We kick off a month of showcasing remarkable female leaders from some of retail's leading brands, with special guest, Tracey Brown, Executive Vice President and President, Walgreens Retail & U.S. Chief Customer Officer. Tracey's diverse background in advertising, non-profit leadership, and previous stint at the other "Wal" (Walmart) prepared her well for her current assignment at one of the world's largest and most successful drugstore chains.
We kick off a month of showcasing remarkable female leaders from some of retail's leading brands, with special guest, Tracey Brown, Walgreens Boots Alliance's Executive Vice President and President, Walgreens Retail & U.S Chief Customer Officer. Tracey's diverse background in advertising, non-profit leadership, and previous stint at the other "Wal" (Walmart) prepared her well for her current assignment at one of the world's largest and most successful drugstore chains.
We review the tremendous evolution of the company from its founding in 1901 to becoming a leader in health and wellness. We unpack what it means to be a Chief Customer, the challenge of breaking down silos to put the customer at the center of all you do, and the critical role of agility to maintain your competitive edge. We close with some of Tracey's top leadership tips on how to mobilize people to do go above and beyond for the customer.
But we kick things off with a quick review of the week in retail news, including the NRF's annual sales forecast, Lululemon's strong earnings report, and Macys CEO Jeff Gennette's plan to hand the keys of the kingdom to Bloomingdale's CEO Tony Springs early next year, Then we discuss Alibaba's decision to split into six groups, more news out of Amazon, Bed, Bath & Beyond's hail mary financing strategy, and more new formats from Nike.
About Tracey
Tracey Brown is executive vice president, president of Walgreens retail and U.S. chief customer officer, overseeing the transformation of Walgreens to a healthcare company, to create more joyful lives through better health.
She is responsible for the Walgreens consumer experience across all consumer touchpoints and leads development of strategies to advance Walgreens across a complex and dynamic competitive landscape. Brown oversees store operations, merchandising, marketing, product, digital, omnichannel, store format, data and analytics, and supply chain organizations, as Walgreens further accelerates its digital transformation, in order to create a seamless integration across all channels – in-store, mobile and online – to provide a unified, consistent brand experience.
Brown has more than 30 years of experience driving business growth, operations, creating omnichannel customer experiences and leveraging digital capabilities to connect consumers and brands. Most recently, she served as chief executive officer for the American Diabetes Association (ADA), where she led the organizational transformation including fundraising, advocacy, science and research while fighting for people living with diabetes.
Prior to the ADA, Brown was senior vice president, operations and chief experience officer for Sam’s Club, a division of Walmart Inc. She also served as CEO and managing director of RAPP Dallas, a data-drive integrated marketing agency, chief operating officer for direct marketing agency Direct Impact and director of worldwide consumer marketing for Advanced Micro Devices. Earlier in her career, she held leadership positions at American Express, Proctor & Gamble and Exxon Mobil.
Brown graduated from University of Delaware with her B.S. in chemical engineering and received her MBA from Columbia Business School in New York.
She currently serves on the Board of Directors for Weight Watchers and Yeti. In 2021, she was named one of Savoy Magazine’s Most Influential Black Corporate Directors, and in 2022, she was listed on Forbes CEO Next List.
About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global eCommerce Leaders podcast, and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:06
Welcome to the Remarkable Retail podcast, Season 6, Episode 12, presented by Market Dial. I'm Michael Leblanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:13
We're both back home from Shop Talk in Vegas. So, listeners be sure and check out our snack size recap bonus episode now available and for this episode, our very special guest is Tracey Brown, President and Chief Customer Officer of Walgreens.
Steve Dennis 00:27
Yeah, it's great to, for me anyway, to reconnect with Tracey. She used to live in Dallas, and we used to see each other way back when but have not talked to her in a while and it's a great conversation and a really interesting story about what Walgreens, the well I guess we should call it the Walgreens Boots Alliance is their I think full name, what they are up to.
Michael LeBlanc 00:48
Let's get right into the news. So, the NRF comes out with their sales forecast. So, they had put some numbers down and did a bit of a session actually, while we were in Vegas, what do you, what do you make of their numbers, they say what is it, growth between 4 and 6% in 2023?
