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00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor, the highest quality of mankind. I've often thought this private equity. And then I started interviewing on my watch here, interviews those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said, fine. I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest Matt Miller ISE. Right? Currently, there are only two Fortune 500 companies run by African-American women. One of those women is Roz Brewer, who is leading Walgreens Boots Alliance, a well-known pharmacy chain. I sat down with Raspberry to talk about how she's trying to transform that company into one that also offers additional health care services to its customers. I have noticed that Walgreens and a another company, it's also in the drugstore area. I won't mention their name, but what a competitor of yours. Both of you seem to be interested in being in the health care business as opposed to the pharmaceutical drugstore business. Why is that? What's so much better about the health care business? So, first of all, you know, we've been Walgreens started in 1981. And, you know, when you think about drug dispensing, it's it's critical to all of us. At some point in our lives. But one of the things that's very clear to us. Ending the pandemic are in the middle of a pandemic. We realized our relationship with our customers and our patients was so much more critical. We delivered 70 million shots in arms during the time of the pandemic. But the relationship just went to the next level. Pharmacies have always been consultants with customers and patients, and you will see your pharmacist 10 times more than you see your primary care physician. But the idea of having a primary care physician interacting with the pharmacies is the way of the future. And we will. We will need that ecosystem around us. So in your case, Walgreens case, you have begun a business. You've bought a lot of companies in this area that are primary physician companies, in other words. That's right. You buy the practices of primary physicians. And then in effect, those doctors are working for Walgreens and they are still serving their patients, but they're in effect, employees of Walgreens, is that right? That's that's correct there. So we are purchasing we just purchased Summit Health in the New Jersey New York area. And now we're one of the largest primary care physician practices in the country. So primary care physician practice. What? How many people in the United States? Over three hundred. 30 million people we have or so. How many of them actually have a primary physician? From what we understand, less than 30 percent of Americans have a primary care physician. And you think it's good to get an annual physical every year? I know you're not a doctor, but now I'm not a doctor. But I will tell you that, you know, we're all going to be responsible for our health, both financially and managing our own care. And to get a physical every year is a good database for you, a baseline to build for yourself because it's going to fall back on you. You need to know more about your personal health so that you can interact effectively with your primary care physician. So I get an annual physical every year. I try to starve myself for the two weeks before they guess I have mine tomorrow. Yes, I have found that doesn't work. But OK. What do you think the biggest health care challenges for Americans? Is it that we're overweight? We take too many drugs? What it does. So I think it's it's two pronged. One is that, yes, obesity is a big problem. But I think it's it's negligence, but it's not intentional. I think people are confused about the cost and access of health care and they think it's going to cost them a lot. And when people have variable employment, as we've seen across these last several years, is that, you know, they're not quite sure what their insurance will cover and not cover and what their out-of-pocket expense will be. So they avoid going to the doctor. And I think that is something we've got to bring clarity to, which is why, you know, the digital side of health care is going to become very important so that we can all look at our mobile devices and understand what's going on with their bodies. Covid brought a lot of people into the drugstores to get their Covid shots, I guess. Has a business picked up or going down since Covid is more or less waned a bit in terms of people getting shots. You know, what we're seeing at Walgreens is that we created, you know, an expanded relationship. It did start with immunizations, but now people are very deliberate about their flu shots. And so they're still getting Covid shots today. Vaccines today and they're getting flu shots in combination. Our retail business, if you look at our prior earnings, is is up and performing well, especially as we transition into health care. The front of our stores are are picking up. So I read that post Covid. It's difficult for companies like yours to get entry level people to come in there. They don't want to come back into the workforce or they don't want the job that you can provide them. Is it hard for you to get people? I notice in the stores I go to the drugstores. They're always fresh people all the time. New pants? Yes. You know, there's a lot of turnover at the hourly level. I will admit. But as we have these conversations, it's becoming less about pay and more about their lifestyle and what they want to do and progression. And so what we're encouraging is that, you know, work at a Walgreens store and you can become a shift manager and escalate. And that's really what they want to think about as a career and development. So if you were an entry level person at one of these stores like Walgreens, what kind of