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Anne Mulcahy’s Search For The “New Xerox”

18 Mar, 2001 By: Gary Peterson, Senior Analyst, Printer Group imageSource

Anne Mulcahy’s Search For The “New Xerox”

Few companies have suffered more the past nine months than Xerox – The Document Company. Executives have repeatedly announced bad news with one earnings report after another falling well below expectations. The company’s public relations department has combated a plethora of rumors involving mass lay-offs, potential buy-outs, and all out bankruptcy.

While some of the accusations are justified in light of the company’s poor earnings and previous lay-offs, a number of rumors, specifically the “Xerox to Go Bankrupt” cries from Europe were complete speculation. Whether Xerox deserves it or not, the world is eagerly anticipating the fall of The Document Company. As with any professional sport, the fans are waiting for the champion to fall from grace – and Xerox has been a winner for a long time.

The Present State At Xerox

Jim Firestone, Xerox’s Senior Vice President of Corporate Strategy, recently unveiled the company’s latest plans. Simply put, the company plans to earn more liquidity through the sale of chunks of its business, target new office markets with a reorganized sales force, and to architect the “New Xerox.” Of the three strategic goals, Xerox is well on its way on the first two. The company has sold sections of its Fuji-Xerox operations and is feverishly looking for a new partner to invest in its inkjet printer operations. The company also reorganized its famed sales force to act more like it used to. However, building the “New Xerox” will be the most daunting task facing Xerox’s Chief Operating Officer, Anne Mulcahy.

Only Ms. Mulcahy knows what the “New Xerox” is envisioned to be, but the change needs to go beyond being “New.” The required change is not a new focus, a new organizational chart, or a new plan, and most disappointingly, the change is something that Wall Street analysts cannot see from the outside. Xerox has to change itself – its culture, its habits, and the way it makes decisions.

Xerox Can Resurgence In The Future

Though not the largest company in the country at 90,000 employees, Xerox has more red tape than most government bureaucracies. Every type of decision must gain a stamp of approval by dozens of managers, supervisors, and consultants. Decisions by the majority have governed Xerox and the conglomerate of approving voices, memos, meetings, e-mails, and teleconferences has slowed Xerox to a snail’s pace.

This culture worked in the past when Xerox dominated the high-end, high-dollar copier and print production markets. Xerox was generating the revenue to support this culture because the technology was roughly 30 years old and slow to change, and the company had little to no competition. Now the world has gone digital; IT prices are plummeting, and aggressive competitors from Japan and Germany have entered the spectrum. Today, Xerox’s bogged down culture is simply too slow to keep up and react to the increasingly complex world in which it exists.

The bottom line is that Xerox still has wonderful products and services to offer customers (underline that). But Anne Mulcahy’s “New Xerox” needs to be everything that it has never been before. Employees have to be empowered to make big decisions rather than senior management making small ones. The people in the trenches who directly serve the customer need to identify and react to changes, not a committee 1,000 miles away. Xerox must tear down its own “Berlin Wall” – not to “get lean” but to start “acting lean.”

I, for one, hope that Anne Mulcahy finds the “New Xerox,” and I hope that the company achieves one of the greatest comebacks in American industry. We all should hope so. Xerox is not only an icon of American business, but the IT world owes a tremendous amount to the company. Without Xerox there would be no Graphic User Interface (you’re welcome, Microsoft), no laser printer (you’re welcome, Hewlett-Packard), no Internet technology (you’re welcome everyone), and even no computer (remember the “Alto”!).

But for all of the innovations Xerox has brought to the world, the most important and challenging one is still to come – the “New Xerox” (thank you, Anne Mulcahy).

Gary Peterson is the Senior Analyst or the Printer Group division. You can contact Gary at (858)729-5373 or email him at gpeterson@ars1.com.

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