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At the Corner of People and the Business

Walgreens CHRO Kathleen Wilson-Thompson is building an HR infrastructure to support the organization as it rebrands itself into a global health care and retail company.

April 23, 2013
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Kathleen Wilson-Thompson said her husband was happy when she was recruited to be Walgreens’ senior vice president and chief human resources officer three years ago. She already had a strong connection to the organization, one she shared with her young daughter that he had tried to curb: “I’d never take a list; I’d put her in the basket, we’d go up and down the aisles, and I’d let her pick stuff and throw it in. He’s like, don’t do that.”

But being able to connect to one’s organization is good, especially when the national drugstore chain now has a rapidly expanding global footprint — it is on track to merge with multinational health and beauty chain Alliance Boots. The company also has a new business strategy as it emphasizes helping people get, stay and live well. Its official marketing tagline is “At the corner of happy and healthy,” and that intersecting business and people strategy applies to its workforce of more than 240,000, as well as its customers.

That’s where Wilson-Thompson comes in. When she joined the company in January 2010 after almost 19 years at Kellogg Co., she said she had several conversations with CEO Greg Wasson about his desire to build a world-class team and community at Walgreens with the stores at the center of all activity.

“We are reinventing community pharmacy, and we’re now becoming a global company,” she said. “How do we build a new HR team that’s going to drive programs and initiatives that touch all of our people?”

In lieu of personally connecting with every employee at the company’s more than 8,000 stores, Wilson-Thompson has championed strategies to facilitate communication with team members, patients and customers.

For instance, the company began a series of listening tours, and Walgreens’ town hall format has expanded to include virtual meetings where team members can air their concerns and ideas. No question is off limits, and Wilson-Thompson said in addition to promoting a sense of community, the ideas generated during these sessions create workable solutions to company challenges. Then managers build action plans and track them, and every leader is required to have check-ins that are part of the annual performance management process.

The Legal Eagle
Wilson-Thompson didn’t begin her career in HR. The Saginaw, Mich., native is an employment lawyer by training with an undergraduate degree in English literature from the University of Michigan, and a juris doctorate and master of law in corporate and finance law from Wayne State University. She was a practicing litigator for several years before she was recruited into Kellogg’s legal department. There she was promoted to vice president of labor and employment law, and her direct reports were business unit lawyers and all of the company’s employment lawyers globally. From that role she was promoted to lead HR globally.

Wilson-Thompson said the transition from legal to HR came naturally because HR was always her principal client. She had a keen interest in employment law and its impact on people, and made it her personal and professional goal to ensure that she and her team were protecting the company’s interests as well as the employees. “I prided myself on driving that kind of balance and became ultimately respected for that … at the time I was running the employment law section for Kellogg, the then-CEO reached out to me to head HR.”

HR is a highly regulated area, and while many of the laws don’t necessarily require a legal degree to interpret them, Wilson-Thompson said her background as a labor and employment lawyer helps her understand the impact of different laws as she translates them for the leadership team.

Walgreens’ business transformation began about 18 months ago, and at the same time Wilson-Thompson and her team have been building a new HR infrastructure to support the business. There are multiple components. For instance, a new pay-for-performance system helps the company drive greater accountability for goals and goal setting. Then there’s Walgreens University, a 40,000-square-foot brick and mortar facility near the company’s headquarters in Deerfield, Ill., which launched earlier this year. The primarily leader-led university was built to prepare the workforce for change, facilitate knowledge transfer and act as a recruiting tool.

Wilson-Thompson also spearheaded a new HR business partner model that pairs HR generalists with different business functions such as legal, IT and communications as well as business units such as pharmacy, specialty drugs and ancillary businesses like the chain Duane Reade.

Kermit Crawford, Walgreens’ president of pharmacy, health and wellness, works with one of those HR partners and said hiring efforts have been easier and more successful because of the model. His partner understands his strategy and what type of people and skills are needed to accomplish strategic objectives, and has facilitated relationships with search firms, resulting in better-quality hires.

HR business partners are selected and groomed for the position. Business owners identify what competencies are required for each role. For example, the partner for IT is well-versed in the issues associated with information technology. HR also has a business partner as well as a lead for the company’s mergers and acquisitions team. As Walgreens becomes more acquisitive, Wilson-Thompson said the partnership helps to ensure new companies are integrated fully with a team of dedicated resources.

