Standing Strong

Context

From the glory days of the Xerox photocopier in the 1960s and ‘70s, to the company stock price peaking in May 1999, Xerox has ridden the waves of reinvention time and again. The company has evolved from a household name in photocopying technology to a digital powerhouse, a journey punctuated by highs and lows, and even a split into two distinct entities.

In a significant chapter that saw its pivot from hardware to software, the historic leadership of Ursula Burns emerged.

Burns led Xerox as its CEO from 2009 to 2016 in a period of transition, including a major acquisition and a corporate split. In the face of radical change – notwithstanding the influence of activist investor Carl Icahn – Burns led Xerox into the digital age.

What made Ursula Burns a remarkable WarTime CEO?

Real-Life Story

Burns stepped up as CEO in 2009, amid the economic storm of the Great Recession. The financial crisis – along with the issue of delayed payments from major clients such as the US government and the auto industry – hit Xerox’s cash flow hard.

As corporate clients cut back on technology investments and tightened their belts, Xerox’s revenue slipped 14% to US$15.2bn. Despite these headwinds, Burns kept the ship steady, generating $2.2bn in operating cash and reducing debt by $1.1bn – proof of her deft operational management.

With her back against the wall, Burns turned to a series of bold strategies to guide Xerox through the crisis. Her approach centred on cost-cutting and innovation, leading to the launch of products such as the ColorQube printer. But perhaps her boldest move was spearheading the $6.4bn acquisition of Affiliated Computer Services (ACS) in 2010 in a bid to diversify Xerox’s offerings and secure new revenue streams.

The purchase of ACS, which took Xerox beyond its traditional hardware realm, was the key that unlocked the door to IT outsourcing and business process services – a clear signal of Xerox’s shift from being a hardware maker to a service-led innovator.

Transitioning from a legacy hardware business to a digital services model was no small feat. Employees steeped in Xerox’s long-standing traditions met the shift with resistance, demanding a cultural shakeup from the inside out. Burns knew the company had to move beyond its image as “just a photocopier company” to be recognised as a leader in digital solutions.

This era of hyperturnaround demanded hard choices, including workforce reductions and a leaner cost structure. But even as operational costs were trimmed, Burns prioritised investment in innovation and new technologies.

As a WarTime CEO, Burns fostered a culture of open dialogue, encouraging employees to speak freely – a strategy that kept morale buoyant and engagement high amid turbulent times.

Yet, her journey was marked not only by strategic moves but also by personal resilience. As the first Black woman CEO of a Fortune 500 company, she confronted biases, breaking glass ceilings and serving as an advocate for diversity and inclusion within the organisation.

Her tenure included a complex relationship with Carl Icahn, the ever-watchful activist investor. Icahn sought to tighten Xerox’s belt and had his own vision of what the company should become.

Under pressure, Burns ultimately led the corporate split that Icahn championed, dividing Xerox into two distinct entities and allowing each to zero in on its strengths. But even as Icahn’s sway grew, Burns stood firm, resisting calls for leadership changes, convinced that her turnaround strategy was the right one for Xerox’s long-term future.

PostScript: Burns’ legacy as CEO is a testament to her ability to guide Xerox on its transition from being a hardware stalwart to a services powerhouse. Her leadership saw the company’s historic restructuring in 2016, splitting Xerox Corporation and Conduent Incorporated into separate entities with their respective competencies. Of equal importance is how she made history as the first Black woman to helm a Fortune 500 company, breaking barriers and inspiring future generations of leaders.

Key Lessons

1) Prioritising cash flow and debt management

Strong cash flow and debt reduction are vital for stability in crises. Burns’ ability to generate substantial operating cash and pay down debt strengthened Xerox’s foundation during recessionary pressures.

2) Meeting stakeholder demand with resolve

Strategic leaders navigate investor pressures without losing sight of the company’s broader goals. Burns engaged with Carl Icahn but held firm to her turnaround strategy, ensuring Xerox’s long-term growth rather than short-term appeasement.

3) Staying the course amid pressure

True leadership requires resilience against external pressures, including activist investors. Burns maintained her strategic vision for Xerox despite demands for immediate shifts, reinforcing that long-term value often outweighs short-term concessions.

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Until next week, may the force be with you.

Kevin

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