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knew what was going on, and he could react. He had a clear vision,
and he wasn™t afraid to make hard decisions.
Cork brought Fred Canning in to implement his vision. He
couldn™t have done it without Fred. Fred was the brigadier general,
the kind of guy who™d bail out of the airplane with a parachute,
take Normandy beach, take the hill! Fred Canning got the green
light and ran”and he was tough. Tough! Fred was very aggressive,
very much a disciplinarian. People respected him. He knew the
business and came up through the stores. His instincts were

The pair made a powerful one-two punch”and had to. When they
joined forces at the forefront of the company in the early 1970s, Wal-
greens™ to-do list was long, indeed”from cleaning up the aisles to clearing
out the subsidiaries to clearing the bottom line of red ink.
The first step was discipline. “Fred was very insistent on people being
here on time,” stated Bill Shank, in a considerable understatement.
Canning could put the fear of God even into executives. “During a bad
snowstorm, John Rubino, who was the vice president for human re-
sources, was stuck out on the expressway, at five to eight, with traffic

178 america™s corner s tore

stopped. He was so desperate to avoid Fred™s wrath that he pulled his
car over into the snow, climbed over the fence, and came into the meet-
ing all covered in snow. He was so determined to make that meeting”
and he did.”27
Before they were plucked to lead the company, Walgreen and Canning
already had developed strong opinions about some of the company™s woes”
and how to solve them”during their time together in the Denver office.
“There were all these things in the aisles,” Cork Walgreen told Marilyn
Abbey. “You couldn™t even walk without bumping into something. We
thought we could sell everything and anything.”28
“In those days out west,” Walgreen said in a recent interview, “Sav-On
was the premier store”neat, clean, streamlined”and we were sort of
messy and cluttered, so we wanted to be at least as good as they were. But
it was convincing the rest of the people in Chicago that was the hard part.
They thought if we put it on the floor, it™d sell better; but instead the cus-
tomers just tripped over it and sued us!”29
After Cork was installed in the front office, he recalled, “we conducted
customer interviews, and they told us that the stores were crowded and
messy”which I already knew. So that was the starting point of a big clean-
up for us.”30
Clean up they did. Editors don™t stop the presses to send photographers
and reporters out to watch workers mop floors, dust shelves, and clear clut-
ter out of the aisles, and business gurus don™t write best sellers about the
discipline, determination, and elbow grease such a drive requires. But cus-
tomers notice, and customers care”and that was enough motivation for
Cork and Canning to keep going. In some respects, the duo™s first initia-
tive”clean it up!”best reflected the basic values on which the entire
turnaround was founded: short on sizzle, but lots of steak.
Anyone familiar with Ray Kroc™s compulsive neatness”he was famous
for determining a particular McDonald™s commitment to cleanliness sim-
ply by checking under the ridge of a toilet with a cosmetic mirror”will be
appalled at just how far the famed fast-food franchise has fallen. While
McDonald™s has been failing to fulfill simple customer needs like clean

reinventing the corporation 179

tabletops, clean floors, and clean bathrooms”not to mention fast,
friendly service”a seemingly endless parade of McDonald™s managers
spent the 1990s introducing product after product, gimmick after gim-
mick, while their stock, market share, and customer satisfaction have all
fallen dramatically. (McDonald™s recently tapped Jim Cantalupo, a former
McDonald™s executive from the glory days, to save the troubled franchise.
He has responded by announcing a back-to-basics movement to fix the
underlying problem of basic customer service”the very drive Walgreens
initiated three decades ago.)
Walgreens™ efforts to clear the aisles continues to this day, surpassing its
original standards, taking the principle to extremes they couldn™t have
imagined 30 years ago, as the following story from Dan Jorndt indicates:
By the mid-1980s, Walgreens had succeeded in making its stores much
cleaner and easier to navigate than they had been just a decade earlier.
They had learned that 70 percent of Walgreens™ shoppers were women;
and women had made it clear that they wanted the aisles in every store to
be not only clean and clear but even free of promotional displays.
“Nothing in the aisles!” recalled Jorndt, who was the regional director for
Chicago stores at the time.

