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.