Xerox’s Comeback
Kim Luttman
Bus 390
Instructor Suzanna Chavez
National College
November 01, 2009

Abstract Big business for years has been for the most part a man’s world. While women may have been part of the organization, the power, responsibility and leadership mainly rested in the hand of men. As for Xerox a multi-million dollar business, they were no different. A company that was founded in 1906 had several men at the helm, running a top notch company. As the years passed, profits soared and held that position for some time. Xerox was a great company, yet it gradually started to lose their momentum. As the profits turned into losses, the only thing growing was their debt. Xerox stepped out of 1990’s and into the 2000’s placed Anne Mulcahy (the first woman CEO of the once multi-million dollar company Xerox) into the struggling, over extended and drowning position of CEO. Xerox was now in the hands of a very capable woman. Mulcahy now known as a very powerful player in the business world has become one of the top leaders not only in Xerox but in America. The leadership of Mulcahy turned Xerox around and restored not only to the great company it was but only better. The powerful leadership of Mulcahy has set the precedence for yet another woman to take her place in the Xerox family. Ursala Burns has taken over the CEO position where Mulcahy ended with high expectations to continue, only to propel the Company farther into the future. A company was founded in 1906 in Rochester, New York that would come to be a worldwide household name and a Fortune 500 company. The company’s original name was “Haloid Company” then changed to “Haloid Xerox” in 1958 and in 1961 the now common name of “Xerox”.(Xerox, 2009) The company had released a xerographic printer in 1955 but it was not until 1959 that they started to make their mark in the business world with the first photocopy machine called the 914. It was introduced in late 1959 and by the end of 1961; Xerox’s revenues had almost reach 60 million dollars. The company’s success prompted them to change the name to “Xerox Corporation” and was placed on the New York Stock Exchange as Xerox common stock (XRX).(Xerox, 2009) The company expanded through the 1960s and 1970s with the introduction of new machines such as: the first desktop copier, the laser printer, Sigma line 32-bit mainframe computers, and color copiers. The development and production of these machines made Xerox a multi-billion dollar business (Xerox, 2009). As the 1980’s rolled in, so did the need for more technology. The Company spent millions attempting to develop and make a personal computer but the cost was too high for the consumer/business; in actuality Xerox had made the first personal computer. By the mid 1980’s Apple bought the rights to the technology of the personal computer. Apple took that technology and in 1984 released the Apple Macintosh personal computer aimed toward business and education. Meanwhile in the1980s and the 1990s, Xerox moved ahead with advances in design, quality, technology and improvement in the products they were selling. Their focus not only turned to products but to the total service provided to their customers including supply, maintenance, configuration and user support. (Xerox, 2009) This was the start of a new image for Xerox known as “The Document Company”. This became their corporate signature, and with that in place it showed a new relationship between paper and digital worlds. Going into the 2000’s, Xerox was under scrutiny with many allegations and charges against them for accounting irregularities. The charges were made by the U.S. Securities and Exchange Commission dating back from 1997 to 2000. (Xerox, 2009) The lawsuits brought against Xerox, their senior executives, and the auditors went on for years, with the penalties and fines in the millions. Xerox was facing possible bankruptcy due to the massive amount of debt it had incurred. Xerox once a thriving business was in trouble. As with any business that has been operating for so many years, the decisions made by CEO’s are crucial, and the corporate structure needs to be solid. Xerox has had various CEO’s (See Appendix). Some have made their mark in the company, while others did not live up to the standards of Xerox. (Bianco, 2001) With the company facing financial ruins and a tarnished name in the industry, Xerox needed to do something major. On August 1, 2000, the company named Anne Mulcahy to the top spot as their CEO. Anne Mulcahy was an insider with 24 years of service in the company. Her position at Xerox began in 1976 in sales. Mulcahy was an English and Journalism major and had no financial background or executive experience. (Tsiantar, 2006). As she moved through the company, she was Vice President of Human Resources from 1992-1995, on to Chief of Staff in 1997and then on to Corporate Senior Vice President in 1998. (Xerox, 2009) When Mulcahy took over CEO of the company, Xerox was 17 million dollars in debt, and had showed losses for five consecutive quarters. Because of her lack of financial expertise, she asked for the help of a fellow colleague to give her a quick course in finance. It seemed that she had stepped into a doomed position. However with optimism, she looked at the stalled level Xerox was at; it seemed to have lost their incentive or focus to keep up with their competitors. (Bittar,2005) With that perspective in mind, Mulcahy began to steer the company in a new direction putting the emphasis on research, innovative digital technology and service.(Whitney, 2009) Mulcahy started by taking her teams to a new level, by not only focusing on operations but by putting value, pride and responsibility to the employees. The company began to take on a new attitude of “we can do it together” as opposed to “I can do it” philosophy. Mulcahy’s ideas focused on communication, shared objectives, teamwork, and a better customer service relationship. During this transition, she made many difficult decisions such as: cutting the number of employees, and removing departments that were no longer needed. She also did her best to help the laid off employees find other employment in various companies; placing 70 percent of them in new jobs. (Bittar, 2005) Mulcahy firmly believed that bankruptcy was not an option, while many advisors said it was the only option. Mulcahy replied to them “Bankruptcy is never a win”. In fact, she concluded,” using bankruptcy to escape from debt could make it much harder for Xerox to be a serious high-tech player in the future”. Instead, she chose a more difficult and risky goal, “restoring Xerox to a great company once again”. (George, 2008) Mulcahy was true to her word. She began with the top executives explaining how bad the situation had become, and asking if they were prepared for the battle; 98 out of the 100 executives supported Mulcahy’s decision. The battle began with a very rocky road the shareholders were angry, Xerox’s credit line was dwindling, credit ratings were on the way down, and the Securities and Exchange Commission was investigating the allegations of accounting irregularities.(George, 2008) Mulcahy began to take a new approach, by taking a straight shot to the Xerox customer. She believed that the customers deserved first priority. Mulcahy went right out into the field taking on customer’s complaints trying to win their loyalty back or just trying to keep it. While out in the field, she also listened to suggestions of needs and wants from the customers. Mulcahy knew from the beginning that research and development was a top priority if they were going to be in the competition with impendind companies such as: Ricoh and Cannon. The area of research and development was crucial and she never backed down on funding, though many advisors and shareholders wanted those expenses cut. She turned to alternative methods to gain money by selling parts of Fuji Xerox, and contracting out manufacturing. (George, 2008) Mulcahy fierce determination to turn Xerox around took her to many extremes. If she could have worked 24/7, she would have; in fact there were many occasions she came close. She conducted meeting after meeting with anyone that would give Xerox a chance to prove themselves. In the first 3 years of her leadership, she was able to settle the accounting scandal with the Securities and Exchange Commission, revise the credit line with several banks, cut expenses, and pull Xerox out from under their debt. She had actually show profit for the first time in many quarters. (Morris, 2003) One of the most powerful qualities of Mulcahy was that she led by example, not only working hard for the company but for its employees and customers. The culture of the company was Mulcahy and she proved it over and over again. The whole corporate structure had changed for the good and has been imbedded into the company, with value, pride and general well being for all. With the world in such economic uncertainty, Mulcahy has set a foundation for the company to withstand the turmoil and reach beyond it. The announcement of Mulcahy to retire has been the talk of many, but she feels that the new CEO Ursula Burns has been groomed for the position and will uphold the best interest of Xerox family. The appointment of Burns is yet another outstanding event not only for Xerox but for the business world. The handoff of one woman to another in a powerful leadership position shows just how much things can change for the good in a matter of a decade. Mulcahy has no doubt in her mind that Burns can do the job, and take Xerox ever farther into the future. Ursula Burns has worked hand and hand with Mulcahy since almost the beginning of her CEO life. Burns had started out in the company much like Mulcahy, as an intern in 1980, working her way up through Xerox; ending up as Senior Vice President of Corporate Strategic Services. (Morris, 2003) Burns has proved her devotion to the company over and over again, sticking with Mulcahy through the worst and rejoicing in the good successes. Burns is already taking a head on approach since taking over the CEO position in July. With one of the biggest deals in technology services to take place since the decline in the economy, Xerox has bid on Affiliated Computer Services Inc.(ACS)(Hoffmann, 2009) This cost of this deal is about 5.8 billion dollars but Burns feels strongly that this will be a giant leap for Xerox. With the market being extended to new opportunities that ACS can bring such as the government contracts and the manpower of its employees, Xerox will be one of the largest players in the technology market. The buy-out of ACS would expand Xerox ability to handle more of the customers needs and wants.(Fortt, 2009). Time will only tell if the newly appointed CEO Ursula Burns will live up to Anne Mulcahy’s legacy. Whether the buy-out of ACS was the right or wrong decision for Xerox’s future growth will be on the minds of many shareholders, executives, and employees. The true test will come when the dust settles and everything and everyone is in place. Can Xerox remain the company it has become or can it get bigger and better? Mulcahy has brought the company to new levels but will Burns raise the bar even more?