Steve Dennis 01:03
Yeah, well, we're always trying to read the tea leaves here and of course, it's nice to lean on an organization that spends a lot of time looking at these things and, yeah, it's interesting, 4 to 6% growth is projected, if you think about where inflation is looking like it's headed to, that looks pretty much in line with the range of inflation. So that's just a pretty flat transaction value. They also said that they expect growth in, essentially, e-commerce to be up 10 to 12%, which is a bit closer to the longer-term trend. What I thought was interesting was they also talked about how this number compares to numbers in the past.
Steve Dennis 01:46
So, last year, it was about 7% annual growth and historically, pre-pandemic, the average annual sales growth rate was 3.6%. So, if you think about the inflationary impact of the last couple of years, again, it's not really, real growth in a manner of looking at it. So, I think that's kind of interesting. The other thing they talked about as part of the overall release, which we can probably put a link to in the show notes, as they are anticipating that job growth is going to start to decelerate and because of just generally slower economic activity, restrictive credit conditions, a bunch of things we've talked about before and they're predicting that the unemployment rate in the US, which is at, is at an all-time low, is likely to exceed 4%. Before the end of the year. So just a little bit of a quick macro picture there.
Michael LeBlanc 02:40
It's interesting because on the, on the upside, so to speak, fueling growth is, what did they say, like a trillion dollars of estimated savings still from, I guess, an overhang from, from the COVID era. So you know, there is still some growth left in the engine, but flat I think is the new up, is our, if I would summarize what I saw from the NRF forecast and listen, there's a lot of companies who historically have a lot of jobs to fill and can't get everything done. I talked to retailers all the time and said we, our projects are moving slower than we like because we can't find the people. So maybe this, this clearing of the market, as you economists might say, could be, could be helpful. Let's talk about Canadian based Lululemon, they've put out some earnings, told some stories and what did you think of what they had to say?
Steve Dennis 03:25
Well, I started as I was prepping for this. I started to make a list of several of the companies that reported earnings in the past week, and I thought rather than just go through and give general commentary about them. We're talking about Lululemon in particular, because their, their performance continues to be really impressive. 30% year over year sales growth. Now some of that is comp, some of that is they continue to open stores and lean into digital and things like that, but it's just really impressive and I think there's two lessons there. One is this, this very clearly a Remarkable Retail. I mean, the things they do in terms of amplifying the wow and their execution from an omni-channel or harmonized basis is excellent. The other thing that they did in their earnings announcement, or as part of the earnings announcement, was talking about a pretty significant write down in their investment in Mirror, the Mirror acquisition. They made, I guess, the [inaudible] 18 months ago.
Michael LeBlanc 04:22
What'd they pay like 4 or 500 million for that all in because they were already, before they, before they bought it they had a stake in it. So, it wasn't a, you know, yeah, they had a toe in the water before they bought it.
Steve Dennis 04:32
But it was it was a pretty significant deal and it's very clear that it has not worked out to the degree that they hoped but to me it's both and underscoring of the willingness to experiment but also the willingness to say hey, you know this is not really working the way we want it to and to, not they're not moving on completely from it but, but to, to move on. So I think they're, they're just a company to really lift up as a very strong I'm optimistic story but also, I think a retailer that, that other retailers can really learn from by digging into their story.
Michael LeBlanc 05:06
Some executive changes. If the department store Macy's, Jeff Gennette is set to retire, a good run, what is it like 30 years in, in the business, and they've announced a new leader already. So what do you think of the prospects for growth or the prospects for the new CEO?
Steve Dennis 05:25
Well, you know, Jeff, Jeff say, yes, as you said, he's, he's a lifer, pretty much, there at, at Macy's, he's been at the helm for a number of years, really kind of a mixed legacy there. As we've talked about multiple times on the podcast, Macy's is to be applauded, in a lot of respects for trying lots of new things. Unfortunately, most of them have not really worked particularly well. I mean, Jeff's in his 60s, so it's not a you know, I don't think this is a-
Michael LeBlanc 05:51
Shock to anybody.
Steve Dennis 05:51
Yeah, yeah. Right. So, and the guy that's replacing him, Tony springs currently runs Bloomingdale's. So, it'll be interesting to see with a more upscale high service level background, I guess you could say from, from Bloomingdale's. what that might mean, for Macy's. Tony's not taking over until February of next year. So this is not an imminent change. But yeah, some, some changes at a company that, frankly, I think needs, needs to inject some, some different perspectives.
