Tuesday, June 9, 2009

Xerox - Timing the Transition

This is a great opportunity for Xerox and Ursula Burns, though maybe not necessarily in that order.  Ms. Burns is certainly competent and well prepared, but given the current economic situation and imaging industry flux, there is nothing that can be taken for granted.  It remains to be seen whether she can continue the positive trajectory established for Xerox under the stewardship of Anne Mulcahy.  The succession was widely expected, but nonetheless remarkable.  Yet notwithstanding the human interest side of the story, the key point will be to deliver positive results, and the handover of the CEO job seems to be well timed to allow this.  

Xerox has put together an impressive collection of technologies and offerings across the entire spectrum of the imaging market:  desktop, departmental and centralized products and applications, from major accounts served by an established and highly competent direct sales force to small business customers served by a growing network of well supported channel partners, hardware, software, services, consulting, geographic reach, . . .  From the supply side, things look very positive. Except for the economy, this is a great company to inherit.  Yet with just limited improvement in that realm, prospects for Xerox will be looking up.

Anne Mulcahy could certainly have stayed on, but handing over now is a wise move.  The current economic situation knocks down expectations, so there is plenty of upside.  There will be a number of key management and strategic decisions coming up and Ms. Burns is ideally prepared and positioned to take these over quickly and seamlessly.  As an added advantage, the momentum of the company and (soon?) the economy will contribute to an outlook for success.

While this seems to be a good move undertaken at a good time, the only concern we need to mention is that Ms. Burns may have too much of a hardware product focus at a time when visions, strategies and service-oriented products need to be at the forefront.  She may in fact have all the necessary skills, but was not addressing these topics due to her current responsibilities and task-sharing arrangement with Ms. Mulcahy.  We will soon see whether she will grow into these new key areas quickly and effectively.


Max Rosenthal said...

What makes you say that, "Burns may have too much of a hardware product focus"? Is it because of her professional background?

Rob Sethre, CEO, Woodford Group said...

Max, her background and key responsibilities are weighted in this area. Up until now, that is a good fit, and as mentioned she may do just fine in this new and expanded role. But there is always the outside chance that a promotion requires a new skill set that cannot be met. In the unkind wording of the Peter Principle, every manager rises to his/her level of incompetence.
Keep in mind, this is not a prediction, just a consideration.