Anne Mulcahy – Listening and Leadership

Anne Mulcahy was born on October 21, 1952 in Rockville Centre, New York. Anne was the only daughter in her family, which included four sons. Her parents encouraged her to compete equally with her brothers. Anne believes that her upbringing taught her not only to handle criticism but to listen to it as well. Anne’s primary education was at a Catholic school. She then earned her Bachelor of Arts degree in English/Journalism from Marymount College in Tarrytown, New York in 1974. She is married to Joe Mulcahy and together they have two sons.

In 1976, Anne Mulcahy started her career at Xerox as a field sales representative. In 1992 she moved to human resources and served as vice-president of the company’s worldwide division. In human resources Anne drew upon her listening skills with her brothers to build a fiercely loyal workforce. Anne’s coworkers describe her as both compassionate and tough. Her willingness to work side by side with subordinates helped her to galvanize Xerox workers who were becoming dispirited when Xerox was struggling to sustain its business model in the swiftly changing world of technology. Anne believed in telling her coworkers “the good, the bad, and the ugly”. Her honesty with everyone in the company boosted morale and raised commitment. Anne is quoted as saying, “If you schmooze and spin your communications, it comes back to bite you in your ability to establish credibility with people.”

In 1996 Anne became vice president of customer operations worldwide. In 1998 she served as senior vice president. In 1999, president of general markets operations and in 2000, president and COO (chief operating officer). At the time, Xerox’s competitors, Ricoh and Canon, were taking big shares of the market share by being more innovative. Instead of being paralyzed by the bad news and spending all of her time trying to coddle shareholders Anne spent her early days as president on a listening tour. She believed the company had neglected to change its cost model despite obvious signs from its customers that it no longer worked. She logged 100,000 miles in trips to remote Xerox locations listening to customers. She held town-hall meetings. Her first priority was to focus on their complaints. Xerox had stopped listening, but Anne Mulcahy hadn’t. Anne Mulcahy credits her background in sales for giving her a unique perspective that saved the life of Xerox. She told her worried coworkers, “I will fly anywhere to save any customer for Xerox.”

In August 2001 Anne Mulcahy became the first woman CEO (chief executive officer) in Xerox’s history. Less than a year later she also became Xerox’s chairman of the board. After 25 years with the company Anne Mulcahy knew it intimately. But Xerox was in a financial meltdown and Anne knew she lacked financial expertise. She immediately enlisted the treasurer’s office to teach her the fine points of finance before she met with the company’s bankers. Her advisors told her to declare bankruptcy in order to clear off $18 billion in debt. She resisted, saying, “Bankruptcy is never a win.” She believed that going into bankruptcy would make it harder for Xerox to be a serious player in a high-tech future.

To gain support for her decision to avoid bankruptcy Anne Mulcahy met personally with the top 100 executives. She gave them “the good, the bad, and the ugly”. Ninety-eight of the 100 executives decided to stay. Most of them are with Xerox today. Mulcahy’s commitment to taking Xerox into new technologies led her to refuse cuts in research and development and field sales. Instead she went after Xerox’s bloated infrastructure. She sold Fuji Xerox and farmed out some manufacturing. She had to cut 28,000 jobs and billions in expenses, but in the end she saved Xerox. She has paid off the company’s debt, rebuilt its product line and technology base, and installed a new management team. Under Anne Mulcahy’s leadership Xerox stayed true to her and the company’s values.

Within a year of Anne Mulcahy assuming leadership Xerox reported an operating profit. The next challenge was to keep it growing. Mulcahy’s new vision for Xerox is to eliminate paper in the office altogether and become the company that manages digital content. She plans to expand into consulting services by helping companies manage their document flows and by setting up computer networks. Mulcahy’s advice for other companies struggling with massive problems – “Do not defend yourself against the inevitable. Face reality and get your team aligned with the new vision that will result in reinvention.” And never stop listening.

Jody Victor