. 12
( 39 .)


dress shirt, tightly knotted bow-tie, and a white cloth hat”would ask,
“How™re you doing?” with the kind of energy that gave you a little boost
and would then take your order. He™d work the brass taps to draw you a
Coca-Cola, or he would mix you a malt in shiny steel blenders along the
wall and pour your treat into fluted, crystal clear glasses, specially designed
for this purpose.
And that™s where Coulson was born to work. Like so many Walgreens™
cognescenti, Coulson started at the chain™s second store, a star of the
Chocolate Annex, 1914. Coulson was a natural behind the counter, the
kind of guy who could engage whoever sat down at his soda fountain”
young or old, rich or poor”like a seasoned bartender. Coulson loved it
when the traveling vaudeville stars stopped in while taking a break from
their work at the theaters nearby. Coulson would laugh at their jokes and
then pass them on to his customers.
But Pop Coulson made his greatest contributions at the controls behind
the counter. Some people have green thumbs for making plants grow or a
knack for making cars hum. Coulson had a natural affinity for the soda
fountain and a love for creating new concoctions with all the goodies
available behind the counter.
In the 1920s, many drugstores served malts, which consisted of milk,
chocolate syrup, and a spoonful of malt powder, all mixed in a metal con-
tainer and served in a fancy glass. But on an especially hot summer day in
1922, Pop Coulson hit upon his “eureka” invention and added a quintes-
sential item to the American culinary repertoire in the process. To the
tried-and-true malt recipe, Coulson added a generous scoop of Walgreens™
famous Double Rich Ice Cream (manufactured in its own plant on East
40th Street in Chicago), then a second scoop, stirred it together in the
mixer, and served it with two vanilla cookies (from the company bakery)
on the side”all for just 20 cents.
The milkshake was born!

68 america™s corner s tore

Customers lined the block around Walgreens™ Loop store, waiting to try
Coulson™s creamy creation. Walgreen noticed the tumult and quickly
spread Coulson™s recipe to his other stores”now numbering over 20. The
sinful sensation was raved about in newspapers and talked about in every
city where there was a Walgreens. But most of all, it was the object of
much adoration. It was not at all unusual to see long lines outside
Walgreens stores and customers standing three and four deep at the foun-
tain waiting for the new drink. Suddenly, “Meet me at Walgreens for a
shake and a sandwich” became bywords as popular as “Meet me under the
Marshall Fields clock” at State and Randolph in Chicago.36
Once again, Charles Walgreen™s prediction that his soda fountain would
be absolutely essential to his stores as a source of revenue, company
growth, and increased customer satisfaction (which translated into even
higher levels of customer loyalty and patronage) came true. In its own way,
Coulson™s malted milkshake was the fuel for Walgreens™ dramatic growth.
While Walgreens™ Double Rich Chocolate Malted was taking the city
by storm, a young man named Frank Berlin, just out of high school, was
working at a soda fountain in a Duluth, Minnesota, drugstore chain called
Liggett™s. He™d heard of Walgreens™ new drink from salesmen making their
rounds, who told him demand was so great they had 500 mixers working at
once. Naturally, he wanted to see what the fuss was all about; so he took a
train trip to the shake™s birthplace. There weren™t 500 mixers, of course,
but Walgreens did have six mixers at eight different soda fountain stations,
whirring nonstop to churn out shakes for an insatiable public. “You could-
n™t hear yourself think, there was so much noise,” Berlin recalled. “That
was some drink, that double Chocolate Malted. Very, very popular!” He
was so impressed that he embarked on a successful career at Walgreens be-
fore becoming a successful plastics manufacturer.37
“One of our regular customers was a big, tough-looking guy with a scar
on one cheek,” recalled Hubert Wolfe, a fountain clerk at the Walgreens
at Clark and Jackson. “Whenever he came in, he had two equally tough
looking guys with him. He always ordered a Double Chocolate Malted

the s tar t of something special 69

with a raw egg in it. And he always left a dollar tip. I later found out he was
none other than Al Capone.”38

