Less than a decade ago, Xerox was in serious trouble. The company whose name is synonymous with copying machines was steadily losing customers. As Japan's Ricoh, Canon and other new competitors muscled onto Xerox's turf, the company slumped from an 86% share of the world market for basic copiers in 1974 to just 16.6% by 1984. When a shaken Xerox finally studied its competitors more closely, the company discovered their secret weapon: the Japanese firms hewed to rigorous quality standards. Taking a hard-eyed look at its operations, Xerox discovered that it was slowly destroying itself with sloppiness and inefficiency at almost every level.
Xerox Chairman David Kearns took a lesson from his adversaries and in 1983 launched an all-out campaign for quality. Appealing to the firm's 100,000 workers, the company formed employee teams to encourage shop-floor innovation and cooperative problem solving. Xerox set tough new standards for every phase of its operations, from design and production to inventory management and sales. The results: manufacturing costs and product defects were cut in half, customer satisfaction increased 38%, and Xerox recaptured the lead in moderately priced copiers. Says Kearns: "At Xerox we define quality as meeting customer requirements. It's an axiom as old as business itself. Yet much of American business lost sight of that. Xerox was one of these companies. But by focusing on quality, we have turned that around."
Last week Xerox won recognition for its comeback when President Bush singled out the company's business products and systems division, which makes its copiers, as one of two winners of the 1989 Malcolm Baldrige National Quality Award. The awards, named for the Commerce Secretary who died in 1987, were , established by Congress to motivate U.S. companies. Given for the first time last year, they have already become a sought-after prize in corporate America. Collecting the other 1989 award: Milliken & Co., a leading textiles manufacturer based in Spartanburg, S.C. Bush, who has seized the quality banner to promote American competitiveness, presented the awards at the Commerce Department before 500 business and Government leaders.
Declaring that high quality in U.S. goods and services is a top national priority, the President maintained that companies like Xerox and Milliken are leading a comeback from the days when many American products were being shunned because of a well-deserved reputation for shoddiness. Said he: "No competitor gave them a tougher time than they gave themselves. Both of these manufacturing firms were well-established leaders in their markets, and yet both were being steadily squeezed out by the intensive foreign and domestic competition. And in the midst of this crisis, the men and women of these companies found within themselves the will to make a painstaking reassessment and the drive to win back their market share."