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 / Autumn 2013 / Issue 72(originally published by Booz & Company)


Changing Structures and Behaviors at Walgreens

Some of these ideas were developed during the pilot phase, when we were figuring out how best to establish new leadership and performance behaviors. But they worked so well in the pilot that we rolled them out to the entire company. And now that we’ve built up these networks, they’re an asset that we can use in the future, to drive other changes we want to make.

The Roster of Results

This initiative has required a lot of work. There’s a huge change-management effort to make sure the initiatives are sustainable, and we’ve spent about US$30 million on training alone, with more to come. However, a year into the implementation phase, the results are promising. In our pilot program, we went from the bottom 25 percent to the 95th percentile in our engagement survey results.

The Gallup Organization, which measured the results for us, actually thought the numbers were wrong because they’d never seen such a big improvement in one year. We’ll have the next results after the full rollout in 2013. Our service levels are at an all-time high. We think next year will be even better—everyone now understands the larger strategy, we have targets in place, and company bonuses will be awarded against those targets.

Financially, the first year under this project was one of our best in the past decade. We also have a lot of anecdotes that show that the re-design is moving us in the right direction. Many of them have to do with seemingly small things we ignored in the past. For example, we used to expect our store clerks to be efficient. Now we encourage them to cultivate the kind of friendliness that will attract customers.

In one of our stores in Texas, a register clerk named Francelle is known for her friendliness and presence. She knows many customers by name. Francelle took some time off for a few weeks and, boy, did our customers notice. They asked about her daily. “Where’s Francelle? Is everything OK?” That kind of connection with customers, which you might expect from a neighborhood shop, was rare for us in the past. We didn’t think it was important. Now we think it’s the kind of connection that will determine our future. 

Author Profiles:

  1. Mark Wagner is the president of operations and community management at Walgreens.
  2. Wayne Orvis is the vice president of customer and employee initiatives at Walgreens.
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