fundamental values

Charles Walgreen™s stores might have been known for milk shakes and
goldfish, but they endured by adhering to the timeless values of honesty
and respect toward Walgreens™ employees and customers. In this over-
heated decade, when sensations disappeared as fast as they arrived”with
flappers, the Charleston, and pole sitting just a few convenient exam-
ples”Walgreens stood the test of time.
Walgreen first sought to treat his employees well, and he believed that
they, in turn, would treat the customers like guests. Although we have no
record of Walgreen™s views on the Haymarket Affair, in which six workers
striking for an eight-hour workday were fatally shot by Chicago police in
1886, or of the deplorable working conditions at the Chicago stockyards,
it is easy to believe that Walgreen™s unusually enlightened approach to
labor relations”especially for his time”was shaped partly by Chicago™s
notorious reputation as the nation™s center for labor unrest.
Walgreen sought to hire the best people available for every opening he
had, utterly unthreatened by talented underlings. He had a keen eye for
ability and character, and he had enough humility to help it flourish in his
“Mr. Walgreen was a wonderful man, [but] a stern man,” recalled retiree
Lester Schaffner, of Oak Lawn, Illinois. “As long as you did your work, you
had no problem with him.” Early in Schaffner™s career, Walgreen came
into his store. “I wanted to make points, so I called out, ˜Hello, Mr.
Walgreen.™ [But] he wagged his finger telling me to come over and said,
˜When I come into this store, I don™t want you to announce me.™ He
wanted to see what was going on.”39
Myrtle observed:

70 america™s corner s tore

Charles always said the reason the business grew was because he was
lucky in the men who came to manage stores. I don™t know how
many times he used to come home and remark, “Well, today I hired
another man who is smarter than I am.” I would make the wifely
comment about nobody being smarter than he was, not in the drug
business. But he would say, “You™re dead wrong; the only really smart
thing about me is that I know enough to hire men who are smarter
than I am.” He certainly did get capable men: men who were far-
sighted, loyal, hard-working, and capable. They all helped to make
Chicago and the business grow.”40

While other companies were still practicing the old-school style of
management”browbeat your employees until they quit, then get new
ones”Walgreen tried to make his stores the kinds of places where he
would want to work. His checkered history as a desultory store clerk prob-
ably taught him better than anything else what not to do to get the best
performance out of his staff.
For starters, Walgreen made it a point to pay his employees better than
his competitors did. His motives were probably equal parts business strat-
egy and altruism (he was an unusually generous man, with friends, family,
and colleagues). He knew if he wanted the best people, he had to pay them
like they were the best. But he also knew the only way to avoid being
handcuffed by a workers™ union telling him how to run his business was to
treat his people well enough so they wouldn™t be tempted to unionize in
the important service jobs. As Chuck put it:

Dad did not disbelieve in unions, and he didn™t mind recognizing
them, like the carpenters and electricians and tradesmen who
worked on our stores, just as long as it didn™t include the pharmacists
or other people who worked in our stores. We paid well, better than
the union rate, so I thought it was stupid for our employees to con-
sider union membership when the [union members™] pay and benefits
weren™t as good as ours. I guess they [thought it stupid], too, because

the s tar t of something special 71

we really never had a movement to unionize. . . . Treating our people
right was embedded in me pretty much by my dad, his philosophy.
We treated the employees well, and still do.”41