Michael LeBlanc 06:22
Let's talk about Alibaba. So, we haven't spoken about Alibaba in a long time, actually, probably since, probably since 11:11, but they're splitting into six groups and trying to unlock some value. What do you, what do you make of all that?
Steve Dennis 06:34
Well, this is, I think it's pretty interesting Alibaba, as I'm sure most people will know, one of the biggest retailers in the world, kind of the Amazon of China, though, that's probably not the most fair comparison, but yeah, they've, they've gotten into a number of different things. So, they have their core and by far biggest e-commerce business, they also have cloud computing as much like Amazon does with AWS, and a bunch of other divisions and, you know, the same argument can be made for Amazon is, you've got to have extremely valuable cloud service business trapped inside a bigger conglomerate of wildly different profit and ROI outcomes and so they are trying to unlock some value by spinning these things out into separate pieces. So, I think it's pretty interesting. Investors liked the news. I was listening actually do Kara Swisher and Scott Galloway on the pivot podcast talk about how this is this is actually a move that, maybe, CEOs don't like because they like having all these different divisions and kind of the counter cyclical-, cyclicality and the inability to, for outsiders to really understand exactly what is going.
Michael LeBlanc 07:42
Opacity and cyclicality we're making-, big words. We're words today.
Steve Dennis 07:45
Exactly this is like, I'm ready for my SATs now but yeah, I think you, you can potentially unlock a lot of value for investors by, by separating out the pieces and so we'll see how that all goes but it looks like initially, investors really like it, we'll see when they actually float these different IPOs how they all turn out but I do wonder whether this is a little bit of a blueprint for where Amazon is headed, which I think might be the next thing we talk about.
Michael LeBlanc 08:12
Well, I was just gonna say from the Amazon of China to Amazon, they, they announced a few more layoffs and they've also started putting out other kinds of news items. What, what did you read in the paper about Amazon?
Steve Dennis 08:23
Well, this happened, actually, I guess, a couple of weeks ago that Amazon announced their second round of layoffs this year, which I think is their third round of layoffs in about six months. So, they clearly continue to be very focused on improving profitability. You know, in this particular case, trying to lower costs. The other thing is, we've talked about returns, and the need to rehab returns reduction. We've got an episode coming up on that in about a month, but they are going to start warning online customers about products that are frequently returned. I think this is a pretty interesting strategy. You know there's lots of different ways to try to attack the returns problem.
Michael LeBlanc 09:01
Do you mean return, they're going to warn customers who return often or that this item is often returned?
Steve Dennis 09:06
The ladder, yeah, highlighting products. He was sort of saying, I mean, I think in essence, either you may not want to buy this?
Michael LeBlanc 09:14
Shouldn't you,
Steve Dennis 09:15
You might not be happy.
Michael LeBlanc 09:15
Just delist the item.
Steve Dennis 09:16
Well, that's one of the things that's,
Michael LeBlanc 09:18
I don't understand.
Steve Dennis 09:19
Occurred to me, but I think in the case of apparel anyway, I mean, not true of other items, it may be a bit of a warning that you know, the fit of this might be not what you're expecting, and so perhaps be a little bit more careful, but it's an interesting, you know, it sounds very much like an experiment.
Michael LeBlanc 09:36
Yeah.
Steve Dennis 09:37
But it's the first time we've seen this kind of thing, about like, you know, be careful what you wish for.
Michael LeBlanc 09:41
It's like de-influencing. They've become a de-influencer.
Steve Dennis 09:46
I learned that term on our last episode, and now we're saying it, so it's, it's just and I think, well, because of the heightened awareness that the returns issue is getting, I think we're gonna see a number of experiments and this is just a new one from a company that is, is, obviously has a lot of influence, but also clearly is trying to work on some of the things that are contributing to their less than stellar profitability and retail.
Michael LeBlanc 10:10
Well, speaking of less than stellar Bed Bath and Beyond, basically threatening if you don't buy my shares, I'm going to close the business. It's like we came up with these financial shenanigans, and if you don't buy it, you're, you're gonna miss us. Is that, am I reading that right?
