Summary:
Ursula Burns wants to remake her firm into the company American business
can’t live without. But can Xerox succeed in a world without Xeroxing?
After eight meetings with the President of the United
States, Ursula Burns still wonders what the button is for. "These
meetings are all very choreographed, very much according to protocol,"
she says. "That usually isn't my thing, protocol." She is telling me
about her latest encounter, a hastily called meeting at the White House
this past August, during the height of the debt-ceiling debates, to
discuss methods for spurring the economy. She and seven other CEOs,
among them the heads of American Express, Johnson & Johnson, U.S.
Steel, and Wells Fargo, were placed like pegs in a tightly designed game
board, sitting in front of tent cards with their names in a formal
script, waiting for the President to arrive. At the President's place
sat a folio of notes and a small box with a red button. Burns, who had
been seated in a position of honor to Obama's right, was to be the last
to speak. As she waited, she considered whether the button could be the
executive branch equivalent of The Gong Show gong. She thought to herself: Maybe he pushes it if he doesn't like what we say.
When it was her turn, Burns recalls, the President said, "'This has
been really good, and now I'm bracing for the tough one.''' Burns smiles
at the recollection.
She is known to be tough. Burns is the first African-American woman
to lead a company the size of Xerox, coming to power in 2009 during an
economic tailspin that continues to threaten the global economy and her
company's bottom line. She is the second woman to run the iconic firm,
in a historic succession that has produced historic results: Working
closely with friend and former CEO Anne Mulcahy, Burns was part of a
small group of executives who rescued Xerox from near bankruptcy in 2001
and began moving the company away from its machine-making roots and
into a different business entirely. "The thing I valued most about
Ursula, and why I valued her participation in senior management, is that
she has the courage to tell you the truth in ugly times," says Mulcahy.
Being direct is her calling card. When Burns talked to Obama about
leadership and the practical aspects of what big business needs, it was
serious advice, respectfully offered.
She did, however, tell him that he owed her $3 billion. The
debt-ceiling crisis had played havoc with the valuations of many
American firms, including Xerox's. Had Obama seen its share price
lately? Wasn't he at least partly responsible? "What did I do?" Burns
asked him. "All I did was wake up and my share price is down!" The
remark elicited a laugh from the President, who is also, by way of the
federal government, a major Xerox customer. It was, in many ways, a
signature move. Burns, not a protocol kind of person, is always willing
to push the button herself.
"I'm a black lady from the Lower East Side of New York," Ursula Burns
says. "Not a lot intimidates me." Burns grew up in the projects on
Delancey Street, close to all the trouble that a poor kid can get into
in a city in decline. Her mother, Olga, who died in 1983, washed and
ironed clothes for money; she also knew her way around a deal--she
traded cleaning services to a neighborhood doctor in exchange for health
care for her three kids. Ursula, the middle child, says of her father,
"He wasn't in the picture." Burns describes her mother as supremely
confident and someone who expected great things from her kids. "I don't
want to overemphasize this," she says, "but not a day goes by when I
don't think about my mother and what she would think about what I just
did. I often adjust my approach."
In many respects, Burns's ascent to the top of Xerox--and the
decisions she's been willing to make to ensure the company has a
future--carries a business lesson for uncertain times. She is, by her
own admission, in love with the company that gave her a livelihood and a
31-year career. And yet she isn't the least bit nostalgic when the
conversation turns to returning Xerox to its former glories. That was
then. She has long been willing to do whatever it takes--dismantle the
company's manufacturing unit that shaped her career; cut back or
eliminate products that once defined the Xerox brand; branch out into
uncertain (and risky) new areas of business--in an effort to reposition
the company in an era of technological upheaval. What's more, unlike her
contemporaries at, say, Hewlett-Packard, Burns's career turn
demonstrates that you don't need an outsider to save the day. An insider
can do it just as well--and can bring with her an incomparable
institutional knowledge and the deep well of respect of her peers. "I
came in the wrong way," says Mulcahy of her surprise ascent to CEO. "As
difficult as it was, Ursula came in the right way."
