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In short, Walgreens would never have become the Walgreens we know
today if Chicago hadn™t been Chicago. At this fortuitous nexus of time
and place existed the perfect storm of preconditions for a sensational suc-
cess, including ambition, innovation, and confidence, coupled with the
Midwestern work ethic and bedrock values that made Walgreens™ early
growth possible.
With the success of the first three stores, Walgreen and his management
team™s outlook shifted from cautious optimism to voracious enthusiasm,
snapping up every promising new location they discovered. The company
exploded from five stores in 1915 to nine the next year and to nineteen by




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1919”every one of them at densely populated intersections on the South
Side. Walgreen™s predilection for busy corners remains a central tenet of
the company™s philosophy today, as it is making expansion decisions in the
middle of another building boom.
When he reflected on the company™s early success, Walgreen liked to
reply, “We just grew like topsy!” Though it™s unclear today what that
word means (even unabridged dictionaries don™t include it), it™s a safe bet
that Walgreen intended to express a positive assessment of the chain™s
acceleration.
Most of Charles Walgreen™s reasons for growing so rapidly are pretty ob-
vious”more income, profit, and security, for starters, especially when the
timing was clearly right to take advantage of its winning formula”but
others are less so, including increasing opportunities for the first wave of
eager employees it had recruited and trained.
Of all the positions Walgreens™ employees have filled over the past cen-
tury, you could easily argue that the post of store manager has always been
the most crucial to the company™s success”and the most revered, accord-
ingly, by underlings and superiors alike. Chief executive officers (CEOs)
from Charles Walgreen Sr. to David Bernauer today have all recognized
that the store manager position is the pivot point for the entire company.
When managers are hired, trained, and retained properly, the rest of the
company hums. But if they fail to understand their customers, employees,
or the drugstore business itself, there is not much anyone in headquarters
can do to save them.
Best-selling business guru Peter Drucker once observed, “Whenever
anything is being accomplished, it is being done, I have learned, by a
monomaniac with a mission.”17 At Walgreens, those “monomaniacs with
a mission” have been the store managers more than anyone else.
From the beginning, the Kogans wrote, Charles Walgreen considered
store managers to be the linchpin in the chain and encouraged them “to
think of themselves as independent retailers with a large and worthwhile
organization behind them”not, in contrast to the policies of other chains




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in or out of the drug field, above them.”18 This sense of ownership and
independence inspires the best effort from store managers to this day”and
is one reason turnover at that level is virtually nonexistent.
Walgreen put systems in place to ensure managers™ job satisfaction.
When the company opened a new store, it would install a “veteran” man-
ager (which back then meant simply someone who had already been a
Walgreens store manager previously) to get it started and then hand over
the reins to a youthful go-getter like Goldstine or Starshak. The practice
of putting such young, relatively inexperienced people in charge of impor-
tant stores, which recent CEO Dan Jorndt calls the “quantum leap” ap-
proach of promotion, remains a central strategy at Walgreens.19 At
Walgreens, ability still trumps seniority.
To give the managers a stronger sense of ownership in their stores, from
the start Walgreens gave managers bonuses based on their stores™ profits,
with which they were strongly encouraged to buy Walgreen stock. Roland
Schmitt loved telling the story of how Charles Walgreen would present
him with his regular bonus check but hold on to it tightly, refusing to hand
it over until Schmitt agreed to invest it in company stock. This might
seem coercive today, but as Schmitt watched his portfolio multiply over
the years, he saw Charles™s persuasion as excellent fiscal advice and was
justly appreciative of it.



the pepper pod

As the company grew, Charles Walgreen™s original “world headquarters””
a table and two chairs in the front of his all-important second store”
quickly proved too small for the job. He opened his first separate office at
3470 Cottage Grove Avenue, with some manufacturing facilities at-
tached, before moving the company headquarters to 768 Oakwood
Boulevard, not far from his first store, with four offices for him and his ex-
ecutive team.