“We’ve gone through a lot of changes in the organization, bringing in a lot of new people from the outside,” Crawford said. “I think she’s done a great job of helping to acclimate people to the Walgreens family and culture.”

Expanding Capabilities
During the past two years, Wilson-Thompson said Walgreens has improved its attrition rate by boosting employee engagement as measured by the annual employee survey. “It’s said to be difficult to increase your engagement more than one point per year, and we’re really pleased we were able to achieve that metric … and we did see a 19 percent improvement in team members who are highly engaged,” she said.

There is a direct link between employee engagement improvements and sales improvements, and because of that Wilson-Thompson said she and her team are able to drive better visibility to the company’s strategy. “We give our employees clear performance expectations that help them perform and align to the business objectives because we put the goals out relative to the performance management process and then later survey.”

Crawford described Wilson-Thompson as a visionary, someone smart and strategic with all of the qualities of a great leader. “Kathleen lives, breathes, demonstrates and models the culture we want for every one of our people at all levels.”

That affinity for managing people and facilitating relationships ensures that Wilson-Thompson’s HR strategic implementations do not stop with policy. “My experience with Kathleen over the last three years has been that she is really a compassionate and caring person,” Crawford said. “That’s what I’ve seen in the work environment, but during Hurricane Sandy, Kathleen was that same caring and compassionate person.”

Wilson-Thompson and other senior leaders helped during the hurricane as well as the 2011 tornado in Joplin, Mo. Support took many forms: passing out medication, diapers, food and other supplies; surveying stores for damage; and ensuring team members had access to the employee benefit fund. She said sometimes she even prayed with the afflicted. The company also turned one of its parking lots into a triage center for the Red Cross.

“These are our team members who, even though they lost everything, did everything they could to get to work,” she said. “They were more concerned about the communities they served than they were about their own well-being. That was deeply moving for me. I just can’t say enough good about our people. We had people come from all over the country to help even though they hadn’t been harmed by the storm.”

Creating a Healthy Employee Experience
Wilson-Thompson said the biggest play for talent management will happen through Walgreens University, which will ensure the company can build a highly trained, educated team. “As one of our core strategies we have to attract and retain customer service-oriented people,” she said. “At WagU we have the mock store, mock pharmacy and clinic set up so when we bring our folks through they’re receiving a consistent training experience that’s going to translate back to their communities and stores.”

The company is also building a service delivery model so that employees have one place to get the HR information they need through a shared services call center. The call center will relieve managers and pharmacists in the field of the need to answer certain types of questions so they can focus on running the stores.

It will have manager and employee self-serve functionality. All team members will be able to access their information via one number and a tiered level of support. Everything from performance management to benefits will be automated.

“We will be better equipped to give them consistent answers, one place to find all of the policies, processes and procedures they need,” she said. “If they need to escalate it they would be able to go to an employee relations specialist. This will give our employees and team members a more consistent employment experience as well.

“Our store managers — and any employee for that matter — will be able to access HR information more efficiently and quickly. We call out our HR values as consistency, fairness and transparency. This new service delivery model will help us ensure that we’re living those HR values.”

To build an HR infrastructure that would create a new experience for team members, and understand and respond to their needs, Wilson-Thompson said she and her team took a historical look at the company’s cultural values and beliefs, and gave employees the chance to submit their input.

“Our CEO decided that culture is going to be his No. 1 priority with respect to implementing the business strategy,” she said. “Our people have to one, understand and align with the strategy … but also understand how we all meet our accountabilities, and through that our senior leadership team developed a new set of cultural beliefs: Be one, be real, be bold, build trust, love customers, own it and live it.”

Wilson-Thompson said they are cascading the beliefs through cultural storytelling such as tales from Hurricane Sandy, the tornado in Joplin or any other story where a pharmacist opens a store at night because a child needs a particular medicine. This strategy will help each member of the organization understand what the beliefs mean and have them resonate.

“Many CHROs like to say that we are business people who have an expertise in HR, and we certainly say that at Walgreens. What’s incumbent upon us as HR professionals is to ensure that we’re living that,” Wilson-Thompson said. “Often we get caught in the daily role of delivering HR services, but I consider myself the business partner to the CEO. He has the voice of HR, the voice of his actual 250,000-member team through my lens. That lens is informed by my team. The more I can drive that with my leadership team and have them cascade that to their people, I think we become the strongest HR team in America.”

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