Xerox surprised the business world in 2001 by naming the first woman CEO in the company's history: Anne Mulcahy, a 24-year veteran with little hard-core executive experience. An English and journalism major, Mulcahy had spent 16 years in sales, not exactly the kind of resume Wall Street could count on to stop Xerox's free fall. Not surprisingly, the stock tanked 15% on the day of the announcement. "That was a real confidence builder," she has joked. But Mulcahy, 53, defied the Street's expectations and is widely credited for leading an extraordinary turnaround.
Having a revered brand and a well-known technology is no guarantee of survival in the brutal world of technology. Just ask Polaroid. Xerox wasn't a pretty picture either when Mulcahy took over. It was awash in $17 billion in debt, was enmeshed in an SEC scandal and had recorded five consecutive quarters of losses. Chapter 11 loomed. With characteristic candor, she warned employees of tough times ahead. To prepare herself, Mulcahy asked a colleague to give her a crash course in finance. "There wasn't a lot of time for false pride," she said.
She learned her lessons well—and aggressively restructured Xerox's debt, closed divisions and cut expenses. A year later, the company reported an operating profit. Having saved Xerox from near death, Mulcahy next faced the challenge of keeping it growing. One strategic bet, color printers, appears to be paying off, although last quarter, profit margins and earnings slipped a bit. Even an English major knows that success isn't always easy to duplicate.