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Communication is the key to any good organization, but when Charles
was starting out, it was easy. He was always a naturally outgoing, en-
gaging, and glib man, eager and able to develop strong personal relation-
ships with his colleagues and his guests. By 1919, however, it became clear
that the company™s rapid growth was making it difficult to spread the
gospel among the chain™s 19 stores, hundreds of employees, and thousands
of customers.
Charles combined his flairs for marketing, writing, and relationship
building to come up with a creative solution: The Pepper Pod, a monthly
publication produced to keep the “Walgreen community” connected. In
December 1919, a few months after the Treaty of Versailles was signed and
the Cincinnati Reds won the World Series over Walgreen™s beloved White
Sox in the famed “Black Sox” series, Walgreens published 50,000 copies of
The Pepper Pod, a free publication for employees (called Walgreen World
since the early 1970s).
The first issue ran 12 pages long, in tabloid style, with the table of con-
tents on the front. The range of subjects listed there closely mirrored the
professional priorities of the Walgreens chain and those of Charles Sr.:
helpful health tips, lighthearted amusement, and, always, savvy marketing.
“In presenting the first number of Pepper Pod,” Charles wrote on the first
page, “we are perfectly frank in stating that it is issued for the purpose of
increasing the business at Walgreens Drug Stores. . . . We want the Pepper
Pod to make you more familiar with our methods of doing business. . . . It is
our idea to show you that you will be better served, for less money, at our
stores, than elsewhere.” But, Walgreen added, “We hope to make it differ-
ent from any other store paper, so that you will want it each month.”20 In
other words, there was method to the madness in printing even the fluffi-
est features, to generate more customer loyalty.
The advice offered says a lot about the state of health care in 1919.
People were just becoming self-conscious enough (and wealthy enough) to
care about their appearance in a way farmers decades earlier did not. Tips
on how to “Relieve Bad Breath” appeared on page nine, assuring readers




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they could rid themselves of halitosis “by diluting a little Golden Seal
Antiseptic with eight or ten parts water, using it as a garble and swallowing
a few drops.” To soften your skin, the Pepper Pod suggested that sprinkling
oatmeal in your bathwater should do the trick. (This was obviously writ-
ten before the advent of instant oatmeal.)
The medical advice of the day seems foreign to a modern reader for two
reasons: (1) It tends to be simultaneously more formal and earthy than we
are accustomed to. (2) It is filled with equal parts scientifically sound in-
formation and Farmer™s Almanac“style superstition. In the piece on
“Constipation and How to Prevent It,” for example, the Walgreens experts
advise “exercise in the open air, sleep and proper ventilation of bedrooms,
with abundance of nourishing food, including plenty of green vegetables
and fresh fruits.”
Before the Food and Drug Administration (FDA) and dietitians (the
term had only been coined a few decades earlier) studied such things,
Walgreens offered its views on “Purity in Candy” on page three”getting a
shameless plug for its offerings in the process. “All the candy we sell can
be eaten with perfect safety, in moderation, and we would not advise an
immoderate use of the very best we sell. Use goods temperately and con-
serve your health by abstaining altogether from any edible or confection
about which you have the faintest suspicion.”
The newsletter justified its liberal approach to proferring medical ad-
vice as follows: “As purveyors of health-giving merchandise, we feel it
within our sphere to disseminate knowledge as to natural or, we might say,
common sense measures of maintaining health.” In doing so, Walgreens
added to the centuries-long debate over who, exactly, should be giving out
medical assistance to customers. The company™s stated position in the in-
augural Pepper Pod would be radically revised after World War II by
Charles™s son Chuck.
To attract a wider range of readers, the Pepper Pod also included some
lighter fare, such as rhyming, perky poetry written by an employee named
Marie Geiger, riddles and jokes, like the following.




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HOKUS: Is it true that bleaching hair causes insanity?
POKUS: “Well, I know many a fellow who is simply crazy over a blonde.”

