Walsh: Walgreen Way: Dan Jorndts' Roadmap for CEOs

Walgreen Way: Dan Jorndts' Roadmap for CEOs

By Matt Walsh/Editor and Publisher

L. Daniel Jorndt isn't exactly a celebrity name, but if you said recently retired chairman, chief executive officer and chief operating officer of the Walgreen Co. during its explosive growth the past decade, you take notice.

Jorndt, who retired as chairman in 2003 at age 63, led the drug store company when its growth statistics were mind-blowing. See chart.

A career-long associate of Walgreen, Jorndt served in the company's senior ranks during a phenomenal run. From 1975 through 2005, the company has reported increased sales and earnings every year.

Now this is a guy that will get every CEOs attention. And he indeed did that in a recent speech in Tampa to the CEO Council of Tampa Bay.

Wow.

If you want a roadmap on how to operate your business, read on. What follows is Jorndt's hour-long advice on what it takes to be a successful CEO:

"It's not rocket science," he said. "Mostly it's about people - how you treat them and how they treat you."

Jorndt joined Walgreen after the service and after he became hooked on the drug-store retail business as a delivery boy for his hometown store in the Midwest. In spite of the entrepreneurial itch many times to open his own corner drug store, Jorndt says one of the reasons he stayed at Walgreen "is I learned the best way to learn is to be with experienced people."

What does it take to generate increased sales and profits for 30 consecutive years? Said Jorndt: "It takes focus."

Walgreen was not always focused. Prior to the mid-1970s, it owned a travel agency, a manufacturing company and an assortment of other businesses that had little to do with pharmacies. "We had no focus," Jorndt said.

And it finally dawned on management: Get rid of everything not connected to the core. It took Walgreen a decade to shed its non-core businesses, but when it did, that's when Walgreen took off.

Walgreen's fast expansion in the 1990s, however, didn't just come from the wave of magic wand. Jorndt preached to his listeners the oft-repeated formula: "Crawl, walk, run."

It took Walgreen 10 years to figure out how to make the one-hour photo business profitable. "Learn it first, and then really pour on the capital," he said.

When Walgreen figured out the drive-thru window pharmacy, it filled 30% of its prescriptions, the day it opened its drive-thrus.

"You have to keep innovating and keep trying," he said.

"What makes companies last? They have very high ethics at their base. They aren't in it for the fast buck," he said. Jorndt quoted the retired vaunted founder of Merck, the pharmaceutical maker: "We're in business to prolong human life."

Jorndt recalled how Walgreen once inadvertently sold a batch of the wrong pharmaceuticals (non-life threatening) to a group of customers. During a senior executive meeting to decide how to handle the crisis, one executive suggested a scheme to replace the drugs when they were refilled. Jorndt recalled then-Walgreen President Fred Canning saying: "No way. Call every patient, call every doctor and call the state. And if we go down, that's OK. We'll all be able to sleep at night."

Said Jorndt: "Tell your employees over and over: 'This is what we stand for. This is how we think.' If your business has a lousy reputation, you can predict your own future."

At Walgreen, one of the company mottos is: "We believe that honest goods can be sold to honest people by honest associates."

Don't make committee decisions, Jorndt said: "If you take a good idea and a bad idea, you get a mediocre idea."

Remember this: There are no silver bullets.

Jorndt put a photograph of a hedgehog on the overhead screen. "Hedgehog companies are focused," he said. "Your job as CEO is to keep your people focused.

"Hedgehogs get rewarded," he said.

"You're never great in business. You always have to keep raising the bar," he said.

Be positive. "Your employees look to the leaders," he said. They look for the CEO to remind them that the sun going to come up tomorrow. "If the leader is positive, chances are that over time you will have a successful organization.

"Why were Ronald Reagan and Winston Churchill so admired?" Jorndt asked. "Because they were positive.

"It's up to the CEO to be that countervailing force ... because negative news travels so fast," Jorndt said. Borrowing a quotation, he said: "When you're going through hell, keep going."

Take note: "The CEO's number one job is selection. If you pick the right person, you get success. If you pick the right manager, problems go away," Jorndt said.

"Take your time. Sleep on it," he said. "Pick people for one reason: If you pick people on ability you will do well. Pick people who are long on values and high performers."

Be careful, though. Jorndt said the most difficult manager to deal with is the one who is a high performer but who doesn't buy in to the company's values. "Get rid of them," Jorndt said.

Hodie et nunc. Translating that Latin phrase, Jorndt said: "Do it now. Make decisions.

"If you have a meeting, by George, make a decision," he said.

Jorndt cited a common practice at Walgreen. Company members often hold up four fingers as a hand signal. It means four times faster. When meetings are dragging on, Walgreen associates will flash the four-finger sign. "Do things four times faster," Jorndt said again and again.

Jorndt told the story of Union Army Col. Joshua Lawrence Chamberlain. Chamberlain was one of the legendary Union colonels in the Battle of Gettysburg. In the face of horrible odds, Chamberlain held a small hill on the flank called Little Round Top. Had he lost, the Union likely would have lost Gettysburg and the war.

Recalling Chamberlain's heroic efforts, Jorndt offered the moral of the story: "Small skirmishes often determine the outcome of big battles."

So when one of your associates wins a small skirmish or experiences a small success, "let him know how much you appreciate it," Jorndt said.

Jorndt put the face of Einstein on his screen. "Einstein said, 'Imagination is more important than information,' " Jorndt said. "Being imaginative is important. And it's not just the guy or girl at the top. Be out in the field and listen."