Tom's Tech Toys: Anne Mulcahey

May 11, 2004

Anne Mulcahey

Anne accomplished incredible things in the last 4 years at Xerox, reluctantly taking the helm of a failing company and turning it around spectacularly. She is also clearly level 5, not taking any credit. She did a short and heartfelt speech, then took questions from a great editor from Fortune. Notes:

From intro: she never sought CEO job, and was insane to take it.

Nothing focuses the mind like the sight of the gallows. Took job with mixed conviction and uncertainty.

Spent first days listening to custs, emps. Focused on custs to figure out what to do.

Emps need to know what they are signing up for - comms essential.

It's the customer, stupid. 5x more expensive to get a new cust vs keep old one. Keep 5% more custs and increase bottom line 25%.

Find out what custs are saying. Nothing is more important. Starts at top - she had lunch w 30 today, 2 more tomorrow, Boston on Fri. All execs visits custs. They rotate cust exec of the day, take responsibility for fixing underlying problem with any cust that calls HQ that day.

Invest. Didn't take a single dollar out of R&D. Bit the bullet and now reaping the rewards. Half revs last year from prods introd in last 2 years.

Alignment. For cost cutting, ask if customer would pay for this. 90% emps visit custs on reg basis.

Deliver value. Don't just sell stuff, make sure it has ROI. About information not technology.

Serve. Prove cust svc above and beyond. "Very satisfied" custs 6x more likely than "satisfied" to stay w Xerox. Doing six sigma work w custs to make them more satisfied.

Creation of customer value is the heart of growth. It's the customer, stupid.

Questions:
Optimism is important, but must be tempered with realism.

Brutal facts were tough, from custs, emps, and analysts, but consistent. Had to make tough decisions, eg outsourcing, but data was pretty clear.

Vast majority of her time w custs and emps, 2 major constituencies.

She faced lots of skepticism about ability of an insider to make the changes required - made her mad. Fact the culture was painted as the enemy was insulting to the emps and her, so she wanted to prove them wrong.

None of the customers had this skepticism, though. Very supportive.

She tries to make a point of not just visiting cust CEOs, but folks w day to day interaction w prods. Learn who the honest critics are, cultivate them. Can be tough.

Be "problem curious" and look for opptys to solve problems. Point of reviewing info is to find probs quickly and solve efficiently.

Since she was not classically trained as a CEO, she was plenty humble, got lots of advice. Warren Buffett, Jack Welch.

When she was starting the turnaround, had lots of town meetings, and invited people to leave unless they were not only prepared to contribute, but actually enjoy it. Neutral or checked out is worse than challenging direction. At least they're engaged.

She does do formal emp evals, but tries to give constant feedback. Emp dev and succession planning restarted in last couple years.

Custs not buying next new thing, or upgrading. Only looking at closed loop ROI.

Posted by ts at May 11, 2004 12:50 PM

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