0:00

Are you earning and investing in the stock

0:02

market? In real estate? How

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about in relationships? Are you

0:06

earning and investing in your life? I'm

0:09

Doc G, semi-retired hospice physician and host of

0:12

the Earn and Invest podcast where we have

0:14

the 201 or next

0:16

level conversations about money and life.

0:18

Not only how you make money and grow it,

0:21

but also how you use your wealth to create

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a better and more fulfilling existence. Join

0:25

us every Monday and Thursday wherever you listen

0:27

to fine podcasts. For many

0:30

of my younger Harvard Business School students,

0:32

it's hard to imagine there was a

0:34

time when office workers and professors used

0:37

typewriters to crank out words on paper.

0:41

All that making a copy of something

0:43

was more complicated than snapping a PDF

0:45

on your phone. But

0:47

back in the latter half of

0:49

the 20th century, an American company

0:51

named Xerox was synonymous with making

0:53

and copying documents. Here's

0:55

a TV ad from the 1970s. Imagine

1:19

that, two pages a second. Just

1:22

a few decades ago, Xerox copy machines

1:24

were so pervasive that people used the

1:26

company's name as a verb. We'd

1:29

say, hey, can you please Xerox the syllabus for

1:31

me? And for many

1:33

years, Xerox was such a powerhouse

1:35

company that it seemed unstoppable. By

1:38

1970, Xerox commanded an astounding

1:40

95% share

1:42

of the plain paper copy and market.

1:45

Its gross margins on some products stopped 70%.

1:49

Meanwhile, Xerox's legendary research arm

1:51

developed a range of technological

1:54

innovations like the laser printer

1:56

and the computer mouse. these,

2:00

the mighty Xerox profit machine

2:02

got terribly jammed up and

2:05

my guest this time was called on to

2:07

fix it. Hi

2:25

everyone, welcome to Deep Purpose, a

2:28

podcast about courage and commitment in turbulent

2:30

times. I am Ranjay Gulati,

2:32

a professor of business administration at the Harvard

2:34

Business School. Ann Mulcahy

2:37

was a long-serving Xerox executive when she

2:39

was tapped for the daunting task of

2:41

saving the company. Once

2:44

loyal customers were flee to

2:46

other brands, profits were plummeting

2:48

and the federal government was

2:50

investigating alleged accounting irregularities. Ann

2:52

Mulcahy had worked at Xerox for decades, in

2:55

fact most of her career and

2:57

when she took the reins piloting Xerox

2:59

was hardly a dream job. Powerful

3:02

outside investors were pressuring her to

3:04

take Xerox into bankruptcy. And

3:07

just a note for listeners, the quality

3:09

of Ann's recording had some technical difficulties

3:11

in it but should still be

3:14

completely listenable. I

3:16

think probably the biggest problem was we kind

3:18

of lost our way from a market perspective

3:20

so we were no longer producing

3:23

competitive technology, we were

3:25

overpriced, we were not

3:27

customer focused. So market

3:30

share was eroding rapidly. It

3:33

didn't show rapidly though because we were an

3:35

annuity business so it kind of covers your

3:37

sins for quite a time. Well

3:40

the second issue was a huge balance

3:42

sheet issue. It was a time when

3:44

people were really focused on growth and

3:46

not really focused on balance sheet. We

3:49

had amassed 18 billion dollars

3:52

in debt and

3:54

were generating negative cash flow so it

3:56

was certainly a time when...

4:00

the financial aspects of the company were

4:02

really in trouble. And

4:04

then the third area was we were in

4:07

the midst of a SEC investigation

4:10

for accounting and regularity. So, people

4:12

certainly were betting on the fact that

4:14

we would file for bankruptcy. And

4:18

that was pretty much the situation

4:20

that evolved pretty much during my first 12

4:22

months as CEO. Wow. And

4:25

so this is like really trial by fire. And

4:27

you come into the job. You don't have a

4:29

finance background. I do not. You don't

4:31

have a CFO. You have an

4:33

auditing firm that is about to be let go. Right.

4:36

Right. You're going to

4:38

have to restate earnings. And you make a judgment

4:40

call. First of all, you bring your team together and you

4:43

let a couple of senior leaders go.

4:47

And then you say you're not going to plan for

4:49

bankruptcy even. You're not even going to like start

4:51

a little task force to contemplate that.

4:54

Tell us about those two decisions. You

4:57

really have to be focused. You have

4:59

to be very determined

5:01

and very focused. Letting

5:04

a couple of leaders go was really

5:06

instinctual for me because they

5:08

didn't believe. They weren't ready to

5:11

support me or Xerox. They

5:14

had aspired to the job themselves and also

5:16

I think were pretty cynical about the future

5:18

of the company. So it was

5:21

clear to me that those are

5:23

the kind of people that I'd be looking

5:25

over my shoulder all the time and I

5:27

needed to look forward and stay focused. So

5:29

I needed people who

5:31

really believed that it was possible and wanted

5:33

to be part of a team that did something important.