Steve Dennis 10:27
Well, it's, desperate people do desperate things, I guess. Yeah. Yeah. It continues. I mean, it's, it's, you know, sometimes I lean into the schadenfreude here, just another, if you're studying for SATs kids. That's another word to go, go learn. Yeah, they, without getting into the weeds too much on this, they've avoided bankruptcy through a pretty creative financing plan in the hopes of raising about a billion dollars. That is not going according to plan. So now, they're pretty much saying we're going to float, a new equity offering. I think they're trying to raise about $300 million. And yeah, they were very explicit about essentially, if this doesn't work, we're going to file for bankruptcy.
Michael LeBlanc 11:09
We're out of ideas. Yeah, we're out of idea.
Steve Dennis 11:11
We're out of ideas, yeah. Oh, and by the way, on that news, the stock, which was already that we talked about a week or two ago, how the stock had gone below $1. Their overall market cap now is under $100 million, which is pretty crazy. When you think about how big a company they were and how valuable a company they were just a few years ago, as part of this announcement, they also said that they are and they're reporting, I think, in a few weeks, their actual official quarterly earnings, but they said, preliminarily, we're going to be reporting quarterly sales that will be down 40 to 50% and that is on a year ago basis, which was already not a great number. So, the business is kind of in freefall, so I think that this is perhaps going to come to a head here pretty, pretty quickly with a bankruptcy filing, but we'll, we'll see. It is a bit of a Hail Mary.
Michael LeBlanc 12:03
Well, from a massively struggling retailer to a massively successful manufacturer, wholesaler and retailer, let's talk about Nike. They're talking about brand focused stores and they're doing all kinds of neat things, share with the people what your impressions are.
Steve Dennis 12:17
Well, we keep coming back to Nike, I think is, you know, like Lululemon, a very remarkable retailer. They've, they've struggled, struggle is probably too strong a word but they've, they've hit a few rough patches, particularly because of how reliant they are on China and China has obviously been a difficult market to be particularly successful in for the last three years and they've also, though, actually as a great comparison to Lululemon, struggled with high levels of inventory, Lululemon has made some good progress on that without having to take a lot of markdowns. Nikes had to take some to get repositioned for the future.
Steve Dennis 12:52
But the particular thing that was in the news this week, is the opening of their Jordan, Michael Jordan, Jordan branded stores as part of their accelerated direct to consumer strategy. So not only are they opening these Jordan focused stores, they've got a bunch of other concepts, Nike Rise, Nike Live, House of Innovation, that they are opening, in addition to really dialing up their, their e-commerce perspective.
Steve Dennis 13:19
So, this, Nike, to me, is a great example of a company that is getting a good balance or moving to a better balance, perhaps of wholesale and direct-to-consumer, while also developing a portfolio of go to market strategies, as opposed to kind of a one size fits all concept, which I think is caused, you know, it's one of the things that's causing struggles for the department stores, they basically kind of kept the little bit of everything for everybody kind of go to market strategy as opposed to a bit more segmented or, or it's not, I wouldn't say micro targeted because they're not tiny, but more specific offerings for different types of customers with a different customer experience in different product and service offering.
Michael LeBlanc 14:01
Well, all right, well, that's a good wrap on the news and now just before we get to our very special guests, Tracey Brown President and Chief Customer Officer for Walgreens, let's hear from our presenting sponsor.
Michael LeBlanc 14:12
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Steve Dennis 15:00
Well, I'm very excited to welcome Tracey Brown to the podcast. It has been like a, we were trying to figure this out, like 14 years since we've spoken directly, or seen each other in person. So why not reunite in public on the Remarkable Retail podcast, but welcome, Tracey, how are you today?
Tracey Brown 15:18
Steve, I'm so excited to be here and yes, it's been quite a while, but you know, I stay follow, following you, Steve and stay connected. So, I'm excited to be here and be back connected.
Steve Dennis 15:30
Well, it sounds like we've been spying on each other over the years. So, we'll try not to make that too creepy, but what we'd love to do just to get things rolling is ask our guests just maybe give us a little bit about their personal and career journey because aside from the things you were doing years ago, when I spent some time with you here in Dallas, a few things have evolved in that time. So, tell us a little bit more about you, who Tracey Brown is.
