Pulled the drug chain back from the brink of bankruptcy, returned it to profitability by improving Rite Aid’s corporate culture.Under her direction, the company's new management slowly opened new lines of communication with employees at all levels of the chain. Mary Sammons was honored with several awards and was named one of America's 50 most powerful women in business by Fortune magazine.
When Mary Sammons joined Rite Aid in December 1999, the company appeared to have no future. In the fall of 1999, the company was condemned for its aggressive marketing of pharmaceutical products and other consumer-unfriendly practices, including selling date-sensitive products well past the due dates. Rite Aid also had a major accounting scandal that led to the departure (and subsequent imprisonment) of several top ranking executives, including the CEO. The employees were absolutely depressed. What would you do in this difficult situation?
Mary Sammons started from… talks. Sammons quickly discovered that most of Rite Aid's employees had been all too aware of the company's problems under its previous management but had been rebuffed whenever they offered suggestions for change. “The people in this organization had a real desire to contribute and to ask the questions that had been bothering them for a long time”, said Summons. “Initially, the associates in the store were more vocal because it was easier for them; they didn't have to worry so much about what they said. The supervisors in mid- and upper management were worried about whether it was OK to say what they wanted to say. It was important for me to go out into the markets and get people to feel comfortable talking to me. If they could feel comfortable, then I would learn what I needed to learn, and that was one of the best things that I did in the beginning”.
One of the principles that has guided Summons since she became president and CEO of the company is that a retailer's most important resource is its people. “If your people don't feel valued and important, then it's hard for them to take care of the customers”, says Summons. “It was clear that our people knew the kinds of things they need to do. We just need to make it possible for them to do it. And that helped set the stage for what we saw as the foundation that we needed. So we went through a number of meetings to come to agreement on our core values as a company. We believe that's where we needed to start”.
Under her direction, the company's new management slowly opened new lines of communication with employees at all levels of the chain. “It became clear from focus groups with our associates that our people wanted to deliver customer service; they wanted to take care of customers”, remembers Summons. “But we weren't giving them all the tools they needed. We weren't giving them the training they need or the support they need”.
Mary Sammons concentrated on creating at Rite Aid a new corporate culture that celebrates both the customer and employees and focuses on trust. Under her leadership Rite Aid focused on four key priorities: growing pharmacy script counts, achieving front-end sales growth, controlling expenses, and improving customer service.
Another focus of Sammons's campaign to rebuild Rite Aid was to improve the morale of the drug chain's associates by involving them more deeply in the formulation of company policy. She created cross-functional teams within the company and fostered a spirit of collaboration both within the company and outside with key suppliers. “I had had about six or seven market meetings, and the same things kept coming up over and over again, says Summons. “What people were telling me were obvious kinds of problems: we're priced too high, we don't have time to take care of customers, and we need to be treated like valuable human beings. The concerns were so much the same across the board in the company that obviously our senior management needed to pay attention to them. It led to the formation of what I call our stakeholders group. We really pulled together key executives from across our company. If you're going to start talking about what the problems are, and to find solutions, you have got to understand from all points of view”.
During her first three years at Rite Aid, the focus was largely on front-end operations. Through the implementation of strong private label programs, marketing campaigns, product guarantees and high-quality customer service, the chain has established itself as one of the leaders in front-end sales in the drug channel, outperforming Walgreen's, CVS and Eckerd.
Greater investment in technology helped to hasten the chain's progress on the latter front, with robotics increasing the speed with which prescriptions could be filled and voice messaging systems giving customers a way to order refills easily and select pickup times. The payoff for these improvements was quickly reflected in higher customer counts and prescription counts.
Wall Street certainly noticed the changes. Rite Aid's stock price climbed from $2.17 per share on March 12, 2003, to $6.40 per share by December 8. “Not bad for a company that was once the object of one of the country's most serious financial accounting scandals, and not bad fur a company still pouring out $300 million a year in interest expense,” comments Richard Hastings, chief retail analyst for Bernard Sands. “Mary Sammons clearly led the way to credibility and good relations with employees, investors, fund managers and vendors”.
After years of unbroken losing quarters, in early 2004 Rite Aid earned $83.3 billion, compared to a net loss of $112 billion the year before, while revenues have increased steadily since 2000. “We really have turned our business around,” Sammons said, “and now we can focus on our future.”
After finishing high school in Portland, Mary F. Sammons (born October 12, 1946, in Portland, Oregon) enrolled at nearby Marylhurst College, where in 1970 she earned a bachelor's degree in French as well as a secondary-level teaching certificate. Before joining Rite Aid, Sammons was president and chief executive of Fred Meyer Stores, a 137-food, drug and general merchandise dealer in the Pacific Northwest. In addition to her responsibilities at Rite Aid and NACDS, Sammons also served as a member of the board of governors of the Children's Miracle Network.
Background Links
DSN Retailing Today: http://www.findarticles.com/p/articles/mi_m0FNP/is_17_43/ai_n6198646 The first steps Mary Summons made as CEO.
Retail Merchandiser: http://goliath.ecnext.com/coms2/summary_0198-67362_ITM How Mary Sammons orchestrated collaborative efforts that have transformed Rite Aid into a leading performer in the drug chain sector.
Drug Store News: http://www.findarticles.com/p/articles/mi_m3374/is_19_22/ai_68876801 Summons tells why it was necessary to change Rite Aid’s corporate culture.
Chain Drug Review: http://www.findarticles.com/p/articles/mi_hb3007/is_200201/ai_n7707949 Read about Summons’ attitude to employees.
Chain Drug Review: http://www.findarticles.com/p/articles/mi_hb3007/is_200408/ai_n7651963 Summons’ viewpoint on customer service.
Drug Store News: http://www.findarticles.com/p/articles/mi_m3374/is_9_26/ai_n6122140 Read about Rite Aid’s ad campaign “With us it's personal”.
Answers.com: http://www.answers.com/topic/mary-f-sammons Mary Summons’ biography.
