and he wasnâ€™t afraid to make hard decisions.
Cork brought Fred Canning in to implement his vision. He
couldnâ€™t have done it without Fred. Fred was the brigadier general,
the kind of guy whoâ€™d bail out of the airplane with a parachute,
take Normandy beach, take the hill! Fred Canning got the green
light and ranâ€”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 punchâ€”and had to. When they
joined forces at the forefront of the company in the early 1970s, Wal-
greensâ€™ to-do list was long, indeedâ€”from cleaning up the aisles to clearing
out the subsidiaries to clearing the bottom line of red ink.
The first step was discipline. â€śFred was very insistent on people being
here on time,â€ť stated Bill Shank, in a considerable understatement.
Canning could put the fear of God even into executives. â€śDuring 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 americaâ€™s corner s tore
stopped. He was so desperate to avoid Fredâ€™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 meetingâ€”
and he did.â€ť27
Before they were plucked to lead the company, Walgreen and Canning
already had developed strong opinions about some of the companyâ€™s woesâ€”
and how to solve themâ€”during their time together in the Denver office.
â€śThere were all these things in the aisles,â€ť Cork Walgreen told Marilyn
Abbey. â€śYou couldnâ€™t even walk without bumping into something. We
thought we could sell everything and anything.â€ť28
â€śIn those days out west,â€ť Walgreen said in a recent interview, â€śSav-On
was the premier storeâ€”neat, clean, streamlinedâ€”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, itâ€™d sell better; but instead the cus-
tomers just tripped over it and sued us!â€ť29
After Cork was installed in the front office, he recalled, â€śwe conducted
customer interviews, and they told us that the stores were crowded and
messyâ€”which I already knew. So that was the starting point of a big clean-
up for us.â€ť30
Clean up they did. Editors donâ€™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 donâ€™t write best sellers about the
discipline, determination, and elbow grease such a drive requires. But cus-
tomers notice, and customers careâ€”and that was enough motivation for
Cork and Canning to keep going. In some respects, the duoâ€™s first initia-
tiveâ€”clean it up!â€”best reflected the basic values on which the entire
turnaround was founded: short on sizzle, but lots of steak.
Anyone familiar with Ray Krocâ€™s compulsive neatnessâ€”he was famous
for determining a particular McDonaldâ€™s commitment to cleanliness sim-
ply by checking under the ridge of a toilet with a cosmetic mirrorâ€”will be
appalled at just how far the famed fast-food franchise has fallen. While
McDonaldâ€™s has been failing to fulfill simple customer needs like clean
reinventing the corporation 179
tabletops, clean floors, and clean bathroomsâ€”not to mention fast,
friendly serviceâ€”a seemingly endless parade of McDonaldâ€™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. (McDonaldâ€™s recently tapped Jim Cantalupo, a former
McDonaldâ€™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 serviceâ€”the very drive Walgreens
initiated three decades ago.)
Walgreensâ€™ efforts to clear the aisles continues to this day, surpassing its
original standards, taking the principle to extremes they couldnâ€™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 Walgreensâ€™ 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.
â€śNothing in the aisles!â€ť recalled Jorndt, who was the regional director for
Chicago stores at the time.
â€śNo 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 weâ€™re
cluttered because although weâ€™d demanded nothing in the aisles,
ever, no displays, we always had an asterisk: â€˜Except baskets of
Walgreens productsâ€™â€”these ugly baskets we had up and down the
aisle selling our house brands.
â€śSo I get a call one day from a district manager, Mike Arnoult.
â€˜[Dan,] can you drop into the store in Wheeler?â€™ [a Chicago
suburb just five minutes from the corporate headquarters in
â€˜Mike, itâ€™s not open yet,â€™ I replied. â€˜It opens next week.â€™
â€˜I know,â€™ he said, â€˜but I want you to see something.â€™
180 americaâ€™s corner s tore
â€˜Well, just tell me what it is,â€™ I said.
â€˜No, Dan, you gotta come out here and see it.â€™
â€˜Mike, I donâ€™t have any time for this,â€™ I protested. But Arnoult
insisted. So I finally acquiesced, arriving at the store that morning.
