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LONDON — As recently as three years ago, Stefano Pessina was unknown in the United States. Those in the mass retailing community who had heard of him connected the name with Europe and, more specifically, the Boots pharmacy chain, leader in the United Kingdom.
As recently as three years ago, Stefano Pessina was unknown in the United States. Those in the mass retailing community who had heard of him connected the name with Europe and, more specifically, the Boots pharmacy chain, leader in the United Kingdom.
Others tied the name to various European countries, most commonly with drug wholesaling (Alliance Healthcare) but also with retailing (Boots) on the continent.
Industry people who traveled to Europe for retail conventions or business meetings might see him periodically, but nothing came of those meetings. Pessina was involved with retailing and wholesaling in Europe, another part of the world. And no European retailer or wholesaler had yet exerted an impact on retailing in America.
Today, these few years later, Pessina is in the process of transforming mass retailing and drug wholesaling in the United States. If most industry people don’t yet know him, most know of him. He routinely attends events sponsored by the National Association of Chain Drug Stores. He often visits New York City and, even more often, Chicago. He is the largest stakeholder at Walgreens, America’s largest drug chain. And it has been decided that from the creation of Walgreens Boots Alliance he assumes the role of acting chief executive officer of this new group, pending a board search for a successor.
Under Pessina’s leadership of Walgreens Boots Allliance, Walgreens is much more than America’s largest drug chain. It has become the global chain drug leader, while assuming a global leadership position in pharmaceutical wholesaling as well. More specifically, the Walgreens name has become linked with the Boots name and the Alliance Healthcare wholesale network, the latter extending across the globe.
Moreover, that brand has become transformational, both in what it has already accomplished and what it has set out to accomplish. Stated simply, Pessina’s presence in America has forever changed chain drug retailing in this country and around the world, and it is altering the traditional definition and practice of drug wholesaling as well. His presence is seen, heard and felt, and it is monitored by every mass retailer with which Walgreens competes.
Beyond that, the character of Walgreens is changing. Today, that company is managed by a growing group of executives who learned the business in cities across the United Kingdom and Europe, many of whom are relative newcomers to the United States. Conversely, many retailers who had grown up in this country and learned their business at Walgreens now practice their trade in London, Nottingham and throughout Europe and Asia.
To summarize, Pessina has transformed U.S. pharmacy retailing into a global health and beauty proposition. And it will never again be what it once was.
For this multitude of reasons, the editors of MMR have created a new award, for innovation and global retailing leadership, and designated Stefano Pessina as its first recipient.
If the award is new, its first designee is especially worthy of it. He is a complex individual, possessed of infinite patience, abundant curiosity and a degree of impatience unmatched in the current roster of U.S. retailing executives. One moment he exudes confidence and patience, the next a sense of urgency that expresses itself in acute dissatisfaction with the speed at which events are proceeding. Not that he is dissatisfied; rather, it can better be stated that he is never satisfied.
Approaching his mid-70s, Pessina works as hard and as diligently as he ever has. He’s seldom stationary for more than a week at a time, and he can travel to three different continents in the course of a week. He’s obsessed with people he hasn’t met, opportunities he hasn’t examined, business deals he hasn’t yet concluded. His retailing career has been one of virtually uninterrupted success, the most dramatic example being the merging of the Boots drug chain with the Alliance wholesale drug company that produced Alliance Boots, the world’s leading retail-wholesale organization outside the United States.
Until now.
Clearly, the Walgreens-Alliance Boots merger has dwarfed anything that preceded it, at least in the U.S. mass retailing community. It has combined America’s leading chain drug retailer with a retailer and wholesaler that has influenced the way these two businesses are practiced around the globe.
Is Pessina satisfied with the way the merger is proceeding? The more meaningful question is this one: Is Pessina ever satisfied? The answer is no. His current job is managing change. And his definition of managing change is more focused on change, not managing it. "We want to develop a more agile company," he says with his customary candor. "We want to modify our identity, to become totally focused on customer needs. More specifically, we want to improve our front-store offer. We want people to cross the street to shop Walgreens because our front-store offer is more appealing. We want to stand out from the crowd, something we have at Boots and Alliance Healthcare but do not yet have at Walgreens."
That answer, as is true of most of Pessina’s statements, is deceptively simple. In truth, he wants to enhance the Walgreens model — "You can improve the model; you can’t change it," he says — while integrating the two companies. And, yes, he’d like to continue to expand while aligning the two organizations. And of course, he wants to do it all quickly — so he can get on to the next assignment.
Pessina is driven by a genuine passion for growing the business, and he admires the opportunities America offers. However, he is, at bottom, a realist, as he recognizes that "not everyone here is open to change."
He says, "Much of what I thought about America has been confirmed by the Walgreens experience." So he freely expects that others will do much of the work of reengineering Walgreens — though, in the aftermath of the announced departure of Greg Wasson as Walgreens’ chief executive officer, he has not yet determined who will ultimately succeed him in that role. For now, however, the CEO is Stefano Pessina — at least for the near term.
And why not? He is brimming with ideas, concepts, theories, all built on the proposition that America brims with ideas, concepts and theories still waiting to be tested.
But Pessina is still learning more about mass retailing in America, still trying to grasp more intricacies and nuances of health care, still attempting to envision the utimately preferred shopping experience for the American consumer, still determining how to better balance cost effectiveness with consumer value and excitement. "Our main goal is to deliver the preferred shopping experience for consumers," he says, "and to do so in the most cost-effective manner. Along the way, we want to create a new culture, a culture that is a mix of the two, of Walgreens and Alliance Boots. And I believe creating a culture is our most important task for this reason: A culture is the engine of the new enterprise. I don’t mean this in the executive sense, but in the culture of our employees, the people who deal with customers on a daily basis."
Going forward, Pessina will do more than try to build a new company. If the past is prologue, he will succeed in doing so — and quickly. His record in retailing and in business says as much.
