“Next Practices” at Walgreens: Metrics to Drive and Measure Strategy Corinne A. Wolcott Manager, Diversity & Inclusion October 23, 2014 ©2014 Walgreen Co. All rights reserved.

Diversity & Inclusion Next Practices at Walgreens Diversity & Inclusion at Walgreens The “Next Practices” Model Measurement & Assessment Insights into Action ©2014 Walgreen Co. All rights reserved.

Walgreens: At the Corner of Happy & Healthy® Team: 248,000 Fiscal Year 2013: $72.2 billion sales $2.45 billion net earnings 8,200 drugstores in all 50 States, District of Columbia, Puerto Rico and the US Virgin Islands serving nearly 6.3 million people daily 821 million prescriptions filled in fiscal 2013 (nearly 1 in 5 retail prescriptions in the US) with prescription labels in 14 languages 8.5 million vaccines administered in fiscal 2013 (#1 retail provider) Nearly 2/3 of Americans live within 3 miles of a Walgreens and approximately 65% of stores serve medically underserved populations ©2014 Walgreen Co. All rights reserved.

Our Diversity & Inclusion Journey 2011: Steve Pemberton is appointed the company’s first Chief Diversity Officer and the Office of Diversity & Inclusion is established. 2007: Walgreens becomes a federal government contractor. 2012: Diversity & Inclusion ‘Next Practices’ comprehensive strategy launched and implemented enterprise- wide. 2014: OFCCP Task Force for 503/VEVRAA launched. 2007:Business Resource Groups launch at corporate offices. 2011: Diversity Best Practices #26 for Supplier Diversity, published 5+ times since 2011. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007: Walgreens Anderson DC is the first to rollout our innovative DC Disability Program. 2010: Community Corner rolls out in stores to allow consumers to easily identify and purchase products produced by diverse companies. 2011: Initial pilot of REDI program which has now launched nationwide. 2012: D & I Awareness training rolled out to all team members. 2012: Integrated Supplier Diversity into D & I Strategy with full metrics across the business and doubled Tier 2 reporting. 2013: Regional Diversity Councils launch. 2014: D & I Team is featured in Diversity Executive Magazine. ©2014 Walgreen Co. All rights reserved.

The “Next Practices” Model

DIVERSITY & INCLUSION NEXT PRACTICES ACCOUNTABILITY & REVIEW Definitive D & I Goals GPS Measures Diverse Slates Review and modify strategies MEASUREMENT & ASSESSMENT D & I Scorecard Gallup Employee Survey HRBP Partnership Talent Management Compliance Bi-annual review of data STRATEGY Comprehensive D & I Strategy D & I BU/ Functional Strategy DIVERSITY & INCLUSION NEXT PRACTICES EXECUTION Implement BU/Functional Strategy EDUCATION & SKILL BUILDING D & I Awareness Training D & I Skill Building for Managers D & I integration into current programs BRANDING & COMMUNICATION Walgreens World Inter/Intranet Publications/Journals Annual Report Social Media

DIVERSITY & INCLUSION NEXT PRACTICES ACCOUNTABILITY & REVIEW Definitive D & I Goals GPS Measures Diverse Slates Review and modify strategies MEASUREMENT & ASSESSMENT D & I Scorecard Gallup Employee Survey HRBP Partnership Talent Management Compliance Bi-annual review of data STRATEGY Comprehensive D & I Strategy D & I BU/ Functional Strategy DIVERSITY & INCLUSION NEXT PRACTICES EXECUTION Implement BU/Functional Strategy EDUCATION & SKILL BUILDING D & I Awareness Training D & I Skill Building for Managers D & I integration into current programs BRANDING & COMMUNICATION Walgreens World Inter/Intranet Publications/Journals Annual Report Social Media

