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Will Walgreens U. Push Chain to Top of Drugstore Class?

February 25, 2013

Representing a doubling of its annual spending on employee training and development, Walgreens last week cut the ribbon on Walgreens University, a facility dedicated to providing classroom and online programming for employees.

More than 100 courses will be available through one of the few corporate training programs to offer college credit for certain classes, including pharmacy technician training and management and retail fundamentals. The program will involve universities such as Lake Forest Graduate School of Management, which will offer a customized MBA program; University of Maryland University College; Webster University; the University of Phoenix; and DeVry University, Keller Graduate School of Management.

Tuition discounts of 10 percent to 25 percent will be available to many Walgreens employees, with some discounts also available to employee spouses and dependents. Employees will also have access to non-credit management courses offered online from Harvard Business Publishing, a subsidiary of Harvard University.

The facility in Deerfield, IL has technology-enhanced classrooms, a mock drugstore and videoconferencing capabilities. It will also be home to the company's 300 trainers and will be the base of operations for employee educational programs offered online and in regional locations nationwide.

The goal for Walgreens, according to its statement, is to "lead its industry in classroom and online programming that engages, educates and develops team members for rewarding long-term careers." Plans are to double the number of learning opportunities for employees through expanded online classes, regional training sessions and in the Deerfield campus classrooms.

Walgreens University's dean is Bruce Bryant, SVP with over 42 years at the company.

Walgreens' statement noted that U.S. companies increased spending on training and development 12 percent last year, the highest growth rate in eight years, according to Bersin by Deloitte, a human resources consulting firm.

"If we are to attract, retain and develop the best talent, if we are to achieve the organizational agility necessary to adapt to changing markets, we need an industry-leading education and development program," said Walgreens' Kathleen Wilson-Thompson, chief human resources officer, in the statement.

FINANCIALS:     [NYSE:WAG] [ ]

Discussion Questions:

Will Walgreens University provide the chain with an advantage over its competitors? Will the effectiveness of the program be reduced because employees have to pay for college-accredited courses, albeit at a discount?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How effective will Walgreens University be in raising the professionalism of the chain's employees?

Comments:

At first reading it can't help but sound like an absolutely fabulous idea. Making people development a significant investment rather than a cost-center is a rarity in retail and in the corporate world for that matter.

But the impact will depend on what the actual learning and experience is. Because there's a whole herd of university-type institutions involved, can Walgreens employees really count on anything more than an academic or mechanistic experience? If these are basically "courses" anyone can take then where is the uniqueness and competitive differential?

In another item in RW today is the discussion about "emotional engagement" with a brand/product. The "most important" dimension of the purchase decision it says. Assuming that's true do you think there will be a "course" on emotional engagement? Heck, I'm a psychologist and most of my courses—even on a graduate level - didn't have much if anything on that. Fortunately those were the long ago days of sensitivity training, 'T' groups, Esalen and "Bob, Carol, Ted and Alice." Made me emotionally engaged in spite of university. I've got to just take a moment to say I love each and every one of you here on RetailWire. Really. I love ya man!

Seriously, taking a course is great, committing yourself to a cause is on a whole other plane.

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Ian Percy, President, The Ian Percy Corporation

If the training provided includes better ways to service the customer, than great I'm all for it. Just because someone is smarter doesn't always translate to the performance of the employees working the store.

Is there an opportunity for job advancement built into this scenario?

I realize Walgreens knows that the future of the healthcare with all the boomers is a huge tidal wave of growth for the right store who does their job well, and I applaud the effort. Just make sure the service matches the knowledge, and it will be a huge plus for them.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

This is a very ambitious program that faces a number of obstacles. Do all Walgreens employees need to go to the campus for training? Obviously with the investment in technology much can be done online. Unless everything is done online there is a lot of travel expense.

With a staff of 300 on site, the coordination of courses, content, and assessment with all the different academic institutions listed could be problematic. When students receive degrees, from which universities are the degrees offered? Who offers specific courses? Obviously training and education is essential for any company to be great. Whether the details can be worked out to provide the best training and education with this approach remains to be seen.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

I think that it will provide an advantage, especially given the complexity of today's retail landscape and category management practices as an example. As stated in the recent whitepaper by the Category Management Association, "Category Management Mastery: The Key to growth," category management presents a major human resource (training) problem because excellence requires disparate skills and experiences. Category managers on both sides of the desk must understand marketing and sales, sophisticated math concepts and path to purchase issues, corporate strategy, and retail aisle operational issues, because category managers must be able to translate marketing intent into retailer execution.

A big part of solving this problem is for category managers to be better trained because the function touches marketing and sales, shopper research and retail operations. Senior management must see this as an opportunity to create a significant advantage. Looks like Walgreens has recognized this and will benefit from it.

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Zel Bianco, President, founder and CEO, Interactive Edge

Walgreens U is a great idea and something other corporations have done. For example, Daymon Worldwide based in Stamford, CT offers a Daymon University. Although they are not directly associated with Universities (I don't think) like Walgreens, the benefits are great for Daymon employees and their retail partners.

By providing Continuing education classes Walgreens will, in my opinion:
1) Retain employees longer
2) Provide better customer experiences
3) Promote from within more often
4) Lower the overall cost of hiring and training
5) Attract new employees eager to learn

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

The devil is in the details. Done well, the answer may be yes; done poorly, not so much.

