S4E12. Change: The Xerox Management Story

There are only a few things in life that we are confident of — death, taxes, and change. Do you look at change as an opportunity or something you would rather not experience? Do you expect that the new system installation will go smoothly or that there will be several bumps in the road? How many times have you had to change during this pandemic? As a leader, how do you manage change?

Change comes at us in two ways – designed or imposed. Designed change is when we know that change is going to happen. Imposed change is when we have no say in it. But did you know that when change occurs, it can be both designed and imposed? The perspectives of the creator of the change and the receiver of the change are very different. When you have top-down decision-making from the C-Suite, their view is that they have designed this change for the good of the organization. 

For example, the C-Suite team has decided to restructure the organization because of poor performance and significant market share loss. When leadership announces restructuring to the organization, the rest of the organization has no prior knowledge because executives did not consult them. This is both imposed and planned change. 

But imposed change pushes down on the organization and leads to employees feeling stress, anxiety, and fear. This kind of imposition can have a tangible negative effect and does not create a highly productive workforce.

Have you ever heard of Xerox? Yes, Xerox. In 2000, The CEO, Richard Thomas, resigned from a position held for less than one year. During Thomas’s tenure, he had restructured the sales organization unsuccessfully, and the company was losing market share to its competitors. 

In 2001, Anne Mulcahy stepped in as CEO, tasked with turning the organization around quickly. Ms. Mulcahy worked for Xerox for 24 years, and for 16 of those years, she was in sales. When Thomas resigned, she rose to president, then Chief Operating Officer, then CEO. 

According to the article titled “Anne Mulcahy: The Keys to Turnaround at Xerox” from 

Insights by Stanford Graduate School of Business, she was inheriting “a company on the verge of Chapter 11 bankruptcy.” The company had over $17 billion in debt and had recorded losses in each of the preceding six years. A recent reorganization of the company’s sales force had not gone according to plan. Customers were unhappy, and the economy had started to falter. On top of that, Xerox was in a protracted investigation by the Securities and Exchange Commission. Mulcahy was under a lot of pressure from the board to turn this company around quickly.

However, Mulcahy viewed her position as the Chief Communications Officer and emphasized listening to customers and employees. “When I became CEO, I spent the first 90 days on planes traveling to various offices and listening to anyone who had a perspective on what was wrong with the company. I think if you spend as much time listening as talking, that’s time well spent.”

Mulcahy believes that effective communication consists of honesty and confidence, especially during a corporate crisis. She states, “When your organization is struggling, you have to give people the sense that you know what’s happening and that you have a strategy to fix it. Beyond that, you have to tell people what they can do to help.” She gave people a choice: you can get to work and fix the problem or leave the company. It’s that simple. 

An employee asked Mulcahy to describe what Xerox would look like when she restored it under her plan. Most CEOs would have crafted a new vision statement for the new Xerox. Not mulcahy. She created a fictitious Wall Street Journal article describing Xerox in the year 2005. “We outlined the things we hoped to accomplish as though we had already achieved them,” said Mulcahy. “We included performance metrics — even quotes from Wall Street analysts. It was really our vision of what we wanted the company to become.”

When the plan was developed and rolled out, Mulcahy spent a lot of time soliciting feedback from and communicating with stakeholders on the turnaround. This was her way of getting buy-in — she told her stakeholders that this what you shared with me, and here is how your feedback will change our company’s path. This is effective, 360-degree communication. 

Sharing her story with the students and faculty at the Stanford University Graduate School of business, one student asked her what keeps her up at night. She replied, “I think I am more motivated by fear of failure than a desire to succeed. My experience at Xerox has taught me that crisis is a very powerful motivator. It forces you to make choices that you probably wouldn’t have made otherwise. It intensifies your focus, your competitiveness, your relentless desire to attain best-in-class status. I want to do everything I can to make sure that we don’t lose that now that we’re back on track.”

The purpose of sharing this story is that this is an excellent example of improv leadership. Improv leadership consists of the following principles — respect, trust, support, listen, focus, adapt, and the philosophy of ‘Yes, And.’ 

Mulcahy demonstrated improv leadership initially when she instituted her 90-day listening tour. As she stated earlier, “listening to anyone who had a perspective on what was wrong with the company. I think if you spend as much time listening as talking, that’s time well spent.” By asking the questions, listening to different perspectives, not getting defensive, and being focused and present in each conversation, something magical happened. The respect and trust for Mulcahy from those interviewed exponentially grew. When you listen to understand a conversation, park your ego and agenda, and focus on the other person’s thoughts and ideas without interrupting, you get respect and trust in return. She wasn’t telling them her idea on how she was going to fix the problem. She wanted to know their thoughts, and by doing so, she empowered them. 

When was the last time you actually listened to understand when you were soliciting thoughts and ideas from another person? When you do this, you are gathering bits and pieces of critical information to solve the problem at hand. Too many C-Suite leaders are afraid to solicit thoughts and ideas from others in the organization because of the myth that you need to have all the answers and solve all the problems. I have always said, “the collective knowledge outside of your office far exceeds the collective knowledge inside your office.” Collaborating with others and working as a group solves problems. 

When you collaborate, you are, in essence, co-creating with the team and/or the organization. By doing so, you have adopted the ‘Yes, And’ principle and will keep conversations moving forward positively, all the while adapting to what’s thrown at you and the team. Your role as a leader in the organization is to continually develop the people, their talent and potential, and their ability to adapt to change. This is empowerment. This is effective communication. This is thriving amidst change and rising to even more tremendous success and achievement. This is Leadership In HyperDrive — Powered by Improv.