Case 2 - ANNE MULCAHY AT XEROX
FATS OF THE CASE
➢ Anne Mulcahy at the age of 23 she was the director of human resources, head of the Xerox
➢ She spent her first 16 years company's fledging desktop computer business, and chief in sales, then eight years in an assortment of management
of staff to Xerox's CEO.
➢ She never aspired to run Xerox nor she was groomed to be CEO. In 2001 she became the CEO of Xerox.
➢ She accepted the position when the company was in horrible financial shape. It had $17.1 billion in debt and only $154 million in cash. It was about to begin seven straight quarters of losses.
➢ Mulcahy felt a deep loyalty to the company. She felt an obligation to do everything in her power to save Xerox. Duty and loyalty compelled her to take a job that nobody else really wanted, despite the fact that she had zero preparation.
➢ She didn't know financial analysis. She had no MBA and her undergraduate degree was in English/journalism. So she asked the company's director of corporate finance to give her a cram course in Balance Sheet 101. He helped her to understand debt structure, inventory trends, and the impact of taxes and currency rates.
➢ This allowed her to see what would generate cash and how each of her decisions would affect the balance sheet. Mulcahy says now that her lack of training had its advantages. She had no preconceived notions, no time to develop bad habits.
➢ She appealed to employees with missionary zeal, in videos and in person to "save each dollar as if it were your own. In 2002, for instance, she gave all employees their birthdays an off. The gentle pressure was vintage Mulcahy: Work hard, measure the results, tell the truth, and be brutally honest.
➢ After less than two years as CEO, Mulcahy has made startling progress in turning Xerox around. Employees appreciated her truthful and straightforward style. They also liked the fact that she was willing to work...
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