Tracey Brown 15:53
Let's, I like to start from the inside and then go out Steve. Listen, I, you know, I am someone who is probably a little bit type A. But I have a both a left brain and right brain thing going. I'm an engineer, a chemical engineer, but also have a creative streak and a creative side. I ran an advertising agency called RAPP in Dallas, did that for a bit. I also have a creative outlet. I'm a drummer. I've been drumming since elementary school. I started if you go on any of the social media platforms, you'll probably see my daughter and I kind of rocking out.
Tracey Brown 16:39
I have a beautiful 19-year-old daughter now who just started her freshman year at Howard University in Washington, DC, super proud of her, super psyched for her. She's into performing arts. So, she's a dancer. And then I have my wonderful husband. My husband and I have been together for 37 years. He is definitely the Ying to my Yang, but that kind of forms my kind of close family unit and quite frankly, I think that all of the goodness that I've been able to establish and enjoy over the last several years has come from the grounding that I have with my family.
Tracey Brown 17:30
I then step out a little bit and talk about, you know, work and from a work perspective, I've done a bunch. As I mentioned, I started as a chemical engineer right on the lab benches of Procter and Gamble. Through that journey I ended up discovering that I had a love for, like, brand management, product management. So, I went back and got my MBA and from that having that kind of combination between chemical engineer, MBA allowed me to experience a lot of different industries, from oil and gas to financial services to high tech, to, you know, I've done startups in very large companies. Now, along that journey, Steve, I fell in love with retail, and had a lot of retail clients when I was at RAPP, and then actually went client side and worked for Walmart, moved my family to Bentonville, Arkansas, that was great, great time and while at Walmart really started to step out and really become a very deep advocate for people living with diabetes.
Tracey Brown 18:47
I have been living with type two diabetes for 19 years now and really began to develop a deep passion and feeling like this was a part of my purpose, to really bend towards trying to improve the health and well-being of people. It started with diabetes because I live with diabetes and that's what Pat, you know, catapulted me into the Health and Wellness space, I actually ended up leaving Walmart to go work and be the CEO of the American Diabetes Association and my burning desire around transforming healthcare only got stronger and when I really started to understand the complexity of the healthcare ecosystem, I became even more convinced that the place that you could develop and really transform the health and wellness of people in this country really had to be leveraging a retail footprint that was already in a community and that is what actually led me to my current job here at Walgreens.
Steve Dennis 20:00
Well, that's, it's so nice to see people's passions and interests really line up with, with their career. By the way, since you've got the drumming background, if during the podcast I'm rushing or dragging, you'll let me know I'm sure but that's our only like inside drumming, drumming reference we will ever, maybe will edit that out in the final cut but in any event.
Michael LeBlanc 20:20
I don't know before but, and on that same theme I have a question. I'm going to jump in with Tracey. Buddy Rich, Neil Peart or Tommy Lee?
Michael LeBlanc 20:29
Buddy Rich.
Michael LeBlanc 20:30
Buddy Rich All right, there we have it.
Steve Dennis 20:31
I'm gonna put a good word in for John Bonham, but anyway, let's get back on task here. So, I imagine lots of people listening know about Walgreens or boots, the Walgreens boots Alliance. Can you explain a little bit more though, about, about the company, how it's come together, just to kind of give everybody, kind of get them level set on what we're going to talk about as we go a bit deeper?
Tracey Brown 20:53
Yeah. So, you know, Walgreens, Steve, has a very rich history. We were, you know, founded back in 1901, so over 120 years old, and we were founded by a pharmacist, Charles Walgreen, and his desire and his passion, you know, all the way back to 1901 was really around helping improve the health and wellness of people. Through Charles's desire to reach as many people as possible he actually was quite innovative in terms of developing a front-end, as we call it, front-end part of the retail store, where you could go get your prescriptions, and do a little shopping in the front of the store. He was also innovative in the early days, Charles Walgreens did things like creating malts, we had a food counter, and restaurants, all of these things. In my reflection, we're really just traffic drivers and things to bring people into the pharmacy, again, to help improve the overall health and well-being.
