Anne Mulcahy: Leading

Xerox Through the

Perfect Storm
Presented by: HRA Group 10
Saptarshi Bhattacharjee HRA010
Komal Bihany HRA013
Indrani Majumdar HRA036
D. Srinivasa Sarma HRA054
Manikya Shetty HRA057
 Case Summary
Xerox was founded on one of the most successful product launches in
history. Its revenue soared from 32 billion in 1959 to 1.1 billion in 1968, and
employment increased from 900 to 24000 people. A research scientist's
dream job was to work at Xerox.
Due to a monopoly granted by the government in 1975, the company agreed
to licence its technology to competitors in a 1975 settlement with the Trade
Commission.
In 1980, the company was on the verge of going bankrupt because it was
unprepared for price competition with competitors and unable to adapt to
decreasing margins.
Between 1984 and 1993, new CEO Kearns was able to increase the
proportion of low-end copiers from 8% to 18%, and the share of mid- and
high-end copiers from 26% to 35%, thanks to his initiatives in benchmarking,
employee involvement, and product quality.
By 1990, profits had plateaued despite market share gains. Allaire, Kean's
successor and new CEO, was able to reduce the number of sales divisions
from nine to four, eliminate 10,000 positions, upgrade technology, and exit
the insurance company.
IBM's Chief Financial Officer Richard Thoman was chosen president in
1997, and based on his experience at IBM, he is anticipated to implement a
fresh strategy and shake up Xerox's lethargic pace. When Allaire retired in
1999, he became CEO.
The stock price grew from $30 in 1997 to $60 in 1999 as a
result of a series of acquisitions and buyouts of partner
stakes.
By the year 2000, Xerox had lost contact with customers,
had lost sales contacts, and its sales team was scrambling
to find new business. Due to COO Mulcahy's action of
forewarning security analysts and investors of the
company's losses that the 'Xerox business model is
unsustainable,' rumours spread that it was going bankrupt,
affecting its financial situation. The stock price dropped
by 25%. Advisors advocated declaring bankruptcy and
paying off obligations.
Many members of senior management were leaving the
firm, while those who were loyal, had a long experience
with Xerox, and owned stock in the company stayed.
No one realised the gravity of the company's problems; in
fact, Mulcahy acquired a billion dollars without knowing
the company's financial situation; thankfully, it was a
success.
The meeting concluded that the new approach would be
based on three pillars: cash, business model change, and
future investment.
 I would accept Chairman Paul Allaire's suggestion to fire Richard
As a board member of Thoman, rehire him as CEO for a limited time, and promote Anne
Xerox, would you Mulcahy to COO and subsequently CEO. It was understandable
accept Chairman Paul why he fired Richard Thoman because he was no longer qualified
for the job. It wasn't a viable choice. There was no choice but to
Allaire’s proposal to a)
appoint Anne Mulcahy to the role because there were no other
terminate Richard
candidates.
Thoman, b) return
temporarily as CEO, Mulcahy brought three major assets to the table. First and
and c) promote Anne foremost, she had a clear vision for the organisation. Second, she
Mulcahy was an excellent communicator. Third, she was able to rapidly
learn from previous mistakes.
to COO and eventually
CEO? What strengths Mulcahy's biggest flaw was that she was completely unprepared
and weaknesses does for the job. She lacked the necessary knowledge to fulfil the
Mulcahy bring to this function of COO. She couldn't even read a balance sheet, for
position? example. She had no idea how to fix it because she had arrived at
a critical time for the organisation.
How effective has
Mulcahy been in her first
five months as chief
operating officer?
She was successful in three ways. First,
she was able to get funds for the firm in
order to handle their problems. Second,
she was able to put together a team of
individuals who were truly enthusiastic
about their job and the organisation.
Third, she was able to boost company-
wide communication.
Write key HR perspectives, you observed in this
case

Leaning and development

Motivating employees by gestures like
small gifts
Talked out issues with employees
Restructure the organization
Encourage diversity
Value based leadership
THANK
YOU !!