References
Bianco,A. & Moore, P. (2001, March 5) Xerox: The Downfall. BusinessWeek online, The McGraw-Hill Companies Inc. Retrieved October 21, 2009, from http://www.businessweek.com
Bittar, B. (2005, April 29). Xerox CEO Anne Mulcahy Tells of Company’s Comeback. Business News. Retrieved October 10, 2009, from http://www.zwire.com
Fortt,J.(2009 September 29). Xerox CEO Defends ACS deal. Fortune Brainstorm Tech. Retrieved October 06, 2009, from http://brainstormtech.blogs.fortune.cnn.com
Goerge, B.(2008, November 19) America’s Best Leaders: Anne Mulcahy Xerox CEO. U.S. News&World Report. Retrieved October 21, 2009, from http://www.usnews.com
Hoffmann,K.(2009, September 28). Xerox to Buy Affiliated Computer in Its Biggest Deal. Bloomberg. Retrieved October 21, 2009, from http://www.bloomberg.com
Morris, B.(2003, June 23)The Accidental CEO She was never groomed to be the Boss. but Anne Mulcahy is bringing Xerox back from the dead. Fortune Magazine. Retrieved October 28, 2009, from http://money.cnn.com/fortune
Tsiantar, D.(2006, April 30). Anne Mulcahy. Time Magizine. Retrieved October 21, 2009, from http://www.time.com
Whitney, L. (2009, May 21). Xerox CEO Anne Mulcahy to Retire. CBS Interactive Inc. Retrieved October 14, 2009, from http://news.cnet Xerox.(2009) Wikipedia the Free Encyclopedia. Retrieved September 09, 2009, from http://en.wikipedia.org

Appendix

Name Title Tenure
George C. Seager President 1906 – 1912 Gilbert E. Mosher President 1912 – 1938
Joseph R. Wilson President 1938 – 1946 Joseph C. Wilson
President
CEO 1946 – 1966
1961 – 1967 C. Peter McColough
CEO 1968 – 1982
David T. Kearns
CEO 1982 – July 31, 1990
Paul A. Allaire
CEO August 1, 1990 – April 6, 1999
G. Richard Thoman CEO April 7, 1999 – May 10, 2000
Paul A. Allaire CEO May 11, 2000 – July 31, 2001
Anne M. Mulcahy
CEO August 1, 2001 – July 1, 2009
Ursula M. Burns
CEO July 1, 2009 – present

(Xerox, 2009)