compensation you got is the more above the minimum wage, but you pay like 15 dollars and Alix Steel. Exactly. Exactly. And then it moves up based on, you know, shift manager and other responsibilities in the building. So I've noticed that in a lot of these stores I go into, they used to be younger people post college or something, which the younger people working. The drug drugstore now I see a lot of people who are older, I would like post retirement kind of people doing it. Is that a phenomenon? You know, we we see both, you know, on the younger end of the spectrum, it's those looking for development or fill in job while they're in college and doing something otherwise in their lives. And then the retirement community is a very rich environment for us to recruit from. So I noticed in a couple of drugstores, even in my area, which is not the poorest area in Washington, D.C., it's a nice upscale sort of area. When I went to get razor blades, you have to go to the front of the place and ask somebody, unlock it. Why? Why are you locking up razor blades and other things that I might want to buy? So, you know, this is a national problem. And, you know, this isn't, you know, random theft. This is organized crime. And state legislation has put guidelines on, you know, how much you you know, the theft that you can steal before you're convicted. So it's a thousand dollar limit. But we have been partnering with other retailers and sharing our camera feed. I know some of our partners here from Wal-Mart are here, but we're all part of an organization that's coming together. It says if he'd you know, we can put our camera feed together and tell that that person has been in our store, in their store, and the numbers are higher than 1000. So we've been able to impact these offerings most recently. What are the things that are unlocking key the most? What are people trying to steal the most other than razor blades? You know, I will tell you, I actually it started at razor blades because at such a high ticket item. But, you know, it's a lot of cosmetics. But really, what happens is that they take advantage of what I would call the elbow move and they just come in and swipe a counter. And so it's just a matter of categories now, almost. And not just particular. So what is the most profitable high margin thing that you all sell? I'd have to say it's in our cosmetics area is is right. And it's in some of our durable medical goods, some of our take home testing and things like that are are very nice margin item. What is the most commonly frequent thing that you sell? Most frequent thing is probably toiletries like toothpaste and personal care items at those those. And why is it that whenever there is like a scare coming along or a pandemic or something, people rush to buy toilet paper? Notice that people are just stockpiling toilet paper. It's that sort of hoarding for them. It's one of those things you never want to be without. OK. What's the biggest surprise of being the CEO of Walgreens? How complex healthcare is and how unfortunate it is to try and manage, you know, personal health in the health systems that we've set up in this country. You're from Detroit, your family. How many siblings do you have? I have three sisters and a brother. OK. And you're the youngest. I'm the youngest of five. OK. And are any of the others running drugstore chains now? Well, I do have a sister that's a pharmacist. Well, she had Walgreens or. No, she's not. No, I don't want to mix. OK, so. All right. So you're part of your parents, too. So both my parents are deceased, but my parents worked in the auto industry. And so my dad eventually worked as a member of management and my mom worked in hourly labor. So, you know, there are many good colleges. She went to Spelman, an excellent college in Atlanta. Why did you choose Spelman? Well, I chose Spelman because, you know, I grew up in Michigan. I wanted to do something a little different. Get out of the cold weather. But it was also a chance for me to be at an institution that I thought really reflected me, who I was and what I wanted to do. And I think also, too, I mean, I got a scholarship. And so that was helpful being. At the time, there were four of us in college. And so I was actually pursuing, you know, support at that time, too. And what did you major in? What did you want to be? I majored in chemistry. And I thought, you know, I had always been pretty decent in the math and sciences. So I just did what I knew what to do. And I thought I'd either go into medicine or engineering. And actually, I was recruited away by Kimberly Clark to work in long range research as a chemist. So I thought you might go to medical school, but Kimberly Clark stole your way. Right. OK. So what did you do for twenty two years? Kimberly Clark So I started off in long range research as a as a chemist. I was a organic chemist and I had interned my summers at General Motors. And so I worked in chemistry there. I worked in analytical chemistry and moved into organic worked in polymer science. And then I worked in on one of the businesses. I got a chance to join the emanate team probably about six years into my career. And at the time, it was when Kimberly Clark was converting itself from a paper company to consumer products company. And we acquired several companies. And I got to run one of those companies and I just stayed on the business side after that. So you're doing that. You're there twenty two years. You're happy, presumably. And all of a sudden somebody calls you up and says, how about working for Wal-Mart? What did you say? No, no. On the first call, I said, no, probably the first, second and third call. I said, no. You know, if initially they were speaking to me about a job in human resources and I really don't have that