5:36

So I think I figured

5:39

out that warm bodies were not

5:41

better than nobodies and decided to

5:43

kind of make sure that the people

5:45

that were in place were committed and

5:48

loyal. And that was

5:50

huge. What turned out to be probably

5:52

one of the better decisions that I

5:54

made was getting the

5:57

right people in place and making sure that that

5:59

team... was aligned with what we

6:01

needed to accomplish. Yeah, members

6:03

of the financial team were forced to leave

6:05

because of the SEC investigation. So it

6:07

was not a great recruiting time for

6:09

a CFO based upon that. So, you know,

6:11

we had to kind of go it without a

6:14

CFO for a period of time. But I have

6:16

to tell you, I rallied our financial

6:18

resources around the world. We literally met every

6:20

morning at 7 a.m. on

6:23

a conference call to talk about the business,

6:26

to get a status on the restating of

6:29

financials that was going to be required. Because

6:31

we fired our accountants because I had no

6:33

choice. Our accountants refused to acknowledge that the

6:35

accounting was flawed. And the SEC would

6:37

not allow us to file financials until

6:40

we acknowledged the accounting was flawed. So

6:42

the only way I could make it through

6:45

and not file for bankruptcy was to fire

6:47

the accountants, bring on a new set of

6:49

accountants, restate the financials,

6:52

and basically be able to file

6:54

financials again. So it really wasn't

6:57

a choice. It had to be done. But

7:00

I think, you know, despite the fact that

7:02

it was a serious set of issues for sure,

7:04

there were a lot

7:07

of assets in the company. I mean,

7:09

this was a company that had tremendous

7:11

loyalty, a ton of

7:13

great engineering talent that hadn't been

7:15

led appropriately in a long time.

7:18

It had one of the best sales

7:20

organizations in the world with nothing to sell.

7:23

So we had assets. We

7:25

clearly had strengths that could

7:27

be leveraged to drive better

7:29

results. So I did

7:32

believe that it was possible. It

7:34

was clearly a bit bold

7:36

to not prepare for bankruptcy. And

7:38

I'm not sure that would be something

7:41

I could get away with today in

7:43

terms of a board's responsibility

7:46

for certainly good risk management. But

7:50

at the time, it was doable. And

7:52

we decided to go the course and begin

7:54

on the turnaround for the company. Now,

7:57

and this sounds pretty scary.

8:00

Okay, there's so much so many

8:02

moving parts and you yourself maybe

8:04

are not a bankruptcy expert or

8:06

financial restructuring expert. Yeah. And

8:09

you actually were one of the rare CEOs who

8:11

allowed us in a case that

8:13

we have on this moment to

8:15

describe like stopping on the merit

8:18

Parkway. Yeah. And just saying, Oh

8:20

my God, this is kind of

8:22

overwhelming. Is fear

8:24

a common emotion? I think it is. We

8:27

just don't want to talk about it, but tell us

8:29

what that moment was and how you dealt with it.

8:32

And maybe there was something about you we can

8:34

learn. I actually felt a lot of fear during

8:36

this period of time. And that was

8:38

a moment when it really became a

8:41

bit overwhelming. And I did, I

8:43

was coming off a flight from Japan and

8:45

had landed to headlines that were really ugly

8:47

about the company and put us in a

8:49

position where it was even going to be

8:51

tougher to kind of navigate

8:53

our way through the problems we had. And

8:57

I do, I remember just saying, I felt

9:00

like I had no place to go. I didn't want to

9:02

go to the office. I didn't want to

9:04

go home. The responsibility I

9:06

felt to all of the

9:08

constituencies of the company. And

9:11

you don't realize that when people kind of

9:13

talk about filing for bankruptcy as if it's

9:16

quite frankly, an easy solution. I

9:18

mean, there's an ecosystem around

9:20

a company that really gets

9:23

burnt in bankruptcy. There's

9:25

retirees that lose

9:27

retirement and healthcare. There's

9:29

hey, 100,000 plus employees that

9:32

literally will shrink to a

9:34

negligible amount of people. There's

9:37

suppliers that will go bankrupt.

9:40

It just felt like

9:42

an overwhelming responsibility. And I

9:44

wasn't at all sure that I would be

9:46

successful at that moment in time. Well,

10:08

let's talk about your predecessor. There

10:11

was somebody else who came into this job two

10:13

years before you, you were passed over for the

10:15

job and he was a turnaround

10:17

artist. I mean, he had done this

10:19

before. He had the finance background, he

10:21

understood finance. He built a

10:24

pretty darn good plan around what he

10:26

felt the company needed to do. So

10:28

here's somebody with the right

10:31

skills and the right plan and

10:33

still fails. Yeah, I think it

10:35

was one of the great lessons of

10:38

the importance of

10:41

motivation and culture, right? I

10:44

wound up, quite frankly, executing a

10:47

great deal of what

10:49

he had articulated and tried

10:52

to put in place. So it was

10:54

a good strategy that became unexecutable because

10:56

he didn't have the hearts and minds

10:59

and the people. So execution

11:02

failed and despite the fact that

11:04

it was a fairly well thought

11:07

out plan, he invested no time

11:11

in building relationships, in

11:14

communicating in a way that

11:16

people felt a part of the solution of

11:19

aligning his team, understanding

11:21

the importance of people

11:24

wanting to have impact and wanting to

11:27

find themselves their place in the story.

