All Segments
Former CEO Mulcahy on Turning Xerox Around
32 segments available
Recorded: December 2004 Related Article: http://goo.gl/cY9FP Addressing a packed auditorium as part of the 2004-05 View from the Top speaker series, then chairwoman and chief executive officer of Xerox Corporation Anne Mulcahy described the strategy behind the company's return to profitability, or—as it was dubbed by Money magazine—"the great turnaround story of the post-crash era." Mulcahy candidly admitted that she had never planned on becoming the CEO, let alone one who was expected to reverse the company's fortunes after a sustained period of underperformance. Although she had been at Xerox for 24 years when she was appointed to the role, she had spent 16 of those years in sales, and much of her remaining tenure as the head of human resources and the chief of staff for former CEO Paul Allaire.
Segments Timeline
The Importance of Partnerships
Anne Mulcahy opens her talk at Stanford, emphasizing the positive relationship between Xerox and the university. She outlines her agenda to discuss Xerox's past, the lessons learned, leadership during crises, and her daily responsibilities, setting the stage for her narrative on the company's turnaround.
"it really is a pleasure to be here at Stanford it's a partnership that uh zerox has felt uh very positive about over the years and uh particularly I have to say between the university and our Palo Alt..."
The Perfect Storm of Challenges
Mulcahy recounts the rapid decline of Xerox's fortunes in late 1999 and 2000, highlighting the internal and external challenges faced by the company. She describes the massive reorganization, stiff competition, and the discovery of accounting improprieties that led to a significant SEC investigation, coining it 'The Perfect Storm.'
"and as Bob mentioned um in 1998 in early 1999 Xerox seemed to be doing very very well market shares were improving um our stock had risen and quite frankly was outpacing the market by a wide margin at..."
Facing the Crisis Head-On
As she became president and COO, Mulcahy reflects on the daunting responsibilities she faced amidst declining revenues and profits. She emphasizes the importance of having a dedicated customer base and a committed workforce willing to help turn the company around, setting the foundation for her strategic approach.
"billion of debt $150 million of cash and I could not find the $150 million of cash it was scattered around the globe and uh so customers were not happy we had employees who were defecting who certainl..."
Strategic Actions for Recovery
Mulcahy outlines the bold plan implemented to address Xerox's liquidity issues, restructure costs, and strengthen the core business. She discusses the significant actions taken, including raising cash, cutting costs, and focusing on operational cash generation, which were crucial for the company's recovery.
"and so we really did roll up our sleeves and begin the hard work of uh addressing all these issues and I'd have to say in the beginning um most of that time was spent listening to employees to custome..."
Financial Turnaround Success
Highlighting the financial turnaround, Mulcahy shares how Xerox improved its cash position and reduced debt significantly. She reflects on the challenges faced during the SEC investigation and the importance of maintaining a strong cash strategy, which ultimately led to a more stable financial footing.
"so the results really have been um fairly stunning based upon the challenges that we had um on the liquidity front um you know we really raised about2 and a half billion dollars of cash quickly but we..."
Innovation Amidst Restructuring
Despite the restructuring, Mulcahy emphasizes that Xerox continued to invest in research and development. She celebrates the company's recent product launches and innovative offerings, showcasing how maintaining a focus on R&D contributed to the overall success of the turnaround.
"financial staff and we had no CFO in the company so I was acting CFO and um had to manage through the SEC investigation but um when I finally hired a CFO after we had resolved the investigation and I ..."
Lessons Learned from the Turnaround
Mulcahy reflects on the lessons learned throughout the turnaround process, emphasizing the importance of understanding core issues rather than just addressing symptoms. She highlights the significance of communication and transparency during crises, which helped align employees around common objectives.
"customers are voting with their checkbooks so this is just to give you a perspective on uh where we've been I I think it would be fair to say that a few years ago people were writing our obituary and ..."
The Power of Alignment in Crisis
In her concluding thoughts, Mulcahy discusses the critical role of aligning people around shared goals during a crisis. She stresses that while having a good strategy is important, the true advantage lies in the collective effort of employees working towards a common objective, which was vital for Xerox's turnaround.
"and that's what I'd like to um turn to now and as we reflected on it there really 10 areas that are basic um certainly nothing uh terribly brilliant but they seem to get lost in the shuffle when you u..."
Implementing Lean Six Sigma for Efficiency
Mulcahy explains the adoption of Lean Six Sigma at Xerox as a means to enhance productivity and efficiency. She describes how this methodology combines speed and simplicity with rigorous discipline, enabling the company to tackle long-standing issues effectively. This segment underscores the value of structured processes in achieving operational excellence.
"disadvantage the third um lesson that I learned was about crisis being a uh a powerful motivator it enables you to do things that obviously you should have been doing all along and um I think that uh ..."
