<<

. 32
( 39 .)



>>

How may I help you?™ That™s how he™s lived his life.”26
Jorndt is equally impressed by the people who work for Walgreens. “I al-
ways say, all people can be spread out on a bell-shaped curve, in every com-
pany, but I think our people are just a click or two to the right. The
goodwill that people have for this company is not unique, but it™s rare. So
many businesses don™t have the goodwill of the majority of their employ-
ees, and this company does. And I think it starts with the Walgreens fam-
ily, and this caring attitude that, ˜Hey, We all work for this company, so
let™s all work to make it better.™”27
Jorndt tells a story first printed in the company newsletter about two
pharmacy technicians in Indiana, named Silvia and Helen. Silvia worked
in the Merrillville, Indiana, Walgreens store, and Helen worked in the
Griffith store, about five minutes apart. They first met over the telephone,
having the kind of conversations Walgreens workers have, about transfer-
ring refills, about loaning inventory, whatever™s going on. Soon enough,
however, they became friends over the phone and eventually met each
other once a month for a cup of coffee.

They™re just workaday pals at Walgreens [Jorndt said]. But one day
Silvia calls for Helen, and she™s not there, she™s sick. Well, what™s
the matter? The person who answers the phone at Helen™s store
tells Silvia that Helen has to go on dialysis. Her kidneys have
failed. And her whole family is trying to get a kidney for her, but no
one™s a match.
You know what™s coming [he says, nodding to his listener]. But it
still gets me. Silvia goes home”she has a family of her own”and
her five-year-old son says, “Mom, you and Helen are so close, you™re
soul mates. I™ll bet you™re a match.” And the chances of just anyone
being a match is 1 in 5,000, I™ve learned. So Silvia goes in and
checks: She™s a match! Two weeks later, she™s donating a kidney to




TLFeBOOK
206 america™s corner s tore

her pal that she™s only known two years and only seen face-to-face
maybe ten times! Oh, man. It™s something. Now that™s a one-in-a-
million story”but it happened here!28

A big part of the culture that Walgreens workers pass on is not about
wearing a tie to work or flip-flops or working in an office, a cubicle, or a big
open space, but the basic, old-fashioned combination of discipline, struc-
ture, and ambition established by previous generations.
“I™ve noticed something in my time here,” Jorndt said. “People like
rules, and if they™re simple and attainable, they really like them. That™s
why Moses wrote up 10 rules, and not 25 rules, or 10 suggestions. They
work that way. I really believe that running a big company like this is just
like running a good, strong Walgreens store: You have to hire good people,
be square with them, and treat the customer right. That™s it. The same
rules apply.”29
Discipline has always been a pillar of Walgreens™ “corporate culture”
and its best eras”the unprecedented expansion of the 1920s, the intro-
duction of self-service in the 1950s, and the renaissance of the 1980s and
1990s. The company™s ambition”its goals”has been a pillar of the cul-
ture, too, according to Dan Jorndt.

We set high goals here, very high goals. The board even asks, “Do
you really want to set it that high?” We don™t have a lot of goals, just
a few major ones. We set them very high, and the people will be very
disappointed if we don™t reach them.
You™ve got to believe in it, too. The boss has to be more committed
than anyone else, because people can read you, better than you think.
If the boss believes in it and works harder than everyone else, then
everybody jumps on board. It doesn™t matter if you™re selling cameras
behind the counter at Walgreens, or insurance, or anything else. You™ve
got to believe in what you™re saying, where you™re going. If you™re
heart™s in it, people know that. And if you™re heart™s not in it, they™ll
know that too. Just like a dog can sense it if you™re afraid or not.30




