Lesson’s from Xerox’s Turnaround CEO

This summer, Anne M. Mulcahy retires as CEO of Xerox Corporation, after turning what looked like a moribund company into a success story. When she took over in 2001, the company had almost $19 billion in debt, revenues were in a double-digit freefall, and the stock was taking a beating. She turned things around quickly, with earnings reaching $978 million on $15.7 billion in revenue in 2005, and core debt eliminated by 2006.xerox-annemulcahy_2008-12-02podium2

One of the most important reasons for her turnaround success was her ability to inspire two absolutely critical audiences – Xerox customers and employees. Both were alienated –to say the least– when she took over.

MIT has a fascinating video of Mulcahy sharing the lessons of the Xerox turnaround (part of the Dean’s Innovative Leader Series at MIT). It’s well worth a look.

In her talk, Mulcahy links just about everything to her focus on customers and employees. She started by actively listening to what they had to say, looked hard for critical feedback, and acted on what she learned.

She stressed that even in the midst of a crisis , a CEO must articulate a vision for the company, one that goes beyond just coping with that day’s crisis. Employees must feel that the company is worth saving. She says, “When people ask me how this company made so much progress so quickly.. .The reality is: it was the alignment of the people around a common set of goals.”

Mulcahy will be succeeded by Ursula Burns, who will make history as the first female African American CEO of a Fortune 150 company. As  Robert Bruner, dean of the University of Virginia’s Darden School of Business, says, “Ursula has very big shoes to fill.”

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