Investment in innovation, talent will yield success in the long run, says CEO of Xerox
When handling a present-day crisis, don't forget to invest in the future, Anne Mulcahy, the chairman and chief executive officer of Xerox Corp., told a packed house April 5 at Princeton.
In a lecture titled "Leadership Lessons Learned on the Firing Line," Mulcahy shared the insights she gained as she assumed the helm of Xerox in the midst of a corporate crisis, and the practices she used to lead the remarkable turnaround of the multibillion-dollar corporation.
Mulcahy's talk was the third event in the "Leadership in a Technological World" lecture series, sponsored by Princeton's Center for Innovation in Engineering Education.
"We prepare students to lead by providing exposure to real-life leaders -- leaders who understand technology, great leaders, experienced leaders, leaders with courage and integrity," said H. Vincent Poor, dean of Princeton's School of Engineering and Applied Science. "Anne Mulcahy is recognized as this type of great leader."
When she became the head of the company in May of 2000, Mulcahy said, Xerox faced precipitously declining revenues, falling profits and debt just under $19 billion. At the same time, the faltering corporation was plagued by flagging customer and employee satisfaction.
Mulcahy said she learned quickly to be bold in her decision-making but humble about asking for help, turning to Warren Buffett, one of the most successful investors of all time, for advice.
"Business is a lot simpler than most people make it look," he reassured her.
Armed with Buffett's support, but not his investment (Buffett told her he doesn't invest in technology companies), Mulcahy took a back-to-basics approach to the company's budget and businesses -- but she never stopped investing in the future.
In the past three years, the company has brought 100 new products and technologies to the market, and 70 percent of its revenue comes from products and technologies that were introduced in the past two years, Mulcahy said. The company has met or exceeded earning expectations in 17 out of the last 18 quarters.
"If there is a line between failure and success, it is certainly about the quality of your people and the innovation they bring to the market," Mulcahy said, drawing a parallel between Xerox's corporate crisis and the national shortage in the production of great engineers and scientists.
The growing technological prowess of other countries, especially China and India, can be viewed as good news for a competitive economy, according to Mulcahy. But the failure of the United States to nurture its own technological infrastructure will cause significant problems, she said, noting that federal funding for mathematics, science and engineering has declined by one-third since 1970.
Business, government and the educational system must collaborate to counter this trend, she said, in part by making the talent base more inclusive. Mulcahy praised Princeton for its focus on diversity, innovation and education, and said she looked forward to partnerships between Xerox and the University, where her son is currently enrolled as a sophomore.
The lecture series concludes April 18 with a talk by Jeff Wilke, a senior vice president with Amazon. The series is underwritten by the William Pierson Field lectureship fund.