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In 1922, the same year Pop Coulson came up with his earth-shattering shake, Charles Walgreen Sr did something far less splashy but far more lasting when he finally published in the chain newsletter the company creed he had composed when he started his first store We believe in the goods we merchandise, in ourselves and our ability to render satisfaction We believe that honest goods can be sold to honest people by honest methods We believe in working, not waiting; in laughing, not weeping; in boosting, not knocking; and in the pleasure of selling products We believe that we can get what we go after and that we are not down and out until we have lost faith in ourselves We believe in today and the work we are doing, in tomorrow and the work we hope to do, and in the sure reward the future holds We believe in courtesy, in kindness, in generosity, in cheer, in friendship, and in honest competition43 Decades before hollow mission statements became a national fad, this simple, sincere declaration laid down the fundamental values that Walgreens would follow to the present Every dot-com starts out and says, What s our corporate culture Well, you don t have one! exclaimed Dan Jorndt, who served as a Walgreens pharmacist, store manager, district manager, treasurer, and CEO in his 40year career Jorndt continued: You can t just adopt one or manufacture one This culture here is real, and it goes back a long, long way It s something solid, something tangible The original Walgreen was an affable, able, effective, and honest guy how s that for alliteration the kind of guy who knew what he wanted his company to look like, the kind of guy you can build a
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company on He had the kind of values that last You ve probably seen the Walgreen Creed, something he wrote years ago Well, we read it at our store managers meetings, and we get goose bumps It s that good 44
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Walgreen s approach caught on with his people, who in turn captured his customers From 1920 to 1925, the chain expanded from 20 to 65 stores, all but six of them in Chicago Such rapid growth, coupled with Walgreens noticeably consistent, principled approach to customer service, naturally started drawing attention from professional observers of such things The University of Chicago (U-C) found itself surrounded by Walgreens South Side stores by middecade, so it was only a matter of time before someone there decided to take a closer look In 1925, a business professor named James O McKinsey, who later served as chairman of Marshall Field and Company, became increasingly curious about the well-run company and suggested that one of his prot g s, Robert Knight, make a formal study of the chain for his master s thesis What started as a casual office-hour chat became a report that would help shape the company far beyond World War II Robert Greenwell Knight was born in England and raised in Canada, where he starred in the classroom and on the debate team two skills that would serve him well throughout his life at the University of Manitoba in Winnipeg He migrated to Chicago to study for his master s degree at U-C s Department of Commerce and Administration (now called the Graduate School of Business), where he met Professor McKinsey Once McKinsey unleashed Knight on the Walgreens assignment, the young graduate sunk his teeth into it like it was red meat, spending most of 1925 dissecting everything from individual window displays to corporate
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accounting practices; interviewing clerks, soda jerks, and executives; and producing 127 pages of transcripts and statistics, observations and suggestions the first comprehensive analysis of the chain by an outsider, and still one of the few ever conducted Knight opened his report by addressing the issue of chain stores, a hot topic at the time because chains had only recently begun to challenge the mom-and-pop operations that still claimed the vast majority of retail business (Chain restaurants and hotels the first thing we think of today when we consider chain operations would not be seen for decades) All things considered, Knight wrote, the chain store was the most effective medium for supplying consumer wants at fair prices (The debate would not end there, as we ll see, but Knight s conclusion was obviously shared by most consumers of the day)45 Having taken care of the chain issue for the time being, Knight then went on to address Walgreens in particular, dividing his study between the microeconomics of the operation of the typical Walgreens store and the macroeconomics of operating the entire chain On the micro side, Knight gave Walgreens very high marks Unlike most chain retailers, Knight observed, which stressed the importance of adhering to centrally determined procedures at the expense of the individual judgment of its store employees, The Walgreen Company believes in the exact reverse and refuses to put into practice many of the methods of close central control 46 Despite the premium Walgreens placed on autonomy, however, there were plenty of points of consistency across the chain, including excellent customer service ( Strongly believed and rigidly enforced ) and a commitment to a professional pharmacy department in each store ( whether it pays or does not pay a policy which is by no means universal with chain drugstore organizations ) Knight reasoned that such measures contributed to the development of the drugstore from the old fashioned chemist s emporium to the modern convenience goods department store 47 Although Knight described the company s store operations procedures as few and informal, he felt the chain could get away with it because
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