Xerox CEO: Staff sit-downs sparked horrible questions

Anne Mulcahy loves Xerox and she’s not afraid to admit it.

The chairman of the board and CEO of Xerox Corp., started her career with the company as a field sales representative in 1976 after receiving a B.A. in English/Journalism.

For 27 years, Mulcahy has been a part of the Xerox culture, and has seen the company weather some difficult times.

Named CEO in August 2001, and chairman in January 2002, Mulcahy was faced with holding together a company in trouble. In the past four years, 25,000 jobs have been cut at Xerox. The Securities and Exchange Commission announced it had settled a dispute over accounting policies with Xerox in April 2002. While the company claimed no wrongdoing, it paid a US$10 million fine and restated five years worth of revenue figures. With other accounting issues popping up and the overall economic slump hanging on, Mulcahy has a lot on her plate. But ever the optimist, she sees a bright future for Xerox with its recent launch of several new products and services.

She spoke with Computing Canada over lunch in New York City recently to discuss what makes a good leader and how the culture of Xerox is helping the company turn around.

Computing Canada: What do you think led to Xerox’s problems and how have you addressed them?

Anne Mulcahy: We were not focused on the market and were not responding to what was happening in the marketplace in terms of what our customers needed. We were clearly missing some of the signals that were encouraging us to change our cost model. Our margins were declining, but we were not taking the cost out. We were great planners and thinkers, and we didn’t have to do anything to repair our strategy, we just had to execute it. I think your strategy can be roughly right, but man, you’d better be good at execution, because that’s where the rubber really hits the road.

From that perspective, we had to be focused on holding people accountable — this was not an opportunity to be tolerant of poor performance. We had to be tough. Parts of the culture had to change. We focused more on what was happening in the market, were more responsive in terms of our business model, and more tough-minded in terms of where we were competitive and where we weren’t. We clearly had to change quickly, and became execution-oriented in terms of planning paralysis.

CC: How have you approached leadership in the face of such difficult times?

AM: What you see is what you get. I have had a test over the last three years, and I would say my entire team did, about the importance of leadership. I’ve learned how important it is when you’re in a crisis to give people a sense of direction that keeps them focused and engaged. I also think it’s more about a leadership team than about a leader — I don’t think individuals count as much as you’d like to think. Whenever anyone asks me about the turnaround, what really mattered was that people were aligned around a common view of where we were headed and they had confidence. That is something that is easily talked about and difficult to learn. It really does take an incredible focus on leaders that are comfortable communicating without hierarchy. We have 64,000 people today, and we had 96,000 people three years ago, so there is no room for anyone who doesn’t roll up their sleeves and work with teams.

CC: What have you learned from leading a company through a crisis?

AM: During the early days of our crisis, I visited all of the locations in Xerox’s world and did town hall-style meetings. I spent most of the time on Q&As and at that time the questions were horrible: “”Are we going out of business?”” “”Are we going bankrupt?”” Everything was very contentious, but there was something about letting the questions be asked and answered honestly that established a reason for people to be hopeful and committed to the company. If you schmooze and spin your communications it comes back to bite you in your ability to establish credibility with people.

There’s something that comes with going through what we’ve been through that creates a humility that’s very important. I truly believe that humility is an enormous part of successful leadership — not pushing your critics away allows you to address issues much earlier. We were humbled the hard way, but the fact is that we had a lot to learn, a lot of mistakes to correct, a lot of issues in rebuilding trust and credibility with all of our constituencies. There’s only one way to do it, and that’s the old fashioned way. You’ve got to roll up your sleeves, and people have to see it — you can’t just tell them what you’re going to do, you have to do it. It’s a fundamentally basic thing that builds leadership credibility.

CC: It’s been said that you are leveraging Xerox’s culture in order to help the company turn around. What does that mean?

AM: When I came into the job, there was a debate about whether an insider could change Xerox, and a lot of the advice that I received was that the culture was the problem. This didn’t make any sense to me because the culture of the company is the people: how do you get a bunch of people aligned around a set of goals if you’re telling them that they’re the issue?

I am very much a part of the culture — for 27 years I’ve been a part of the company — so it would have been difficult for me to disconnect myself. The other part is that I love it. I’ve the reason I’ve stayed at Xerox for 27 years. It’s not perfect; it needs to change and adapt, and clearly has created some issues for us, but it’s also the way out. By engaging the culture in a constructive way, you bring the really positive aspects of the culture with you, like the loyalty of the Xerox people. We didn’t have to put lots of retention bonuses out there. They wanted this company to be here and felt a sense of ownership and pride about the company that was far more powerful than anything else.

It’s not in vogue to say this, but big company cultures can and should be wonderful aspects of big business. When people come to Xerox I want them to think about staying at Xerox for their whole careers. I think if there’s going to be an advantage to being a big company, it had better be the culture, the people and the loyalty.

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