And what heâ€™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, â€˜Whatya think?â€™
And I said, â€˜Mike, this looks fantastic.â€™
â€˜So Dan,â€™ he asked, â€˜can I open the store this way? Can I do
â€˜But you know the marketing guys will flip when they come in
here and see all those Walgreens baskets down,â€™ Arnoult said, â€˜be-
cause thatâ€™s mandatory.â€™
â€˜Iâ€™ll handle them,â€™ I assured him, so thatâ€™s how Arnoult opened
the store. Well, it wasnâ€™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.
â€˜Mr. Canning, I will put them back up,â€™ I said, not wanting to
come off as disrespectful. â€˜But I want you to go look at them first.â€™
â€˜All right,â€™ Canning said. â€˜Iâ€™ll go look at them. But theyâ€™re going
â€śAnd this is where Providence comes in,â€ť Jorndt says today. â€śThe
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
â€śWell, they walk in the front door, Cork and Canning and Vern
Brunnerâ€”the best marketing guy this company has ever had. Weâ€™re
all waiting to hear what theyâ€™re going to sayâ€”and this is where Cork
was a visionary. He said, â€˜I think itâ€™s great.â€™ And youâ€™ve got to give
reinventing the corporation 181
Cork credit: He had cajones. He said, â€˜This is the reason why we
havenâ€™t been able to get our aisles clear. Weâ€™ve always had the aster-
isk that the Walgreens displays in the aisles are okay. I want this in
â€śThat tells you something about Cork Walgreen. He had steel.
Real steel. For a guy who wasnâ€™t in the store 24 hours a day, he really
got it! Itâ€™s just like every profession: There are people who get it, and
there are people who never get it. And Cork Walgreen got it!
â€śAnd remember, Fredâ€™s the brigadier general, Omar Bradley, and
President Roosevelt just said, â€śThis is it.â€ť And you know what Fred
said? â€˜Yes, sir!â€™ Youâ€™ve got to give him credit, too. Not many strong
leadersâ€”and Fred was a strong leader!â€”can do that.
â€śThat little event changed the way our stores look, markedly,â€ť
Jorndt concluded. â€śA lot of things happen that work out well [that]
you really donâ€™t think about ahead of time. You figure it out looking
back. But that one decision made our stores so much betterâ€”with a
cleaner, brighter, more organized lookâ€”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, â€˜These guys canâ€™t be good at pharmacy! Their stores are
dirty and messy!â€™â€ť31
Walgreens moved on to bigger refurbishing projects. Just a few years
after customer surveys concluded that Walgreens stores were â€śjunky, dis-
organized, hard to shop, with merchandise clogging the aislesâ€ťâ€”even
Cork confessed many of the old stores looked â€śbeat upâ€ťâ€”between 1975
and 1980, Walgreens remodeled 20 percent of the old stores. By 1979,
Walgreens had 688 storesâ€”the result of the companyâ€™s first major
expansion since the 1920sâ€”with 45 percent having opened in the
In the words of former Michigan football coach Bo Schembechler, a
friend of the Walgreens, â€śYou must remember that you are coaching atti-
182 americaâ€™s corner s tore
tude as much as skill. I work on a guyâ€™s attitude from the minute he gets
here. Encouragement. Criticism. Screaming. Winking. Kicking. Yelling.
Nodding. Ignoring. Itâ€™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 attitudeâ€”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 Walgreensâ€™ new leaders cleaned up the stores and removed all clutter
from the aisles, they turned their attention to cleaning up the companyâ€™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 corporationâ€”by being involved in too many things that werenâ€™t drug-
storesâ€”and spread too thin as a drugstore, tooâ€”by trying to be too many
things to too many customers.
The problem Cork and company faced was one of the corporationâ€™s own
doing. Like most successful U.S. businesses after World War II, Walgreens
loaded up on mergers and acquisitionsâ€”though not as voraciously as other
corporations, nor as nonsensibly.
In addition to purchasing Mexicoâ€™s Sanborns department store chain
in 1946 and Houstonâ€™s Globe chain in 1962, Walgreens opened three
restaurants: Corkyâ€™s in 1967; Robin Hoodâ€™s in 1968; and Wagâ€™s, a coffee
shop named for Walgreensâ€™ symbol on the New York Stock Exchange, in
1976. They were all retail, all service, but not drugstoresâ€”what Walgreens
Walgreens didnâ€™t stop there. It went on to forge a partnership with St.
Louisâ€™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-
derstoodâ€”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, â€śHow many people in LTV [then Ling-Temcon-
Vought] know the steel business?â€ť 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 hadnâ€™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
managementâ€™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 americaâ€™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