POWERBOOK 2013: Rite Aid CEO blends financial objectives, community involvement
John T. Standley was brought back to Rite Aid Corp. in 2008 and tasked with rebuilding the struggling pharmacy chain for a second time in nine years.
Today, the company again is turning a profit.
And those who know Standley said Rite Aid's CEO and chairman is hitting financial goals while balancing the job with community involvement, making him a power player in corporate leadership.
"As someone who was brought in to turn that company around, he could be laser-focused on business," said Tim Fatzinger, president and CEO of the United Way of the Capital Region. "But he's also aware of a company's place in the community and encourages that involvement. He leads by example."
Fatzinger first met Standley in 2000, not long after the young accountant joined Rite Aid. Standley has always been active in the local community, Fatzinger said.
"I think (Standley is) comfortable with participating in the community because he really believes in that," Fatzinger said.
Standley, a Los Angeles native, started in public accounting but moved into executive leadership as chief financial officer of West Coast grocer Smitty's Supervalue Inc. He later was an executive with food retail and wholesale firms Smith's Food & Drug Stores Inc., Ralphs Grocery Co., Fred Meyer Inc., and Fleming Cos. Inc.
Those experiences helped form his leadership style, as did his first stint at Rite Aid. He originally joined as part of the new leadership in 1999 to rescue the company from its accounting scandal. From 2005 to 2007, Standley refined his executive credentials with his first CEO job at New Jersey-based Pathmark Stores Inc.
After Rite Aid's 2006 acquisition of the Brooks/Eckerd pharmacy chain, which put the company into massive debt, the board asked Standley to come back, first in an advisory role, then as its president and chief operating officer.
After six years of debt and earnings losses — agitated by the worst economic recession in 80 years — Rite Aid posted income of $123 million for the fourth quarter of fiscal 2012, a huge turnaround from the previous year's $161 million loss.
"We were able to come in here and wrestle some of those issues," Standley said.
Once Rite Aid's debt was under control, executives had to stop the bleed of business to competitors and rebuild for the future.
"What kind of store do we want to run? What do we want the experience to be in the store? And how can we execute that?" Standley said. "That's what you really have to get back to."
Frank G. Vitrano, Rite Aid's senior executive vice president and chief financial officer, has known Standley since they worked together at Pathmark. He described Standley as "wildly smart." Standley cultivates a positive atmosphere, and his leadership is responsible for Rite Aid's improvement, Vitrano said.
"He has the ability to take a very complex issue and simplify it for people," he said. "He can weave through the underbrush and get to the core issues."
Standley seeks ideas from many people, which helps him understand and break down issues, Vitrano said.
"His approach, his style, is to be all-inclusive," he said.
That helps Rite Aid look at store longevity and implement programs such as its Wellness+ loyalty card for discounts on merchandise and pharmacy products.
The pharmacy is the backbone of Rite Aid, which leadership had neglected in the past, Standley said.
"We were all food and drug retailers when we got here (in 1999)," Standley said. "We were not pharmacists. We got pretty focused on the front part of our store."
Tighter store integration and brand focus on wellness helped Rite Aid executives see business was sustained by a small group of loyal pharmacy customers, he said.
"We were gaining a better understanding of our customers and patients," Standley said.
As people age, their need for health care services increases. If Rite Aid could reward those customers and supplement sales with health services, it could build a business model with staying power.
"It's not a revolution, it's an evolution," Standley said.
The results speak for themselves, said Rob Eder, editor-in-chief of New York-based Drug Store News.
"This isn't something that's happened overnight," he said. "It's something that's been building over time with John and the entire company."
In 2008, Rite Aid stock was worth less than a dollar a share, Eder said. Today, it's just over $5 a share.
"They took the chips they had and placed it against the background of wellness," Eder said. "They're rolling a concept into their stores, not just changing the shelves or the paint."
Standley's leadership goes beyond pharmacies and corporate turnarounds, others said.
"(Standley) has this incredible passion about supporting children's health and health care," said Harold Paz, CEO of the Penn State Milton S. Hershey Medical Center in Derry Township, Dauphin County.
Penn State Hershey Children's Hospital and the Children's Miracle Network will honor Rite Aid and Standley at their Nov. 23 Children's Miracle Ball.
Rite Aid, its employees, customers, partners and leaders such as Standley are active fundraisers for CMN, including $5.9 million to date for its 2013 campaign and $56 million since 1994, according to Rite Aid.
People are Rite Aid's main line of business, Standley said. But he attributes his sense of balance to the importance of family in his life.
He said he grew up with a stable, supportive family, but he was a workaholic when he was younger. It was his wife, Annie, who changed that in him and continues to keep him going more than 20 years later, Standley said.
"You get into something and you dive in and you immerse yourself in it, and you're working day and night, and doing all kinds of crazy stuff to establish yourself and build your reputation," he said. "And pow! You run into somebody, and you're like, 'What am I doing here? Where am I going?' I had a really hard time with that balance in my life until I met Annie, and she really helped me figure it out."
About John T. Standley
Title: CEO and chairman, Rite Aid Corp.
Education: Bachelor's degree in accounting, Pepperdine University
Who is your professional hero?: "I grew up in a family where my dad was a business person, so it started there. ... He was an accountant. When I went to college, I was all over the place. I was going to do this, do that, agriculture, pre-law. I don't know. I didn't know what I wanted to do. And he said, 'You know, the advantage of getting an accounting degree is you'll always have a job. No matter what happens, someone will always need an accountant. Someone has to add it all up and figure out what happens.'"
What's the most important thing you do every day?: "Help other people."