DIVERSITY & INCLUSION NEXT PRACTICES ACCOUNTABILITY & REVIEW Definitive D & I Goals GPS Measures Diverse Slates Review and modify strategies MEASUREMENT & ASSESSMENT D & I Scorecard Gallup Employee Survey HRBP Partnership Talent Management Compliance Bi-annual review of data STRATEGY Comprehensive D & I Strategy D & I BU/ Functional Strategy DIVERSITY & INCLUSION NEXT PRACTICES EXECUTION Implement BU/Functional Strategy EDUCATION & SKILL BUILDING D & I Awareness Training D & I Skill Building for Managers D & I integration into current programs BRANDING & COMMUNICATION Walgreens World Inter/Intranet Publications/Journals Annual Report Social Media

Measurement & Assessment

Design and Focusing in on Key Opportunities Establish how D & I aligns to and supports business objectives Define what success looks like Assess what data is available Communicate data that is both relevant and actionable Establish appropriate benchmarks or goals Marketplace Total Spend with diverse suppliers (Tier 1 and 2) Diverse spend as percentage of total spend Talent Representation Talent Mobility/ Progression Performance Management Succession Planning Culture Engagement Inclusion Education & Skill Building Branding & Communications Accountability ©2014 Walgreen Co. All rights reserved.

Talent: Representation, Talent Mobility/Progression, Performance Management, Succession Planning Representation: Methodology leverages US Census job code mapping to establish diversity benchmarks by level and highlight areas of opportunity by business unit Analysis of hires Talent Mobility/Progression: Analysis of promotions and voluntary terminations Performance Management: Analysis of performance management ratings Succession Planning: Analysis of successor identification, potential and readiness ratings Make specific recommendations Integrate diversity in processes and systems Invest in training for HR and Leadership Focus on development Drive accountability ©2014 Walgreen Co. All rights reserved.

Culture: Engagement and Inclusion Diversity Inclusion Engagement Superior Business Performance Gallup® Q12 ® Survey Data specific, relevant and actionable Measures by generation, gender, race/ethnicity, tenure and location Normative data for benchmarking Review differences in engagement and inclusion Explore changes year over year to identify trends, develop differentiated strategies and measure progress ©2014 Walgreen Co. All rights reserved.

Measuring Engagement and Inclusion Engagement (Q12) Items Composite Score: GrandMean Q01. I know what is expected of me at work. Q02. I have the materials and equipment I need to do my work right. Q03. At work, I have the opportunity to do what I do best every day. Q04. In the last seven days, I have received recognition or praise for doing good work. Q05. My supervisor, or someone at work, seems to care about me as a person. Q06. There is someone at work who encourages my development. Q07. At work, my opinions seem to count. Q08. The mission or purpose of my organization makes me feel my job is important. Q09. My coworkers are committed to doing quality work. Q10. I have a best friend at work. Q11. In the last six months, someone at work has talked to me about my progress. Q12. This last year, I have had opportunities at work to learn and grow. Note: Q07. My Opinions Count part of both metrics Copyright © 1993-1998, 2001, 2014 Gallup, Inc. All rights reserved.

Insights into Action

Turning Insights into Action-D & I Business Plans Establish strategy based on data and aligned to business objectives, mainstream processes and areas of focus Foster inclusive collaboration with shared ownership and accountability Communicate to leadership team and organization to engage all team members to achieve goals Focus on specific actions with measurable results Regular reporting to evaluate effectiveness and account for continuous improvement. ©2014 Walgreen Co. All rights reserved.

Sample D & I Business Plan Strategic Areas of Focus Change Pillars Customized Goals Actions/Metrics (Reported on Bi-annually) Q1 Q3 Marketplace Supplier Diversity Measure: Stakeholders: Talent Representation Performance Mgmt. Talent mobility/ progression Succession Planning Culture Engagement Inclusion Education & Skill Building Branding & Communications Accountability = On Track = Limited Progress = Lack of Progress ©2014 Walgreen Co. All rights reserved.

Key Takeaways Inclusive collaboration and accountability drive sustainable change Start the conversation with what works and build upon strengths Design matters Establish customized, specific and actionable strategies- avoid trying to “boil the ocean” Align to business objectives and mainstream processes ©2014 Walgreen Co. All rights reserved.

Thank You and Be Well. Please contact me: corinne. wolcott@walgreens Thank You and Be Well! Please contact me: corinne.wolcott@walgreens.com Connect via LinkedIn