Back to Basics: Restoring Discipline
In this segment, Mulcahy advocates for returning to fundamental business practices to restore Xerox's operational discipline. She stresses the importance of managing inventory, gross margins, and capital effectively, noting how quickly these processes can deteriorate. This approach emphasizes the necessity of foundational management to achieve predictable results.
"and we'll double that next year so we are um we have an army of uh trained resources throughout our company I'm a green belt and uh I have to say that it's been an enormous help in maintaining the int..."
Trusting Instincts in Decision-Making
Mulcahy shares insights on the importance of balancing data-driven decisions with instinctual management experience. She recounts her experiences of restructuring Xerox's organization to foster accountability, illustrating how clear accountability can drive operational progress. This segment highlights the significance of intuition in leadership amidst data.
"run a business to deliver predictable results fifth is um an interesting one because I I kind of call it following your in instincts and we are an incredibly data driven and process driven company but..."
Adapting Corporate Culture for Success
In this segment, Mulcahy discusses the role of corporate culture in Xerox's turnaround. She argues against the notion of discarding culture, emphasizing the need to adapt and build upon existing strengths. This perspective showcases how a positive corporate culture can be a powerful asset in driving organizational change.
"progress the six is about cult corporate culture and it's kind of gotten a bad wrap um lately as a matter of fact when I was making my initial rounds I was visiting a big customer and a new CEO um for..."
Customer Focus: The Heart of Business
Mulcahy emphasizes the importance of maintaining a customer-centric approach during Xerox's turnaround. She describes how the executive team took personal responsibility for key client relationships, ensuring that customer needs were prioritized. This segment illustrates the critical role of customer engagement in achieving business success.
"path for the future as well seventh has to do with focusing on uh on customers never forgetting the reason custo that that companies exist but when Bankers are calling and shareholders are knocking on..."
Crafting a Vision for the Future
In this segment, Mulcahy reflects on the necessity of articulating a clear vision for Xerox's future during the turnaround. She shares an innovative approach of creating a fictitious Wall Street Journal article to express the company's goals and strategies, which rallied employees around a shared vision. This highlights the power of storytelling in leadership.
"helpful eth is um something I call the vision thing and um I guess the the best parallel is is that even when Rome was burning people wanted to know what the city of the future would look like and I h..."
The Importance of Honest Feedback
Mulcahy discusses the need for leaders to cultivate sources of honest critique within their organizations. She stresses that as leaders rise in rank, they must actively seek out honest feedback to address issues before they escalate into crises. This segment underscores the value of transparency and open communication in effective leadership.
"it at the time it was just an extraordinary thing so um ninth is about good critics um I like to think about myself as being open and approachable but um I have to say that um this is an area where wh..."
Finding Joy in Work
In the final segment, Mulcahy highlights the importance of maintaining a sense of humor and perspective in the workplace. She emphasizes that enjoying work and fostering positive relationships among colleagues contribute to a satisfying work experience. This closing thought reinforces the idea that a positive work environment is essential for organizational success.
"become crises so it's it's truly a gift last thing and uh we'll talk then a little bit about leadership but um it's about sense of humor and perspective and um you know not to forget that part of what..."
The Impact of Leadership
Mulcahy discusses the profound effects of leadership on an organization, noting that poor leadership can cause significant damage quickly, while effective leadership builds lasting success over time. She reflects on her own experiences and the lessons learned about the qualities that define great leaders.
"everybody so when I talk about leadership I um I'd like to just say I think everybody has read so much about leadership and certainly I'd been in lots and lots of roles um where I led teams and um you..."
Lessons from Great Companies
Drawing from a research project on successful companies, Mulcahy reveals that the most effective leaders often remain unknown yet possess a unique blend of humility and strong will. She emphasizes the importance of focusing on team success rather than personal accolades.
"great and it was about companies that had um extraordinary results over a long period of time and of course then a a research project to analyze what were the common set of attributes for these really..."
A Day in the Life of a CEO
Mulcahy provides insight into her typical day as CEO, highlighting the variety of meetings and engagements with customers and partners. She underscores the importance of being present and engaged with both employees and clients to drive Xerox's success.
"um but one that may have eluded us particularly During the period of the 90s so um last but not least was uh how do I spend a day and I'm glad to say that there is um no such thing as a typical day an..."
The Role of Communication in Leadership
In this segment, Mulcahy reflects on the critical role of communication in her leadership style. She suggests that her title could be 'Chief Communications Officer' due to the emphasis she places on listening and engaging with stakeholders to stay connected to the market.
"experience was and then I flew out here to San Jose um all day um yesterday we met with our Fuji zerox colleagues we have a equity partnership with Fuji zerox it's how we distribute um in Asia Pacific..."
Work Ethic and Time Management
Mulcahy shares her intense work ethic, shaped by her experiences as a working mother. She discusses the importance of maximizing productivity within set boundaries and the balance between work and personal life, emphasizing the need for space to maintain perspective.