TLFeBOOK
poised to pounce 207

Suffice it to say, Jorndt™s heart, head, and, not least, his guts were in it
during his 12 years running the company. Every Monday morning he™d send
out an intranet message “of how proud we should be to be working for
Walgreens, to be Americans, totally inspiring stuff,” legal director Bill
Shank recalled. So inspiring, in fact, that they™ve been compiled by the
company into a compendium called “Jorndt™s Jolts” and given to all the
stores. “One of my favorites was this Jorndt quote: Don™t be afraid to bite off
more than you can chew; you™ll be amazed how big your mouth can get.”31
“I guess I™m too conservative generally, but not when it comes to goals,”
Jorndt said. “I recall some audible gasps when I said we would have 3,000
stores open by the year 2000.”32 In fact, most people there thought he
was crazy.
They had good reason to gasp. When Jorndt said that in 1991,
Walgreens only had 1,646 stores; but on May 11, 2000, Walgreens opened
its 3,000th store. He had seemingly bitten off more than he could chew;
but as he predicted, his mouth proved bigger than people expected.



get ting the right people ready

Expanding the franchise by such exponential leaps could not be accom-
plished by simply buying or building more stores to hit Jorndt™s lofty goals.
Walgreens needed something deeper, something more substantial, to
avoid the disasters that other companies”Boston Chicken, MCI, and
Global Crossing, to name just a few”inflicted on themselves by expand-
ing too far too fast and without enough forethought.
What Walgreens needed, first and foremost, was a coherent, compre-
hensive strategy”a unifying theory, if you will”to guide all their efforts
and decisions along the way. And the North Star they settled on was sim-
ple and elegant, as all North Stars should be: Walgreens decided it would
become the nation™s most convenient drugstore.
In an era when thousands of Americans pay others to shop for them
and millions pay others to care for their children, time, more than money




TLFeBOOK
208 america™s corner s tore

or space, has become the most treasured commodity of the modern
American.
Jim Collins believes this simple epiphany was crucial in separating
Walgreens from the rest. In researching the incredible stock perfomance of
“such an anonymous”some might even say boring”company,” Collins
asked Cork Walgreen for the secret.

Finally, in exasperation, he said, “Look, it just wasn™t that compli-
cated! Once we understood the concept, we just moved straight
ahead.” What was the concept? Simply this: the best, most conven-
ient drugstores, with higher profit per customer visit. That™s it. That™s
the breakthrough strategy that Walgreens used to beat Intel,
GE, Coca-Cola, and Merck. In classic hedgehog style, Walgreens took
this simple concept and implemented it with fanatical consistency.33

Starting from the top, if you want to be the nation™s best, most conven-
ient drugstore, you first have to be a drugstore, which means you have to
be run by druggists. Jorndt and his advisors committed themselves to being
a first-class drugstore run by pharmacists, not bottom-line retailers or hired
guns from other, unrelated companies, just as Charles, Chuck, and Cork
had done before them. Jorndt said,

We decided to make all managers become nationally certified phar-
macy technicians to make sure our store managers were really com-
fortable with pharmacy. We just roped it on our store managers. At
the time, it was one of those things that very few people thought
could be done”very few”and now 80 percent are certified, and you
can™t become a store manager without the certification.
I was in Memphis in 1999, where the store manager is one of these
great old-school guys. He obviously had something on his mind, so
he asked to talk with me in the back of the store. The district man-
ager who was there with me apparently knew what it was about and
left us alone.




TLFeBOOK
poised to pounce 209

Once we got by ourselves, the store manager says, “I™ve taken that
[pharmacy board] exam three times, and I just can™t pass it. Will you
let me off the hook?” I thought for a moment, and said, “Well, what
would you do in my shoes?” He thought for a moment and said, “I
wouldn™t let me off the hook.” I said, “You™re right. But you haven™t
made up your mind to pass it. You™re not dumb. So if you apply your-
self, really apply yourself, you™ll pass.” Well, I just got a letter from
him about six months ago saying, “I just wanted you to know: I
passed the test.” You want to have people have high expectations”
for themselves and the company.34

More stores require more people, of course. To double the number
of stores in a decade, Jorndt™s team had to find thousands of new em-
ployees, without diluting the character of the company. To do so, Jorndt
stuck to Walgreens™ traditional philosophy of hiring as much as pos-
sible from the Walgreens extended family”aunts, brothers, daughters,
and the like”and promoting from within the company whenever
it could.
This was far easier to do at Walgreens than it would be at other compa-
nies. At Walgreens™ biannual managers™ meeting in 2001, almost 5,000
people gathered in Nashville. To open the meeting, Jorndt asked all those
who had a relative working at Walgreens to stand up. The result?