Burns had an early aptitude for math that earned her a scholarship to
the Polytechnic Institute of New York and a degree in mechanical
engineering in 1980. She was tapped for a summer engineering internship
at Xerox, and she never fully left. The next year, she earned a master's
from Columbia that Xerox helped pay for. "I saw what was possible for
myself early," she says. During a 1989 "caucus"--a type of employee
gathering organized around work-life topics--a question was asked about
Xerox's diversity initiatives, and whether they lowered hiring
standards. Wayland Hicks, the president of marketing and customer
operations, weighed in. As he politely explained why the company did not
lower standards, Burns pricked up her ears. She thought, Why give the
question the dignity of a response? She raised her hand. "We had a
little debate about it in front of the room," she says. "Why not attack
the assertion directly?"
Hicks later coached Burns on the finer points of corporate diplomacy.
But he was impressed by her guts and intelligence. Not long after,
Hicks tapped her as his executive assistant, a job that served as a de
facto leadership-training program. "That was the first sign she was
really on the executive track," says Mulcahy. "It was a significant
signal to everyone." By 1991, her outspokenness and keen business
insights had gained the attention of then-CEO Paul Allaire, who poached
her from Hicks for a similar position in his office. By 1997, she was
the vice president for worldwide manufacturing and had led the push into
color copying. Soon, there wasn't a manufacturing job she hadn't
touched or a Xerox product she didn't understand.
Shadowing her from the sales side was Mulcahy, whom she considers a
close friend. "Our careers grew the same way from different directions,"
says Burns. "If she did it, I did it next. She was always one step
ahead of me." Both women are Xerox lifers; both married "Xerox
husbands," says Burns. (Burns's husband, Lloyd Bean, is now a retired
Xerox scientist.) As Burns puts it: "Xerox sucks you in and you become
part of each other."
Still, by the late 1990s, Mulcahy and Burns were mostly part of a
dying company. Xerox was sputtering in the face of Japanese competition.
At the same time, the digital world's ascendance over Xerox's empire of
paper, and paper copiers, seemed inevitable. A new CEO, a former IBM'er
named G. Richard Thoman, was appointed in 1999. He lasted about 13
months. By the time the board asked him to leave, the company's stock
had plummeted from a record of nearly $64 a share in May 1999 to $27 in
May 2000, and Xerox was heavily in debt. Jim Firestone, currently the
president of corporate operations, says it simply: "We broke. The
company broke." Burns is characteristically direct. "We had lost
complete faith in the leadership of the company," she says. "We didn't
have any cash and few prospects for making any." And that wasn't the
worst part. "The one thing you wanted was good and strong leaders that
were aligned and could get us through things and we didn't have that."
By 2000, Burns was ready to leave. But when Mulcahy became CEO, she
helped persuade Burns to stay. And it then fell to Burns to outsource
Xerox's manufacturing. The move was crucial to Xerox's cost-saving
efforts; if done wrong, however, it would cripple Xerox's relationship
with its customers. Burns chose the global manufacturer Flextronics, but
to complete the deal, she needed the support of the Xerox union, some
4,000 employees in a facility near Rochester. Burns recalls: "I told
them the truth, in as much detail as I could, about what was happening."
Says Mulcahy: "She literally convinced the union that it was going to
be either some jobs or no jobs. For anyone. It was survival. There was
no other way." By 2004, Xerox had returned to profitability. But the
company had dropped from 100,000 to 55,000 employees in less than four
years. What's more, the bigger issue still remained. "What we had to do
was step back and think," Burns recalls. "What is it that Xerox really
does?"
What Burns remembers most about her first day as the CEO of Xerox was
dinner the night before. Over a meal with Mulcahy, she got the news
that she had been hoping for. "We were pushing to take the company in a
direction that made a lot of sense--on paper," she says. The direction
she was referring to was the acquisition of Affiliated Computer
Services, or ACS, a company that had started as a family-owned
data-entry business in the mid-1980s and had grown into a $6 billion
services powerhouse with a foot in the door of seemingly every back
office around the world. If you paid a toll or a parking ticket, applied
for a credit card, or went to the doctor in America sometime in the
past year, chances are ACS worked your paper trail behind the scenes.
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