You get the idea.
For the kids, the Pepper Pod printed a story, probably written by Charles
himself”an experienced bedtime story teller”titled “Trotty Twinkletail™s
Thanksgiving.”
Charles™s fervent patriotism and strong political opinions”he was a
card-carrying Republican throughout his life, a true example of compas-
sionate conservatism”also found voice in the Pepper Pod. The first issue
featured an essay on tax money being wasted by the sluggish Chicago
courts and a letter from a Walgreen friend in post“World War I Berlin,
who admitted to being, “homesick as a pup . . . because, believe me, every-
thing is nothing beside the good old U.S.A. You hear that kind of talk in
songs and in poetry, but you don™t know what it means until you go up
against it.” As proof, Walgreen™s friend discussed the German Railroad sys-
tem, which was “almost at a collapse”like everything else”and the
trains are few and very crowded.” The correspondent™s train ride from
Hanover to Berlin took an excessive five hours, with hundreds standing
up the whole way.
The messages weren™t subtle, nor was the commercial intent of the pub-
lication, which Walgreen had made disarmingly clear on page one. With
Walgreens™ manufacturing plant going full speed, Charles was eager to
push their in-store products. The Pepper Pod advertised cold cream, van-
ishing cream, citrus cream, and cucumber lotion for 25 cents to 35 cents a
jar. (Charles™s “focus group” for these products, and many others, was a
one-woman team named Myrtle, who once found herself sampling 10
tubes of toothpaste for the purchasing department.) For the men,
Walgreens offered Cuban cigars, decades before they were outlawed in the
United States, and aftershave lotion for 35 cents a tube, purported to be
“soothing, cooling, and healing, easy to apply, never sticky, and much to
be preferred to plain bay rum or witch hazel.”
Charles also put in a good word for Walgreens™ own “Plum Whip Ice




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Cream . . . to make your Xmas dinner complete . . . a Real Confection, a
Delightful Novelty,” consisting of chopped plums and whipped cream,
mixed, “and all frozen together into a brick of unalloyed enchantment,”
for 60 cents.
Many items listed, however, are still familiar to a contemporary con-
sumer, such as Colgate toiletries, Waterman fountain pens, and Kodak
cameras. The fabulous folding model sold for $29.36, with the basic
Brownie going for $2.86.
Gillette blades cost a dollar at most stores, but only 69 cents at
Walgreens, which Charles felt compelled to defend. “Gillette Blades is
not the only item we sell so cheaply as to invite skepticism,” he wrote.
“Take our Coffee”we sell tons of it”but many people will not even try
it because it seems too cheap to be any good. But it IS good”as good as
any at any price, and better than 90 percent of that sold for me. Don™t be
afraid of anything sold at a Walgreens store, for quantity buying permits
low prices.”21
The Pepper Pod served its purpose; and in the early 1970s, Walgreens
changed the name to Walgreen World. Walgreens has produced 70 volumes
of the Pepper Pod”650 issues, millions of copies™ worth”confirming the
wisdom of yet another Charles Walgreen innovation.



steppin™ out

Like his newsletter, Walgreen believed that “all work and no play” made
for dull boys, so he had no qualms about diverting some of his expanding
fortune for fun. The family bought a new home on Drexel Boulevard cater-
ing to all Walgreen™s favorite pastimes, including rooms for reading, ping-
pong, billiards, and a bar.
In 1910, the Walgreens joined the Waupansa Club on Drexel
Boulevard, a respected social club, so Charles could frequent a more re-
fined setting to play his favorite game, billiards, than the neighborhood
halls. (However, he never stopped visiting the local pool halls altogether.)




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The Waupansa Club also featured bridge nights and dancing. Charles
taught Myrtle how to play bridge, and she returned the favor by teaching
her husband how to dance. Both learned the other™s specialty passably
well, but Charles disavowed ever dancing with anyone but his wife be-
cause, he said, “I would never inflict myself on another lady.”22
With the Walgreens™ elevated income bracket came elevated tastes.
The family joined the comprehensive Calumet Country Club in 1916 in-
spiring Charles to take up golf, which he did with his characteristically
earnest, systematic approach, taking lessons, reading books, studying each
club™s function, and practicing constantly. He soon was as proficient on the
fairways in his forties as he had been on the sandlot diamonds as a kid,
playing regular rounds with people outside the Walgreen Company to ex-
pand his network of friends. Even leisure time was often used to forward
the company™s interests”and since Walgreen always wore a suit and tie
when he played, it might not have been that leisurely, either.

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