Tracey Brown 22:13
Now, over the course of the years, Walgreens have seen a lot of things, as I mentioned, involved in many things, restaurants, product development, food, innovation, these kinds of things but around 1975, Cork Walgreen, who was the last Walgreen to actually run the company, really got narrowly focused in in really methodically focused on being the best and most convenient drugstore and that was the thing that Cork established that we would be best in world at and so he built his whole value proposition. The whole point of differentiation was about convenience, about providing a great frictionless experience in store and being that trusted health and wellness pharmacy provider from 19, about 2000 or so you've seen us kind of do some inner iterations where we merged with boots and created WBA, up until where we are today, Steve, with our current CEO, who is awesome, Rosalyn Brewer, she is actually kind of taking us back to our roots, where we are now pivoting to be the most convenient and trusted health and wellness destination across the entire health continuum, Steve. So, from preventative wellness to acute to chronic disease state management to post-acute. That's who Walgreens is today. That's the pivot, the hard pivot that we're making because our purpose is really to bring more joyful lives through better health to every American here in this country.
Steve Dennis 24:23
Well, that's fantastic. It really resonates with me when I lived, we talked off, off mic that I used to live not too far from the Northbrook, Illinois campus of Walgreens and during the time I was in Chicago, I think there were about three Walgreens that opened ever closer to where we lived at that time and my ex-wife and I would well my now ex-wife and I would joke that it's just a matter of time before you guys build a Walgreens in our backyard because it was becoming so, so convenient, but in any event, so tell us about your specific role. Now I know part of your title is Chief Customer Officer, there's lots of titles that seem to be thrown around and created and you know, what exactly is it that you, you do and what's your focus?
Tracey Brown 25:10
Yeah. So, I have, you know, to your point about lots of titles like Executive Vice President and President of Walgreens Retail and US, Chief Customer Officer, what does all that really mean, simply put, if you think about health, and well-being Steve, it's very personal, right. When you think about the importance of where health is in this country, and I think COVID-19 made us ever more aware of the importance of our health, but it starts at a very personal level, which means that you have to really understand the customer, the patient, the consumer, whichever word that you want to use, at their core and you have to figure out, how are you actually going to establish an emotional connection and how are you going to establish trust. Because if you really want to change, health and wellbeing, for a person, there first has to be trust, and then has to be an emotional connection because managing your health and well-being is really about behavior change. Steve.
Tracey Brown 26:35
So, Chief Customer Officer was really at the heart of when Roz thinks about pivoting to healthcare, is that we have to be steeped in data, insights, knowledge around who the customer, the patient is, that walks through our doors that are in communities all around the country, so that we can figure out how to connect with them, and how to create value. It's about value creation and so the job was framed first, so that across the entire company, whether you're talking about pharmacy, merchandising, supply chain, R&D, Walgreens health, the front part of our store, the customer resonates across all of those pieces, because as you know, the customer doesn't view us as teams or departments. It's one customer in one Walgreens. So, I really have all of the forward-facing parts of our business, that touch the customer, or actually, you know, merchandising supply chain as an example, where the product has to land up in store to touch the customer. The idea was to bring all of that under one umbrella to make sure that we're busting down silos and we are seen as one Walgreens to the customer.
Steve Dennis 26:35
Right, yeah.
Steve Dennis 28:15
So, I want to bring Michael in, but maybe just one quick question kind of related to this from all your experience, not just your experience at Walgreens, but you know, there's been so much discussion over the years of the need to be customer centric, like that doesn't seem to be a pretty controversial point of view to take, but it doesn't seem like many companies have actually brought that to life, including an organizational structure like the one you describe, you describe. Any, any thoughts on that and why it's a challenge for companies to do that?
Tracey Brown 28:46
I think it's hard. So, I think a couple of things, Steve, way back in the way back, like I've, I've been in this customer centric place since the early 90s, where I worked with Don peppers and Martha Rodgers well, before one to one, marketing was popular and customer centricity was popular. We were on the cutting edge there. I think it started initially very hard for people because they didn't have data, right, but then with the proliferation of the internet, and tools and technology and databases, and AI and all these things.
Tracey Brown 29:26
Now people have data, but I think structurally, the way companies are set up is typically by departments and so you have a silo effect happening, where what you do in one department may actually not be great in terms of providing an experience for the customer say in store and so you have this kind of tension around meeting department it or divisional needs, and not actually thinking holistically about the customer and if you just, just think about normal businesses, you are incentivized usually, by your department or hitting your team goals.
Steve Dennis 30:18
Right.