That said, the idea of having employees pay for it is ludicrous. If you believe in training, why not underwrite it?

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Nice idea, but the employees who would benefit the most from the training will not be able to afford it, even at a reduced rate. Since the primary benefit of training accrues to the employer, the employer should pay for it.

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Al McClain, CEO, Founder, RetailWire.com

Doesn't all this rhetoric about training and Walgreens U depend on how it is perceived and accepted several levels below the corporate "Ivory Tower" and promoted by a PR firm? If this is not seen by store level employees as a chance to better themselves, it will fail.

I read this and then thought of the level of customer service at the store level now. It is poor. How will Walgreen U improve it? Show me something. Then I will be a believer. Actions speak volumes.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Education and investment in employee development is a good thing generally, but the 10-25% tuition-reimbursement part of this plan just stops me cold.

Checking the Web, one of the online MBA programs cited costs in the neighborhood of $12K - $28K. Another school posts a per-credit unit cost of $3,036. Will this be affordable to store employees, even with the subsidies and financial aid?

If Walgreens University is an elite executive development program, then they should call it just that. I would be more enthused about a program designed to attract and groom highly capable store managers—with a much higher ratio of company subsidy.

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James Tenser, Principal, VSN Strategies

Who isn't for expansion of educational opportunities? Nobody! As Walgreens' employees become more educated—and that's a wonderful goal—where do they best manifest their new brainpower? At Walgreens, at a competitor, or elsewhere? The devil is in the future revelations.

Meanwhile, I am trying to reconcile in my own mind how Walgreens U relates to their current in-store merchandising. Nonetheless, kudos to Walgreen for trying to improve matters.

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Gene Hoffman, President/CEO, Corporate Strategies International

Absolutely—this is the kind of game changer that will retain talent, develop talent and provide a much needed incentive for associates. In retail, everything comes down to the quality of the face to face interaction customers have with associates. If associates are getting smarter, they will make your customers smarter.

Gideon D'Arcangelo, VP Creative Strategy, ESI Design

While this may go far to attract employees to Walgreens, I am not sure of the long-term effects. Where is the incentive for them to stay? Are the programs aligned with career advancement? Still lots of questions to be answered before the jury can go out.

Lee Kent, Let's meet share and succeed in Retail, YourRetailAuthority

Many companies complain they cannot find qualified applicants. This is and should be an indictment of our education system. Rather than complain, Walgreens is doing something about the issue.

Some of the benefits of in-house education programs are consistency of customer service and reduced employee turnover. The latter could pay for the program. After getting past the issue and expense of in-house education, the key issue is what is being taught and the quality of the education experience. Long term, Walgreens should a achieve a leg to stand on in the highly competitive retail environment.

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W. Frank Dell II, CMC, President, Dellmart & Company

I see two advantages to Walgreens U. The first is employee fulfillment. This can be a nice benefit to a good and qualified employee. The result for Walgreens may be less turnover of good employees.

The second advantage is to the customer. Customers will appreciate knowledgeable employees. They will have better interactions, and that will help create a better customer experience.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

There can be no doubt that this is a positive initiative. And, the comments above about the costs may be justified—but I am still in favor of the thrust of the initiative. Any time a company recognizes that skills, knowledge, and abilities are a competitive advantage—I applaud.

My only addition to the discussion and far-ranging views provided is to remind people that none of these initiatives can succeed in a vacuum. The incentives, evaluation process, selection, organizational structure, resources/tools used, etc. must also be aligned with what is being taught (or, conversely, the coursework must align with those things) otherwise it is an academic exercise without practical application.

I also paused when I saw that the Dean was a 40 plus year veteran of the company. I do not know the person, and have no opinion or bias on ability to be the Dean. I did wonder, however, how connected is that person to the young employees, new employees, lower-ranking employees, etc. (the answer may be VERY...but I do have a fear based on just that one data point that the ability to relate "Student to Dean" may be remote.

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David Zahn, Owner, ZAHN Consulting, LLC

Hooray for Walgreens! The better they train and educate their workforce, the greater the benefits they will realize, both in the short-term and the long-term. By investing in their employees, Walgreens is demonstrating a positive attitude about their employees, their future and their working conditions.

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Kai Clarke, CEO, American Retail Consultants

Training is usually along the lines of "how to use the cash register," i.e. it's focused, essential and the payback is obvious. This is clearly more along the "development" side and has none of these attributes. As such it will be (one of) the first thing(s) cut back the next time some analysts gang-up and complain W's costs are too high.

'notcom'

In today's world the smart employee, the one you want to retain and grow, realizes that the key to success lies within themselves. By Walgreens offering this type of training, even with a employee pay option, they are creating a sure competitive edge not only to others in their space, but to all retailers.

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Mel Kleiman, President, Humetrics

Good idea? Yes. A competitive edge? Yes (for now). Realizable benefits? A qualified yes if good—and committed—employees can be retained longer and if the customers see a difference.

This is a bold endeavor for Walgreens. Creating a rigorous curriculum, staffing effectively, and attracting students is not an easy business ... of course, neither is running an 8,000+ store chain!

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Dave Wendland, Vice President, Hamacher Resource Group

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