“No mess, no clutter. All our surveys said our stores were cluttered.
So we took all the stuff hanging down from the ceiling, took all the
signs off the windows. But the surveys still came back saying we™re
cluttered because although we™d demanded nothing in the aisles,
ever, no displays, we always had an asterisk: ˜Except baskets of
Walgreens products™”these ugly baskets we had up and down the
aisle selling our house brands.
“So I get a call one day from a district manager, Mike Arnoult.
˜[Dan,] can you drop into the store in Wheeler?™ [a Chicago
suburb just five minutes from the corporate headquarters in
˜Mike, it™s not open yet,™ I replied. ˜It opens next week.™
˜I know,™ he said, ˜but I want you to see something.™

180 america™s corner s tore

˜Well, just tell me what it is,™ I said.
˜No, Dan, you gotta come out here and see it.™
˜Mike, I don™t have any time for this,™ I protested. But Arnoult
insisted. So I finally acquiesced, arriving at the store that morning.
And what he™s done is taken down all the Walgreens baskets and
banners. So all the aisles are perfectly clear in this brand new
store. It looked tremendous.
And Mike said, ˜Whatya think?™
And I said, ˜Mike, this looks fantastic.™
˜So Dan,™ he asked, ˜can I open the store this way? Can I do
˜Of course!™
˜But you know the marketing guys will flip when they come in
here and see all those Walgreens baskets down,™ Arnoult said, ˜be-
cause that™s mandatory.™
˜I™ll handle them,™ I assured him, so that™s how Arnoult opened
the store. Well, it wasn™t 24 hours before I got a call from Fred
Canning, who got a call from marketing, asking us to put the bas-
kets back up immediately.
˜Mr. Canning, I will put them back up,™ I said, not wanting to
come off as disrespectful. ˜But I want you to go look at them first.™
˜All right,™ Canning said. ˜I™ll go look at them. But they™re going
back up.™

“And this is where Providence comes in,” Jorndt says today. “The
town of Wheeling is just down the street. Now, dumb luck, Canning
runs into Cork on the way, and they decide to go out to the store
“Well, they walk in the front door, Cork and Canning and Vern
Brunner”the best marketing guy this company has ever had. We™re
all waiting to hear what they™re going to say”and this is where Cork
was a visionary. He said, ˜I think it™s great.™ And you™ve got to give

reinventing the corporation 181

Cork credit: He had cajones. He said, ˜This is the reason why we
haven™t been able to get our aisles clear. We™ve always had the aster-
isk that the Walgreens displays in the aisles are okay. I want this in
every store!™
“That tells you something about Cork Walgreen. He had steel.
Real steel. For a guy who wasn™t in the store 24 hours a day, he really
got it! It™s just like every profession: There are people who get it, and
there are people who never get it. And Cork Walgreen got it!
“And remember, Fred™s the brigadier general, Omar Bradley, and
President Roosevelt just said, “This is it.” And you know what Fred
said? ˜Yes, sir!™ You™ve got to give him credit, too. Not many strong
leaders”and Fred was a strong leader!”can do that.
“That little event changed the way our stores look, markedly,”
Jorndt concluded. “A lot of things happen that work out well [that]
you really don™t think about ahead of time. You figure it out looking
back. But that one decision made our stores so much better”with a
cleaner, brighter, more organized look”that it helped drive our
pharmacy business, because no one wants to come into a pharmacy
and trip over all this stuff just to get to the back of the store. Eew!
They figure, ˜These guys can™t be good at pharmacy! Their stores are
dirty and messy!™”31