Walgreens™ turnover rate, then and now, remains among the lowest in
the retail sector.
More important to Walgreen than saving money was preserving the
culture he worked so hard to establish, a culture that set his people up for
success, not failure. As early as 1916, when Walgreen consolidated the
nine existing stores under the Walgreen Company umbrella, he sought to
protect the entrepreneurial approach that drove the chain™s initial growth:
providing his employees with plenty of incentives to stay with the com-
pany. These included opportunities for partnerships at each store, bonuses
and stock offerings, promoting from within, and giving employees
the autonomy necessary to make their mark. This simple but effective
philosophy has been a central plank in the company platform since the

put ting out fires

In addition to all the intangibles, including goodwill, that accrue from
treating employees right, Walgreen understood clearly that the main pur-
pose of such treatment was to ensure that employees would treat their cus-
tomers right.
There is no better example of Walgreen™s philosophy of customer serv-
ice than his advice on how to handle unhappy customers. It is a treatise of
sound thinking on a tricky but vital topic for almost anyone dealing with
the public”which is to say, everyone”but especially those working in the
often aggravating world of retail. That Walgreen wrote this in late summer
of 1923 in an internal issue of the Pepper Pod”decades before corpora-
tions habitually paid customer relation consultants thousands of dollars
per day for half the wisdom contained here”is rather stunning.

72 america™s corner s tore

Titled “Displeased Customers,”42 Walgreen wrote:

The business of handling displeased customers is simply a matter of a
little tact and a lot of common sense.
A customer who has been inconvenienced for some reason or
other by an unsatisfactory purchase will often lose his temper and
perhaps be quite unreasonable in his arguments. In handling such a
customer, always bear in mind that if you were in his position, you
might be angry, too, and don™t forget that no matter what attitude he
takes, he is a Walgreens customer and must be treated courteously
and with respect.

You™ll note that Walgreen quickly dismisses the “customer is always
right” philosophy for something more realistic (not to mention more sym-
pathetic to his clerk): The customer may well be very wrong, even insult-
ing, but it won™t help you to point it out. Walgreen counseled:

Never argue. Don™t even talk until your customer has told his whole
story. Don™t interrupt. After he has finished his story and is relieved,
tell him in a quiet, controlled voice that you are very sorry that he
has been put to any trouble. Say that you understand how he feels
about the matter, etc., and don™t blame him for being exasperated.

Another sage morsel: Interrupting or objecting to a customer™s rant”no
matter how unjustified”is tantamount to trying to stop a running chain
saw with your hand. You™ll only get your fingers sliced off, and the chain
saw won™t notice. Better to let it run itself out of energy, in its own time,
before taking remedial action.

It sometimes happens that a customer™s complaint is unjustified. In
such a case, explain your side of the matter quietly and calmly, re-
minding your customer that there is this or that to be taken into con-

the s tar t of something special 73

sideration, too; but even though the customer does appear to be
wrong, make an exchange or the adjustment he asks, at the expense
of the store. And such expense will amount to nothing as compared
with the goodwill created.

Walgreen wanted his employees to understand that even if the cus-
tomer was not right, they shouldn™t be afraid to help the customer under-
stand the larger picture, and they should make sure he or she went away
feeling good about the exchange, in any case. Notice also Walgreen gave
his employees carte blanche to “give away the store,” to borrow the termi-
nology of those who take a penny-wise, pound-foolish approach to cus-
tomer service. To allow his employees to dip into the company™s supplies
or cash registers to rectify the situation not only eased the customer™s anger
but also let the employee know that she or he was a valued member of the
Walgreens™ team, one trusted enough to make such decisions without first
consulting with the boss or filling out forms while the customer seethed.
This is crucial, because handling upset customers is often like putting out
a fire: The sooner you get to it, the smaller it™s going to be and the less
likely it is to spread.
And there was something else to be gained. “Displeased customers,
if handled diplomatically, can be converted into strong boosters.” The
most fervent believers, after all, are converts. Characteristically, Wal-
green was thinking of the future, with optimism and an eye on the bottom
line. He™d rather see his employees return a few bucks than lose a repeat
Remember that Walgreen wrote this long before Americans knew any-
thing of the Better Business Bureau, Ralph Nader, or class action lawsuits.
No, this was the era in which Henry Ford displayed the retailers™ contempt
for the public when he stated that customers could buy his cars in any
color they wanted, so long as it was black.
When it came to customer service”and, by proxy, employee rela-
tions”Walgreen was way ahead of his time.


. 12
( 39 .)