January 10th, 2018
Xerox case study – leadership concepts
Key Issues and Action Options
Mulcahy faces various issues that she must address to lead Xerox from the crisis it faces. Firstly, Xerox is facing multiple challenges but not even Mulcahy has the knowledge of how grave such challenges are. Mulcahy must thus evaluate the entity’s internal and external environment to identify the challenges and prioritize the actions she would take to address the challenges. To appreciate the issues she faces, she needs to interact with various stakeholders including employees, customers and creditors. Through such interactions, she would get accurate, first-hand information that will allow her to act in a timely and decisive manner. Such interaction will also acquaint her with the needs of her subordinates thus enabling her to offer appropriate rewards to motivate their performance. Lincoln’s leadership of the U.S. during the civil war supports the efficacy of such a method. By getting out to the battlefield, Lincoln was able to offer direction to his generals thus eliminating the delays that would arise if he used intermediaries (Phillips 1992). Through the hands-on approach, Lincoln was also able to experience the challenges the troops faced thus remain committed to lobby for their support in organs such as the cabinet. Similarly, by interacting with her subordinates, Mulcahy can learn the challenges facing her employees thus inform her recovery strategy based on such challenges. Through this approach, she will be able to command the respect of the employees thus receive their support in her efforts to transform Xerox.
Secondly, Mulcahy faces a challenge of developing her team of leaders to ensure that she can delegate tasks to them effectively. She needs a team to which she can delegate functions for instance to allow her deal with external pressures such as the SEC investigation that could impede the implementation of her strategy. The challenge in building this team arises from the fact that some of the leaders had lost the commitment to Xerox’s vision. Two board members had for instance resigned from their positions and some of the senior managers were contemplating leaving Xerox. Although Mulcahy has already identified individuals with whom she can work in the leadership team, she needs to keep them motivated to ensure that they enhance their efforts in meeting Xerox’s goals. She can achieve this by engaging them in forming performance measures and rewarding those who meet performance expectations. Lincoln exemplified such an approach in his leadership. He was able to persuade individuals who were his rivals to join his leadership team and made them accountable for specific aspects of his administration (Coutu 2009; Phillips 1992). Subsequently, such individuals became core allies who Lincoln could trust to carry through the goals he had for the country.
With the limited time she has to turn around Xerox’s performance, Mulcahy may be tempted to act on her opinions prematurely. For instance, with the severe lack of liquidity and the banks’ unwillingness to extend Xerox’s credit line, she might sell the entity’s assets at rates below market rates in a hurry to generate cash flows. Mulcahy has already encouraged her management team to engage each other directly but they seem not to engage her on the decisions she has made. For instance, Ursula Burns indication that they had the hardest decisions made for them (George & McLean 2005b), suggests that subordinates were not part of making such strategic decisions. Mulcahy thus needs to have individuals who are outspoken and have different leadership attributes in her team. Through such inclusion, the team will be able to evaluate alternative courses of action rather than rubberstamping the CEO’s opinions. Such an approach will prevent Mulcahy from taking actions based solely on her predisposition. By including a much tougher individual such as Stanton into his leadership team, Lincoln was for instance able to let go non-performing generals such as George McClennan (Phillips 1992; Coutu 2009). Seward was also Lincoln’s rival and he provided frequent criticism to Lincoln’s strategies thus helping improve such strategies. Mulcahy can thus improve her courses of action by associating with individuals who will challenge her ideas.
Mulcahy also faces an issue of balancing between cash flow limitations and enhancing employee outcomes. She needs to streamline business operations to achieve cost savings. This could result into the entity laying off some of its employees. Yet, she needs to boost employee morale by ensuring job security for key talent. Additionally, she needs to balance the tradeoff between reducing investment in research and development to save cash, and developing talent for the entity to remain competitive. In the short-term, Mulcahy needs to reduce investment in Research and development; this will avoid Xerox entering into bankruptcy thus losing out even the employees they would have retained. In effecting such reductions, Mulcahy needs to communicate to the employees of the need for such actions and build the hope for a better future. By communicating her plans effectively to the employees, Mulcahy will be able to inspire their commitment. She also needs to appreciate efforts that employees make in achieving the organization’s goals. Since the organization faces a liquidity challenge, Mulcahy needs to evaluate non-financial incentives that she can use to reward employees effort. Through her interactions with employees at informal settings, Mulcahy can learn of such other preferences that she can use to motivate the employees. A leader thus needs to explain the circumstances facing the organization and act in compassion to employees who the company has let go to survive. Lincoln, for instance, was compassionate even to generals who did not perform as he expected, finding them alternative positions to help them develop their skills (Phillips 1992). To motivate his generals, Lincoln often sent letters to commend the generals for their success. Such letters motivated the generals to remain committed to defeating Lee’s army.
Mulcahy will also need to be persistent in communicating her strategy to overcome challenges the entity is facing. Initial results following the implementation of her strategy have not been favorable. She needs to reinforce her commitment to achieving the goals she set out for Xerox. By expressing her commitment, Mulcahy will be able to inspire her subordinates who could be discouraged by a perception that their efforts have not been successful. Mulcahy needs to adapt her communication to such internal audiences to avoid creating a perception that the entity is incapable of turning around its fortunes. Lincoln’s persistence was one of the characteristic that enabled him to defeat Lee’s army. Despite receiving setbacks in multiple times when Lee’s army defeated his troops, Lincoln never lost the commitment to regain unity among the states. For instance, he assumed responsibility for his troops defeat and encouraged them to continue the fight for a united nation. He constantly reminded them that the union represented the freedoms to humanity that formed the foundation for the country’s existence (Phillips 1992). By communicating the entity’s vision constantly, Mulcahy will be able to inspire her team to remain focused despite setbacks they may face in meeting the goals they set out to achieve.
In the long-term, Mulcahy will need to build the capacity of the organization to adapt to change. Previous leadership changes in the entity have shown weaknesses in Xerox’s preparation for change. To build such capacity, Mulcahy needs to start with small-steps. She needs to prepare subordinates for leadership positions by incrementally delegating responsibility to such subordinates. Such an approach will help Mulcahy to establish entrepreneurial leadership throughout the organization. Subsequently, entrepreneurial leadership will create the capability for Xerox to develop innovative products that will allow it to remain competitive in a dynamic environment. Lincoln’s preparation of leaders in his government is evident in the processes of replacing his generals. Whenever Lincoln needed to prepare a general who would lead the next phase of his strategy, he would give the prospective candidate additional accountability. Eventually, this approach enabled him to get a general, Ulysses Grant, who was able to achieve the goal of defeating Lee thus allowing for the confederate states to get back to the union.
Coutu, D 2009, ‘Leadership lessons from Abraham Lincoln: a conversation with historian Doris Kearns Goodwin’, Harvard Business Review, April 2009.
George, B & McLean AN 2005a, ‘Anne Mulcahy: leading Xerox through the perfect storm (A)’, Harvard Business School. Case 9-405-050.
George, B & McLean AN 2005b, ‘Anne Mulcahy: leading Xerox through the perfect storm (B)’, Harvard Business School. Case 9-405-065.
Mulcahy, A 2010, ‘How I did it: Xerox’s former CEO on why succession shouldn’t be a horse race’, Harvard Business Review, October 2010.
Phillips, DT 1992, Lincoln on leadership: executive strategies for tough times, Warner Books, New York.