skill set. And so once an opportunity came along, it came about that had piano to it. I joined the company and I I was group president at Kimberly-Clark and I took a V.P. regional job to run the state of Georgia. OK. So you're at Wal-Mart and then somebody calls up and says, how would you like you're wrong? Sam's Club. Is that right? Yes. Well, a lot happened in the first five years where I ran Georgia, the southeast, then the east coast of Wal-Mart stores, and then I was a candidate for the Sam's Club job. All right. We're Minding Your Business. You're running Sam's Club eventually, right? Right. Good for five years. Yes, I did. OK. So you're there for five years. You're the CEO. Pretty good job, I guess, where you work, really where you're living to do that. I was in Bentonville, Arkansas. OK. You're in Bentonville. And all of a sudden, I guess another hundred called you up and said, how would you like to go to Starbucks, right? No, actually, I made the decision to leave Wal-Mart stores and I was on the board of Starbucks and I had taken the the board seat as I was leaving Sam's Club. And so I had a converse attending a board meeting. And Howard Schultz and Kevin Johnson approached me to become the chief operating officer. You said you don't really drink coffee or you didn't say that. You know, I was a tea drinker at the time. So that was interesting. And Seattle wasn't in my plans, but I did. I fell in love with the brand in the company. I saw a great opportunity for to help the company operate a little stronger. She moved from Bentonville to Seattle. And yes, AM the chief operating officer of Starbucks. And Starbucks has become so successful because its coffee is better than other people's coffee. Or what is the reason you think it's so successful? I think it's two things. I think it is definitely quality coffee. It's customized, right, for all drinking palates. I also think that it's their coffee practices along with the baristas in the store. I think the baristas are top notch and really interact great with the customer. What's the most popular thing that people ask for when they go to Starbucks? Is it? Oh, gosh. They are really just as simple. Which is a black coffee is still very popular at Starbucks. OK, a cold beverages are really trending. So, OK, so you're there. You're doing that for four years. Yeah. All of a sudden, I assume I had a hundred calls you again. Yeah. Now, that was a head to head and says, how would you like to run Walgreens? And you say, I'm happy at Starbucks or why? I say I think about it for a minute because I really I was enjoying Starbucks. I wanted to be there. And I didn't really think of myself coming back into that level of retail, but it was the pandemic. And there were so many people dying at that point and people who were adverse to being vaccinated. And I knew for sure because I follow the science on things. You know, my background is in chemistry. And the science just screamed, you know, that if the vaccine became available, we could curtail this. But at Starbucks, you have the perfect name for that brewer. Right. So Xavier mentioned that, you know, I got that all the time. You know, everything was what's brewing in all these. Yes. Hash tag. So what did you when you told Howard Schultz you're leaving to go to another company, what did he say? Actually, I had a conversation with Kevin first. It wasn't it wasn't pleasant. I think the board was a little surprised, you know. But we made it work. So do you ever go to Starbucks now? Every day. Every day. You never go to Sam's Club every day? Yes. Not every day. I buy bulk up in Boyle. Yes. OK. So now what's the biggest surprise of being the CEO of Walgreens? You know, I think the biggest surprise to me was how complex health care is and how unfortunate it is to try and manage, you know, personal health in the health systems that we've set up in this country. And it's it's it's perplexing. I think that this marketplace is ripe for disruption and I'm sort of drawn to transformation and disruption. So I became super excited about it once I began to peel back the understanding of the business. So you're the CEO of a health care company, in effect? Yes. You have the physicians business and you also have the pharmaceutical business. What do you do to stay healthy? Because you have to be a role model, right? You can't look like you're not healthy. Right. So I had you exercise a lot. Well, well, first and foremost, you know, like I said, my my my health exam is tomorrow morning. I'll be heading back to Chicago to get that done. So I'd take care of myself in that way. I like supplements. So, you know, I take my vitamins daily and then I will tell you that I workout three or four times a week as best I can. And so I make it a priority. I think about working out three or four times. Yes, I actually do. The thing I haven't solved, though, is sleep. And I think that's our biggest opportunity. If I get sleep down, maybe I can lay off of the supplements a little disposed to get eight hours of sleep a night. No way. No. You got. So let me ask you what it feels like to be in your situation, is it more disappointing or surprising that of all the CEOs in the Fortune 500. There are only two female African-American CEOs, only two. Right. You and the CEO of of teachers is the only other one, I think. Yes. And so are you surprised that at this late date in our history, we only have two or disappointed? Well, I'm more disappointed than I am surprised. I'm not surprised because I know what it took for me to get here. And I know the trials and tribulations that I've been through. And, you know, I'm not quite sure of a lot of people would want to withstand that. But I would tell you that the disappointing part is that this is just is totally ridiculous, that