended consequences by making sure we’re seeing everything?
The first step was having a framework-based approach. I came away with five or six key things from that. The first one was that our intuition was almost always wrong. Every time we expected this or that to be the big thing, and when we really got to doing the homework, we found that there were other things that mattered more. So, for example, I thought the shipping was going to be a big part of our carbon footprint. Well, it was, but employee commuting turned out to be even bigger.
I wasn’t expecting that. Now in retrospect, of course, it makes perfect sense. But it wasn’t obvious at first. I think the lesson out of that is that we’re all conventional thinkers to start with, and our intuition of business is based on conventional thinking. Very frequently, our intuition isn’t right, so we have to think in new ways through sustainability frameworks to be able to see the opportunities.
The second thing I found was that metrics matter. Since our intuition couldn’t be trusted, we had to be able to measure things better. So getting organizational metrics on environmental characteristics helped drive our work.
Makower: What did you learn about how to assess the progress you were making?
Hagen: I came to appreciate the difference between incremental improvement and groundbreaking improvement. A lot of folks talk about incremental improvements as being not good enough, because slowing down the car on its way toward the cliff — from Bill McDonough’s metaphor — isn’t the right approach.
However, by working on incremental improvements, we train the organization in new ways. We learn new skills, new competencies, and that opened our eyes to breakthrough opportunities as we started working on a new aspect — say, energy efficiency — and started making improvements. But then we realized that we could actually do things completely differently, like power the store from solar, and that was a breakthrough kind of thing.
So I think that incremental improvements are really important, even if they’re not sufficient, because they set the organization up for understanding what real breakthroughs might be.
Makower: So, what's next for you?
Hagen: I'm not sure yet. So far, it involves a lot of skiing at Whistler.