Anne Mulcahy, the saviour of the Rochester, N.Y.-based Xerox Corp. (NYSE: XRX) back in 2001, announced her retirement effective July 1 of this year.
Mulcahy (56) will remain chairman of the board of the printer maker.
Replacing Mulcahy is her long-time confidante Ursula Burns (50), who is the company’s president.
Mulcahy, a journalism graduate, joined Xerox in the mid-seventies as a sales representative. From there she slowly rose through the ranks of the company to eventually become what she called the “Reluctant CEO.”
At the time, the century old Rochester, N.Y.-based company that pioneered photocopying was starring at bankruptcy and the stock took a 15 per cent nose dive after Mulcahy was introduce as its new CEO.
Becoming CEO of Xerox, she said, was the hardest decision of her career. “I did not want to be the captain of the Titanic,” she said in a previous interview with CDN.
Her first move to save Xerox from extinction was to call Warren Buffett, the billionaire investor of Berkshire Hathaway Inc. fame. She wanted him to invest in Xerox, which at the time was facing a cash flow crisis, mounting debt, irate customers and massive staff defections. The company in 2000 lost US$273 million.
Buffett invited Mulcahy to his favourite restaurant in Nebraska where he reinforced his view of never investing in technology companies.
This was not exactly what Mulcahy wanted to hear, she said. But, Buffett did give her advice that sharpened her focus for saving the company. Buffett said: “You’ve been drafted into a war you didn’t start.
Focus on your customers and lead your people as though their lives depended on your success.”
She called this advice “sobering,” especially when Xerox’ cash reserves were at zero and the employee base was looking bail on the company.
Mulcahy had another problem she’d have to solve before implementing this customer first, technology second plan. She knew that some of the senior leaders of the firm did not have confidence in her leadership. So she quickly called a meeting of all senior Xerox leaders and said to them point blank that if any of them wanted to leave she would help. Mulcahy did this tactical move because she realized time was running out and wanted the leadership team to start focusing on the customer and buy into her plan.
“To my surprise, four people asked to leave from the leadership team.
But those who stayed became very active. They were stretched, but I did not want armchair quarterbacks criticizing my every move. We needed to work quickly,” she said.
Xerox became a pioneer in solid ink printer technology, under Mulcahy’s watch.
Today, Xerox drives two-thirds of its revenues from products introduced just few years after she became CEO. The company finally debt free in 2005
Mulcahy gave credit to the channel for Xerox’s turnaround. “I do not want to declare victory, but the signs are very positive,” she said.
Burns, will be the first ever African American women to head a Fortune 500 firm.
She joined Xerox in 1980 and previously was responsible for running parts of Xerox’s successful printer business. She also held roles in the manufacturing, supply chain, marketing and research operations. Burns was named president in April 2007 and is currently managing the company’s internal operations.
She takes over a financially stronger Xerox than when Mulcahy took the helm as CEO in 2001.
Mulcahy was praised for her role in turning Xerox around financially and for revitalizing the flagging digital imaging business with new products and services. Mulcahy was also responsible for establishing Xerox Global Services, which offers document and images services. That unit generated US$3.5 billion [B] in revenue last year. Mulcahy spent 33 years with Xerox working in various departments.
The new CEO also faces the challenge of guiding Xerox through the recession as companies hold back spending on printing equipment and supplies. Xerox last month reported revenue of $3.55 billion [B] for the first quarter of 2009, an 18 percent decline from $4.33 billion [B] in the first quarter of 2008. However, it reported a profit of $49 million [M] for the period, an improvement from losses of $244 million [M] the previous year. In October, Xerox said it would lay off 3,000 people over six months in an effort to cut costs.