there's only two of us. I think, you know, it's going to go beyond mentoring and sponsoring. It's it's pipeline, you know, filling the pipeline, effectively getting people of different races in operating roles and having the confidence that, you know, that they can do it because they absolutely can. So in your career, what has been a bigger problem being a female or being African-American or neither? You know, I would have to say, being African-American, I think that it is still, you know, a an issue in our environment to accept people of different races more so than it is gender. I think I've seen a lot of progress with women in corporate America. And I'd like to see more progress with people of color. So as we talk today, you're in Washington, D.C., I presume you're here to meet with government officials to some extent. Do you find that enough lip uplifting experience when you do that? You know, I find I find quite a few teachable moments for both of us. You know, I try and bring the real life experience of health care to legislation so that when the right decisions are in front of them, they make great decisions. So what is the principle thing that the let's say, the drugstore industry would like to have the Congress do you know, first and foremost? You know, I would love to see our pharmacies to operate at the top of their license. And so for them to pass legislation that will allow pharmacies to both test and treat so that there's not a second step. And, you know, just imagine a mom who has to take a child out of school and take them to pick up a prescription, only to find out that the child is still sick and go back to the doctor. So if it's an ear infection, strep throat, we can do a test in the store to figure out and then pass on the prescription. And in the recovery period is smoother legislation for that? We absolutely do. Yes, right. And do you meet people from the administration as well? I do. You know, most recently there's members of Senate that are primary care physicians. And so I know who they are. So I meet with them regularly because they understand us best and help us carry them the message throughout. So your competitor, principle one is CBS, I think probably their largest competitor. Some people would say if I in fact, if CBS is right here and Walgreens is right there and I can go to either one, why should I go to Walgreens over CBS? I could pick either one. What? What why are you better than so glad you asked me that question. You know, I believe our customer experience model is stronger. I think that when you walk into a Walgreens store, you may not have this happen to you every time. But I think you get a nice greeting from our cashiers. And I think our pharmacies are second to none. If you walk into a Walgreens today, but they know you. It depends if I worked out that morning now because I don't recognize them. But sometimes no. Sometimes, yes. And sometimes I can hear them say that I'm in the store. You know, I can hear chattering so and so. You walk into a store, though, and if you don't like something, you call the manager and say this is good or you just kind of tell them when you get back to the office. So really what I do is I take a picture of it and I send it back to my team at the office and say, I wonder why this is happening. Right. Because usually it's a decision we've made that is causing something to happen nine times out of ten. It's something we've done versus what the store is done. If you need a prescription, do you have to wait in line or do I have to wait in line and wait in line? I do. You have to say I'm the CEO of this company. I'm waiting in line. Absolutely not. No, but usually there's not too much of a line. So but I and I know the best hours to show up to. You're obviously you've had incredible career. Your parents did your parents live to see your success? You know, it's interesting. If I could describe my dad, my dad would define my success as what I did in my life and throughout my education. My dad was that father that showed up to everything. If I was getting the yellow ribbon and not the gold ribbon, he was still there rooting me on. So he really knew who I was as an individual. You know, he we talked about that a lot. He passed away six weeks before I finished Spellman. And he he we had conversations. He saw something in me and he let me know that. So I think he is looking down. I think he kind of knew something good was going to happen. My mom definitely lived through a good part of this. And then my siblings are sharing in, you know, the the excitement in our family and your siblings. You were the youngest. Your siblings say, well, when we were beating you up, we didn't really mean it. Oh, yeah. The days my brother Dave, my brother would throw me across the room. Yes. So we're very close now and they have to wait in line for prescription. So sometimes headhunters are called you and said, would you be interested in this job or that if a headhunter called you now for another corporate job, your. No, I would not. I I really, truly think this is the combination of everything I've done in my life is is coming to bear right now. This is what I want to do. I'm being we're being very intentional about impacting medically underserved communities. That's important to me.

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The David Rubenstein Show: Rosalind Brewer

Rosalind Brewer, Walgreens Boots Alliance CEO, talks about the response to Covid-19, challenges in the healthcare industry and the lack of Black female Fortune 500 CEOs. Brewer is on "The David Rubenstein Show: Peer-to-Peer Conversations". This interview was recorded Dec. 7 at an Economic Club of Washington, DC event in Washington. (Source: Bloomberg)

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