Well, eyeballing the crowd, I™d say 60 to 70 percent of our top people
have someone in their family working for the company. One guy™s
dad had 47 years of service. Another had 33. I just wrote a 30-year
congratulation letter to Paul Bonk in Iowa. His dad was a 55-year
Walgreens man. One of our brightest young men™s dad just retired
with 37 years at Walgreens.
I think that really says something good about Walgreens. When
your dad tells you, “You should work at Walgreens,” that™s a good
sign. Because if they didn™t really believe in the place, they wouldn™t
want their own children working in that company.35




TLFeBOOK
210 america™s corner s tore

“You™ll have to forgive me if I go on about Walgreens,” Jorndt said, tak-
ing a momentary pause, “but I really do mean it.”
Despite the preponderance of extended family members hired to work
for Walgreens, the company™s promoting practices don™t give any
dispensation for nepotism. Having a father or a sister working for
Walgreens might help you get in the door, but it won™t help you stay there
or move up”even if you™re the offspring of company legends.
Cork Walgreen™s six sons all worked for Walgreens, but only Kevin is
still with the company, working his way up to a vice president for store op-
erations, with no guarantee that he will one day lead the business.
(Demonstrating the family aversion to self-promotion, Kevin politely but
steadfastly declined to be interviewed for this book, not wanting special
treatment.)
A key to any good corporation, of course, especially one growing as fast
as Walgreens was in the 1990s, is the ability to identify, develop, and pro-
mote talent in the field. For that, Walgreens relies on its 15 store opera-
tions vice presidents. As Jorndt said,

They™re really the flag-bearers for our company. Their job is going
from store to store, teaching and listening and looking for talent, be-
cause talent can get lost out there when you™re so spread out. And
you never know when someone is going to pop up. So these people
serve as talent scouts.
The district manager might say, “Well, John™s pretty good” or
“Dan™s pretty good.” But when the vice presidents go in there with all
their years of experience and all the moxie they™ve got, they might
see a young guy with some talent and say, “I™d like you to move this
individual into an even bigger operation. Let™s see what he™s got. Let™s
challenge him.”
We have an expression called the Quantum Leap. We like to give
people quantum leaps, which work like this: You come in, a young
college graduate, a hard-charger. We give you a store after a year and
a half or so, and you™re just knocking the blocks off it. So we could




TLFeBOOK
poised to pounce 211

leave you there for three or four years, or we could say, “You know
what, after just one year, let™s jump this person up a few stores. Let™s
give ™em a $15 million store, and see what happens.” And you know
what? We™re right 70 to 90 percent of the time. So that does great
things for the company. We get that productivity, but more impor-
tantly, that individual says, “You know what, I™m killing myself, but
they™re noticing!”36

If this philosophy sounds familiar, you might recall how Charles Sr. as-
sembled his inaugural class of managers in the 1910s and how quickly they
moved up”seemingly before their time”yet they were able to do the job,
again and again. Once more, what worked way back then still works today.
The Quantum Leap theory not only ensures a fresh supply of young talent,
but it inspires everyone to get noticed.
Jorndt pointed out,

Sometimes other people see a young person moving up, and they say,
“Why did that person get promoted?” Well, here it is. Everybody gets
a report card. Look at the treatment of people and the work ethic.
Those are the two things we look at.
We probably had 30,000 people 15 to 20 years ago, and today we
have 150,000. And I think we™ve slipped maybe 10 percent in terms
of being connected to each other, and I think [we™ve] slipped only
that much because we™ve really worked on it. We™re still about 90
percent of what we were, in terms of the family feeling of closeness,
when we were just one-fifth the size we are now.37



a good corner is a good corner

After devising effective systems to expand the number of good employees,

<<

. 32
( 39 .)



>>