Anne Mulcahy

By Edward F. Moltzen, CRN
June 25, 2007 12:00 AM ET

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Anne Mulcahy is credited with the strong leadership that brought Xerox back from near death, converting a balance sheet red with massive debt and losses into one flowing into black in 2006 with $1.2 billion in net income on $15.9 billion in revenue.

For this achievement, she is consistently named among the top echelon of corporate America's most powerful women. But Mulcahy herself says one of the accomplishments of which she's most proud is making believers in her simple but profound change of strategy at the Stamford, Conn.-based hardware company—steering it away from a go-it-alone, direct-sales strategy to a culture defined by the mantra, "Partner or perish."

That Mulcahy even took the job in the first place says a lot about her strength of character. Now in her seventh year as CEO, when Mulcahy took the reins the company's stock price was crashing, its debt was mounting and top executives were under fire by regulators for allegedly illegal accounting practices. When then-chairman Paul Allaire broke the news that Xerox's board of directors wanted the longtime sales champion to become chief executive, the promotion wasn't exactly cause for celebration.

"It was a difficult time," Mulcahy recalled. "It was under an unusual set of circumstances. Where most people would be getting congratulations, I was getting more condolences than congratulations."

Still, she took the job. Phone calls and notes poured into her office as Mulcahy hunkered down and began planning the future, seeking the input of bankers, investors, customers, partners and officials of the U.S. Securities and Exchange Commission.

One of those reaching out to Mulcahy was Warren Buffet, the billionaire "Oracle of Omaha" and chairman of Berkshire Hathaway. "Think about it like being drafted into a war," Buffet advised.

She did. That was the problem. Xerox was under siege.

So, Mulcahy fought back with honesty, open ears and more than a little humility. She held meetings with Xerox employees. She went on the road and listened to customers. She even met face-to-face with SEC regulators and hashed out a settlement that maneuvered Xerox out of a thorny accounting case.

It worked. In 2001, Xerox lost $94 million. By last year, its profit topped $1.2 billion.

"This really had to be a mission to get the company back on its feet," she said. "A lot of what those first weeks and months were were really listening to employees and customers. It was painful listening, because there were a lot of things that weren't going well."

And so, Mulcahy joins the CRN Industry Hall of Fame after seven years of making things go right.

Now 54, she still exudes a youthful energy, confidence and spirited approach. When she speaks with people, she makes eye contact, answers questions directly and doesn't hide behind staffers.

"Partner or perish" became her rallying cry several years ago, after the company made it through several straight quarters of paying down a huge debt, showing sales growth and meeting Wall Street expectations. The idea was to forge a Xerox that could work ever more closely with independent technology solution providers. This was a huge cultural change: The company grew up fueled by a sales force that sold big hardware direct to end users and a network of Xerox-exclusive agents that worked largely on margin.

"You really do learn the most obvious lesson of all, which is creating pull vs. push," Mulcahy said. "Guess what? Solution providers don't work for you. These folks have to see you as having created a positive advantage for their customers."

One by one, she's been working to win over a channel of integrators, resellers, ISVs and IT solution providers. As Xerox's sales grow, each partner who shows growth represents a victory for Xerox.

Next: Mulcahy Inducted

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