Walgreens moved on to bigger refurbishing projects. Just a few years
after customer surveys concluded that Walgreens stores were “junky, dis-
organized, hard to shop, with merchandise clogging the aisles””even
Cork confessed many of the old stores looked “beat up””between 1975
and 1980, Walgreens remodeled 20 percent of the old stores. By 1979,
Walgreens had 688 stores”the result of the company™s first major
expansion since the 1920s”with 45 percent having opened in the
late 1970s.
In the words of former Michigan football coach Bo Schembechler, a
friend of the Walgreens, “You must remember that you are coaching atti-

182 america™s corner s tore

tude as much as skill. I work on a guy™s attitude from the minute he gets
here. Encouragement. Criticism. Screaming. Winking. Kicking. Yelling.
Nodding. Ignoring. It™s all part of coaching attitude, because attitude
equals motivation. If I coach the right attitude, we can win, we can beat
Cork, Canning, and their lieutenants gave Walgreens a new look and a
new approach, but what they really gave the corporation and its employees
was a new attitude”an attitude of discipline, pride, and perfection. That
attitude, more than anything else, would launch the company to heights
never before imagined.

killing of f their lit tle darlings

After Walgreens™ new leaders cleaned up the stores and removed all clutter
from the aisles, they turned their attention to cleaning up the company™s
portfolio and selling off all extraneous businesses and ventures. Early in his
tenure, Cork came to the conclusion that Walgreens was spread too thin
as a corporation”by being involved in too many things that weren™t drug-
stores”and spread too thin as a drugstore, too”by trying to be too many
things to too many customers.
The problem Cork and company faced was one of the corporation™s own
doing. Like most successful U.S. businesses after World War II, Walgreens
loaded up on mergers and acquisitions”though not as voraciously as other
corporations, nor as nonsensibly.
In addition to purchasing Mexico™s Sanborns department store chain
in 1946 and Houston™s Globe chain in 1962, Walgreens opened three
restaurants: Corky™s in 1967; Robin Hood™s in 1968; and Wag™s, a coffee
shop named for Walgreens™ symbol on the New York Stock Exchange, in
1976. They were all retail, all service, but not drugstores”what Walgreens
does best.
Walgreens didn™t stop there. It went on to forge a partnership with St.
Louis™s 50-store Schnucks grocery store chain in 1976, to open 10 optical

reinventing the corporation 183

centers in its Walgreens stores in 1977, and to attempt to revitalize its sag-
ging network of agency stores in the 1970s under John Rubino, who later
served as vice president of human resources.
In each case, Walgreens enjoyed an initial surge of excitement followed
by a long, dull stretch of operating a company or division it only partly un-
derstood”a cycle experienced by virtually every other corporation that
caught the acquisition bug, though many had it much worse than
Walgreens. Most of these mergers and start-ups were rewarding in the
short run but ultimately proved out of step with the direction of the par-
ent company and more distracting than they were worth.
As Lew Young, former editor in chief of Business Week, wrote years ago,

Back in the sixties when conglomerates were the rage, Jimmy Ling
was down in Washington appearing before an anti-trust committee
describing why conglomerates were not in restraint of trade. He put
up a chart that said, “How many people in LTV [then Ling-Temcon-
Vought] know the steel business?” He had just bought Jones and
Laughlin. The answer? A big red zero was the next chart in his pres-
entation. I bet today Jimmy Ling wishes the answer to that hadn™t
been zero, because when Jones and Laughlin went down, Ling lost
control of LTV.33

Tom Peters and Robert Waterman wrote in their groundbreaking 1982
best seller, In Search of Excellence,

It is a simple fact that most acquisitions go awry. Not only are the
synergies to which so many executives pay lip service seldom real-
ized; more often than not the result is catastrophic. . . . [A]cquisi-
tions, even little ones, suck up an inordinate amount of top
management™s time, time taken away from the main-line business. . . .
[W]ith merger mania as prevalent as it is, it seems worthwhile to il-
lustrate rather exhaustively the almost total absence of any rigorous
support for very diversified business communications. . . . Virtually

184 america™s corner s tore

all the growth in the excellent companies has been internally gener-
ated and home-grown.34

Walgreens got religion years before In Search of Excellence came out, but


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