Tracey Brown 30:18
I think Cust, organizations that are seeing, look what customer centricity really means, like that has to be at the top and so how do you structurally make that happen, how do you make sure that the data and insights actually flow, and then how do you incentivize the kind of, as I say, pulling this the thread through the sweater, across all of these silos, so that you're incentivized to always stay focused on the customer and do what's right for the customer, it's hard.
Michael LeBlanc 30:53
You know, as I'm reflecting on what you're saying, Tracey, I want to talk about culture in the organization, you know, to say the least, retail pharmacy business has gone through tremendous challenges or constraints of supply chain, I didn't have, you know, baby formula shortage on my bingo card. How was an organization you know, through the pandemic and now, how is the organization kind of facilitate that culture of, I don't know, what would you describe it as agility, and have you become a more agile business, you talked about hard pivots behind the current purpose, how do you get the organization all moving in, in the same direction?
Tracey Brown 31:28
I actually think, Michael, for us COVID, actually, as horrible as COVID has been, in terms of the humanity of it all. It forced organizations, and particularly an organization like Walgreens, where we actually, our whole, everything came focused on keeping Americans healthy, and alive through COVID. That you quickly, all those silos in that kind of crisis, quickly break down and you quickly figure out how to focus on that one thing that matters and believe it or not, a company of our size, $130 billion company with hundreds of hundreds of thousands of employees, when you're myopically focused on, we've got to get shots in arms, we've got to get people healthy, you start to do things that you never thought that you could do, you start to move at a pace. I mean, the level of bureaucracy that exists in most large companies is the same level of bureaucracy that existed here.
Tracey Brown 32:51
However, COVID taught us that you can break that stuff down, fast, when you have to and that's what happened. And I think, Michael, we have continued to take kind of that COVID experience, and the muscle, and the courage that we had to do things differently and break things that maybe had been kind of institutionalized around here, for the betterment of the customer. We kept on to that, so we were able to pivot again, things like the baby formula, shortest things like the cough cold [inaudible], there was a shortage because of how we learn how to move with speed and stay agile. We bought ahead; we knew that this cough cold [inaudible] thing was going to become a thing we bought ahead quickly. So, it taught us something, Michael, right. It taught us that we can move fast, even as a large organization. It taught us how to be a team and break down silos and it taught us how to myopically focus on what matters and that actually helped us with our customer centricity as well.
Michael LeBlanc 34:08
It's so interesting, because I've talked to many CEOs who are, are worried that that kind of agility, that kind of fast decision making that kind of breaking through your bureaucracy is kind of an lost, fortunately, with the end, largely of the COVID era, but without that galvanizing mission, their task, and it sounds like yours, as well as to keep the organization focused on similar cultural attributes, right, without the overarching risk of a global pandemic. So that's, that's super interesting.
Michael LeBlanc 34:35
I want to dive into just maybe a tactical element of the business. I was doing some store tours in New York City and we're finding I'm looking at a lot of products. I want to talk about loss prevention for a few minutes. Lots of product being locked up lots of security staff, we seem to see not just OTC products, but even you know, detergents kind of locked up is it seems like that's on the rise and one if you have any thoughts around the cause of that, and what, what you as an organization are trying to do to, to adjust to the current situation and if you just think it's a temporary blip or do you think there's something, something else going on with your stores?
Tracey Brown 35:11
Yeah, you know, Michael, this is, this is one of those pain points. I'm going to try not to get on my soapbox on this one, but I think you're absolutely the environment has changed, full stop. And you have to ask yourself, why has the environment and dynamics changed because there is shrink or theft everywhere. This is kind of on the rise. And I've been trying to think about what has actually happened. Has something happened to, like, just the physical environment, has something happened to the cultural environment has something happened, right. So, here's what we do know, I do think, the rise of the Internet and the ability to buy and sell and you know how easy it is to do that now online, I actually do think that has contributed
Michael LeBlanc 36:15
Certainly, an enabler, right, the marketplaces are big enablers and there's some work going through Congress to try to get at that problem, right.
Tracey Brown 36:18
And we're on the frontlines there as well. I think this is something that is going to require everyone's help to get around. So, the, the organized crime rings, like we are on the front lines, working with the government, federal, state, local officials, to try and actually even working with fellow retailers, because it's not just a Walgreens, to everybody's problem working together there.
