The Value of Leadership

In 2001, Xerox was on the brink of bankruptcy. Years of mismanagement saddled the company with billions in debt and it was fresh off a $273 million loss in 2000. The previous CEO lasted only 13 months before resigning under a cloud of accounting irregularities.

To turn its fortunes around, the company tapped an internal candidate who was unexpected, even to her. Anne Mulcahy started at Xerox in 1976 and rose through the ranks, finally being tapped to turn around the struggling company in 2001.

The company’s transformation under Mulcahy was nothing short of remarkable. From 2001 through 2006, she decreased the company’s debt load, increased profit, and increased the stock price three-fold.

Anne Mulcahy’s leadership delivered BILLIONS of dollars of enterprise value to Xerox shareholders.

How Leaders Create Value

What drove Xerox’s remarkable transition under Anne Mulcahy? She didn’t find new revenue sources; in fact, revenue declined in her first five years as CEO as she shed unprofitable business lines and restructured the organization. She didn’t develop earth shattering products; the company already had tens of thousands of patents and a robust R&D function.

To turn around Xerox’s fortunes, Mulcahy used a powerful framework: People, Problems, and Process.

She reenergized the workforce, the company’s most valuable asset, by getting the right people in the right seats, sharing her vision, and actively listening to employee concerns.

She dealt with problems head on, knowing that the company had to put issues like the debt load and accounting irregularities behind it before it could move forward.

She put processes and procedures in place to increase efficiency and productivity, so the company’s resources could be spent on growth, employee engagement, and customer success.

This framework is simple, but not easy. In value creation, consistency beats complexity every time. As Anne Mulcahy showed, the compounding effects of doing the simple things right can literally be worth billions.

You may not run a Fortune 500 company, but all organizations at all levels, regardless of size, need strong leadership to drive value creation for customers, employees, and owners. No company can afford to be without it.

Jump Start

1. Identify one people, problem, or process issue you have been putting off addressing.
2. Identify what is keeping you from fixing it.
3. Block out time on your calendar and commit to taking the next step toward solving the issue.