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Most people in this country spent last Christmas Eve away from work, celebrating the holiday with family members and friends. Alex Gourlay, then Walgreens’ president of customer experience and daily living, devoted much of the day to visiting a dozen of the drug chain’s outlets in greater Chicago.
Alex Gourlay
His goal was to connect with store-level employees and express the solidarity of Walgreens’ management with people in the field on the busiest day of the year. During the course of his 10-hour journey, Gourlay confirmed something else — changes designed to hone the company’s operations were producing tangible benefits in the stores, for both employees and customers.
“It was just jolly when a store manager said to me, ‘This has been the easiest Christmas season on record,’ ” says Gourlay, who became Walgreens’ top executive at the beginning of the year, following the company’s merger with Alliance Boots. “That was possible because, first, we got the base supply chain right, so we got the basic items on the shelf for the customer when she wanted them.
“Second, we cut our seasonal buy by almost 40%, which meant there was no overhang. Even though the change obviously affected sales, it didn’t affect profitability, and it cleared the shelves for new things to come in for future years. The people in the stores immediately saw the logic of having fewer but more valuable items on the shelves. The third thing, which the store manager especially liked, was that by having all of this workload removed at that time of year members of his team were able to spend more time with shoppers and really look after them. As a result, we had the highest customer satisfaction score since we started measuring them. We won this Christmas; that success came from doing things differently.”
Walgreens’ experience during the holiday selling season is a microcosm of what Gourlay and his colleagues intend to do throughout the organization. Significant steps are being taken to knock down silos within the company, adopt a holistic view of the customer and redeploy resources accordingly.
“The process is not just about cost, it’s about genuine capability, being patient- and customer-centric, and joining up the organization as one team end to end,” Gourlay says. “We use the words: better for customers, simpler for team members, and faster and more agile for Walgreens. It is a nice set of words, but we mean it, and behind these words is hard work to restructure the business. When we’re finished we want to make certain we can speed up the decision making and empower people in the right part of the process to execute our plan effectively. But, most importantly, we want to free the store teams to spend more time with our customers.”
The ongoing transformation comes at a crucial moment in Walgreens’ 114-year history. The drug chain is not only faced with the challenges associated with its integration into Walgreens Boots Alliance, but the urgent task of regaining its accustomed position as the nation’s No. 1 dispenser of prescription medications, a distinction it recently ceded to CVS Health. Gourlay is certain that Walgreens’ traditional strengths, coupled with the measures management is now implementing, will put the company back on top.
“Our belief is that, going forward, the customer and the patient will have more control of their health and will be expected to take on more of the health care cost burdens here in the U.S. but also internationally,” he says. “They deserve the choice of how and when they spend their money. “We believe strongly in providing an integrated retail model — with pharmacy, health, wellness, beauty care and convenience — that will make Walgreens attractive to people concerned about their well-being. Our job is to accelerate that strategy.”
The prerequisite for achieving that objective, he asserts, is unlocking the full potential of Walgreens’ personnel.
“The No. 1 thing that we need to fix is confidence,” says Gourlay. “We have definitely got the right people. We have definitely got the right assets. That shows the previous management team did a great job in building out this amazing infrastructure.
“We’ve definitely got, in my view, the best brand. The reason why I say best brand is that, as a culture, Walgreens has always been obsessed by customers, obsessed by community, and acted on deeply held family values. That is different to other drug stores in this country. In the end that’s why we will be as successful in the future as we have been in the past. We just have to find confidence first of all.”
Early indications are that Gourlay and the team he is building have what it takes to get the job done.