Tracey Brown 36:51
Then you actually look at, you know, I started thinking about, particularly post COVID, what COVID did, there were so many people who lost their jobs, Michael, that you think about where people are in terms of, you know, Maslow's hierarchy of needs, and just being able to live and survive, and you ask yourself, has that added to all of this? You think about populations, I've been reading more and more about the number of people who have found themselves homeless with no place to live. I mean, there's just a number of dynamics here and the law has changed, you know, over the course of several years, you may know this, the laws have gotten lenient, in terms of actually locking up people for theft, like stealing, you know, things from stores. Like, you don't get locked up anymore. Now, and do we have the answer, I don't know, but now we have all of these things that are kind of unlocked and open.
Michael LeBlanc 38:16
Yeah. Yeah, it is. It is really the triangulation of, you know, moral RC, human trafficking, the platforms and the long-term implications of changes of police and the justice system and we probably have a whole separate podcast. I'm passionate about this subject, but let me pass the mic over to, back to Steve, and bring us home.
Steve Dennis 38:37
Tracey, I'm curious, particularly because of the diverse career that you've had. How, you know, just thinking big picture, how has that informed your leadership style and some of your leadership principles, are there particular things you might, might call out that you think, you know, whether folks work in a similar industry or to the kind of level you do that, that really has made a difference?
Tracey Brown 39:01
Yeah, I mean, I think, what I kind of what I knew at an early age, Steve was leadership matters, right, I studied as a young person. Before I even got into a career and out of college, I studied some of the most successful businesses to really understand if there were any commonalities to the businesses that seem to be long term sustainably, growing over long periods of time, even as the world changed, then the environment changed. These organizations still seem to figure out how to get it right and keep going and one of the commonalities that I pegged to was great leadership. And so, I've always believed that leadership mattered and there have been a few tools that I have collected across my career that have added to that and I'm just I'll share just a few of them, Steve.
Tracey Brown 40:09
And these are things that people will be like, oh my gosh, that's profound, but these are the things that matter because what, what it is about is helping people unlock the potential within themselves and helping people become the best version of themselves and when you do that, your business Steve benefits and thrives. So, one of the things that I learned early on, is you, you got to get points on the board, say less, do more, even as a leader, right, are you having an impact.
Tracey Brown 40:50
The other thing that is clear on my list is that people at the end of the day, want to be a part of something, Steve, and they want to be inspired. So are you clear, as a leader on what your vision is, where are you going, what are you doing, and, and does it have purpose, because I think too, today, more so than ever, people care more and more around the purpose of an organization and what, what you value, what matters, do you say what you do.
Tracey Brown 41:33
And so the other thing, the third thing I would say is how do you show up, how do you show up as a leader every single day, the things that you say, the things that you do add up to who you are, as a leader, I've amassed those three tools in my toolbox over time and these are the things that matter most, now more than ever, right now, Steve, because it's about galvanizing and mobilizing people to do something bigger than they could do on their own by themselves and that's why I am here at Walgreens, to drive this transformation of our health and wellness because there are too many millions of people suffering and dying in the greatest country in the world because of poor health.
Steve Dennis 42:37
Right.
Tracey Brown 42:37
Leadership matters.
Steve Dennis 42:39
I love that. I think sometimes, you know, my own experience has been that simple is better. Like those, those are very straightforward kind of principles. It's just we don't see it being, being lived out in the world as much as we all need. So, it's a great place to leave it. Thanks so much for joining us. Congratulations on your personal success, your team's success and everything that's, that's going on, on Walgreens, in Walgreens and hope to see you in a shorter interval than 13 or 14 years.
Tracey Brown 43:08
Let's make it happen. Thank you so much for having me, Steve. Enjoyed it.
Michael LeBlanc 43:12
If you like what you heard, please follow us on Apple Spotify, or your favorite podcast platform, and be sure to drop us that five-star review. New episodes of Season 6, presented by Market Dial, will show up each and every Tuesday. Be sure to tell your friends and colleagues in the retail industry, all about us.
Steve Dennis 43:27
And I'm Steve Dennis, author of the best-selling book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. You can learn more about me, my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 43:42
And I'm Michael LeBlanc, consumer retail growth consultant, keynote speaker. You can learn more about me on LinkedIn and you can catch up with Steve and me at the World Retail Congress, April 25 in Barcelona.
Michael LeBlanc 43:53
Until then, safe travels everyone!
SUMMARY KEYWORDS
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