"core of what I do is meet with customers and Xerox people um the most important constituencies so um so that's probably pretty typical so um my last message is by the way that um if you uh believe in ..."
Navigating Career Choices Without an MBA
Reflecting on her career path, Mulcahy discusses her decision not to pursue an MBA and how she compensated for this through on-the-job learning. She shares insights on the challenges and trade-offs she faced while balancing her career ambitions with family responsibilities.
"um I guess I begin with um I'm I'm a pretty intense worker in the sense that um I I I don't like any idle time so I'm I'm generally um try to get a lot accomplished in a short period of time I actuall..."
Balancing Family and Career
Mulcahy candidly discusses the dynamics of balancing her career with family life. She highlights the importance of mutual support and clear choices made with her husband to ensure both their careers and parenting responsibilities were prioritized, showcasing the complexities of dual-career households.
"I think back in a place where you know there's a little bit more balance but you have to make it no one gives it to you and I've always been pretty tough on creating boundaries about my workday and it..."
Addressing Employee Morale During Layoffs
Mulcahy candidly shares her experience managing employee morale during significant layoffs at Xerox. She explains the strategies employed to communicate transparently with employees, emphasizing the importance of face-to-face interactions and honesty during tough times. This segment highlights the emotional toll of layoffs and the necessity of maintaining trust within the organization.
"work because we made an equal kind of sacrifice and in terms of you know our free time and what we spent it on and um there was for us and it's not for everybody there was no particular resentment abo..."
Navigating Crisis and Building Trust
In this segment, Mulcahy discusses the challenges of leading Xerox through a financial crisis, including the pressure of negotiating with banks and the emotional burden of job security for employees. She reflects on the loneliness of leadership during tough times and the importance of fostering a culture of trust and engagement among her team.
"been about is um is really the kind of adaptability and sustainability that a big company needs so that you don't go through that kind of um you know wretching disruption that huge restructuring is ca..."
The Importance of a Committed Leadership Team
Mulcahy talks about the leadership team she assembled during Xerox's turnaround, emphasizing the need for commitment and shared vision. She shares her approach to ensuring team members were fully on board and the satisfaction derived from their collective achievements in restoring the company's stability and reputation.
"company that's for sure in the back can you talk a little bit about about the leadership team you assembled and then to put together to deal with the crisis and um if you could U maybe focus on whethe..."
Facing Doubts and Maintaining Optimism
In this reflective segment, Mulcahy discusses moments of doubt during Xerox's turnaround and how her lack of traditional CEO training may have contributed to her optimism. She shares the challenges of maintaining morale and motivation among employees while facing the reality of the company's precarious situation, illustrating the emotional complexities of leadership.
"place here U was there a point of time in that turn around when you thought that we're going to we we weren't going to make it like we're going to fail and if you went through that situation how you s..."
Seeking Honest Feedback
Mulcahy emphasizes the value of honest feedback from employees and customers as critical sources of insight during Xerox's turnaround. She discusses the importance of addressing customer concerns directly and how internal communication can foster a culture of openness, ultimately leading to better decision-making and organizational resilience.
"things that had to be done and um you know I but you know I think it's the first time in my life that I wasn't in a job with lots of peers people that I could kind of talk to and hang out with and uh ..."
The Value of Longevity
Mulcahy shares how her long tenure at Xerox contributed to her ability to lead the company through its turnaround. She reflects on the emotional connections and loyalty she built over the years, and how this familiarity with the company culture was crucial in navigating the challenges of leadership during a crisis.
"the frustrations and the issues firsthand I think with the marketplace is really important um inside the company it's actually actually easier than you would think um there's constituencies that are v..."
Navigating Crisis with Internal Knowledge
In this segment, Mulcahy addresses the skepticism surrounding her appointment as CEO during a crisis. She explains how her deep understanding of Xerox's culture and operations provided her with a unique advantage in leading the company through difficult times, contrasting the common belief that external turnaround experts are necessary.
"lot of um the effort that we put in um at the time it was um very very uh it was not well accepted in the market if you read the the headlines on May of 2000 it would have actually been very very nega..."
The Fear of Failure
Mulcahy discusses her intrinsic motivation driven by the fear of failure rather than the pursuit of success. She expresses concern about complacency within the company and emphasizes the need for sustained intensity and passion to avoid falling back into the patterns that led to Xerox's previous struggles.
"a good thing but I have this goal and I know that um um it used to be and it maybe well it it's in Vogue to say you know you kind of have to build this portfolio of experiences to you know really deve..."
Cultural Transformation for Success
In this segment, Mulcahy shares her insights on the importance of cultural change within organizations. She advises leaders to identify and leverage the strengths of their company culture as a guiding principle during times of change, fostering a sense of pride and ownership among employees to ensure successful transformation.
"place and having a level of intensity it's a different goal okay we're about growth and greatness now and not just about survival but you need I think that same level of intensity and passion um going..."