11:29

And he just didn't

11:31

see it and the Xerox workforce just

11:33

became armchair critics. They didn't move.

11:36

And as a result, none of

11:38

those plans got executed. In

11:41

this context, now you come into the job

11:43

and you have not

11:45

a traditional pathway to a CEO, right?

11:49

You had been chief of staff,

11:51

you had worked in the sales

11:53

organization, you had run human resources,

11:55

you had run worldwide operations, and

11:58

you had run a business as well. So

12:00

you had run a P&L, but it

12:02

wasn't even a job you were aspiring to at that point in

12:04

time. So what is it about

12:06

your background or even you as a leader

12:08

that you came in with a certain set

12:10

of skills and a mindset that

12:13

allowed you to take this on head

12:15

on? Well, I think

12:17

intuitively, and I've learned it particularly

12:20

in sales that it's

12:23

all about followership, right? At the end

12:26

of the day, you need a team

12:28

that's inspired, you need a team that's

12:30

aligned. So I was

12:32

a big believer in followership. I had

12:34

worked all over the company.

12:37

I had relationships all over the company. And

12:39

I always said what I always aspired to be was

12:41

the leader that people wanted to work for. And

12:44

when you do that over 25 years in a

12:47

lot of different places, you actually

12:49

wind up with an army of people who want to work

12:51

for you. And it was

12:53

powerful at the time. They gave

12:55

me permission to actually lead

12:57

and follow. So

13:02

that was really important. I think the other

13:04

thing that kind of gets overlooked sometimes and

13:07

hey, no CEO comes equipped with

13:10

every competence and capability that

13:12

you might like. But

13:15

I had two that were super important. One

13:17

is years and years in

13:19

sales makes you think

13:21

about seeing your business through

13:23

the eyes of your customers and

13:26

running human resources makes

13:28

you look through the lens of your people. And

13:31

I have to tell you that

13:33

those two experiences for me were

13:36

the foundation of how I led. Just

13:39

always thinking about the implications for

13:41

the people of Xerox and the

13:43

customers in terms of how

13:46

we would get things done and what had to

13:48

be done and what those messages had to be.

13:53

Thank you. Ann

14:10

Mulcahy grew up in Long Island, New York. She

14:12

graduated from Merrimont College in 1974 majoring

14:16

in English and Journalism. When

14:18

Ann took the top job at Xerox, she

14:20

was one of just five women leading a

14:23

Fortune 500 company. Ann

14:25

says her family background had

14:27

a lot to do with preparing

14:29

her to navigate corporate hallways and

14:31

boardrooms where men so vastly outnumbered

14:33

women. I had four brothers, no

14:36

sisters. I mean, that in itself

14:38

is pretty good preparation for

14:40

a woman succeeding in the business world. So

14:42

my comfort level was really high working in

14:44

a world of men. And my

14:47

parents were very enlightened. They never

14:50

wanted any difference between

14:52

my brothers and I. We were treated

14:54

equally. They weren't my chores

14:56

and the guys chores. It was very

14:59

unconventional at the time. And

15:02

with the exact same set

15:04

of expectations about education,

15:06

about career, about

15:08

values, it was

15:11

clearly a level playing ground. It

15:13

was quite frankly a shock to

15:15

me to experience

15:17

the outside world, which was

15:19

not a level playing ground compared

15:22

to the way I grew up. But I think

15:24

it gave me an incredible

15:27

amount of confidence in

15:29

my aspirations and

15:32

a lot of respect as well. I

15:34

think I grew up in a home

15:36

that was all about respect and values.

15:38

Both my father was a writer and

15:42

my mom literally it was before they

15:44

had Braille machines would tap

15:47

out and write books for the

15:49

blind for high schools and colleges.

15:52

And I would

15:54

watch her sitting there doing that

15:56

day after day. She was a volunteer

15:58

and she was the smartest. woman

16:00

I ever knew and devoted

16:02

herself to this. So I

16:05

grew up in the house of people that had great

16:08

values, had high expectations,

16:11

and had a sense of equality that they

16:13

were completely ahead of their time. So I

16:15

view it as the single biggest gift that

16:19

took me into adulthood was

16:21

that grounding. It's just it

16:24

was so strong and so positive

16:26

that it actually it carried me

16:29

through and to this

16:31

day defines more of who I am

16:33

than any experience I've had. Thank

16:35

you for sharing that. And just to build off of that,

16:38

the one thing that you talked about later

16:41

when you were CEO of the Xerox and

16:44

a word that you've used often is coming

16:46

to what you do with a sense

16:48

of responsibility. This

16:50

was personal. This wasn't just a

16:53

job. For sure. And

16:55

that changed the way you

16:57

showed up as a leader versus an

16:59

outsider coming in as a hired gun

17:01

to fix it. Could you

17:03

speak to that and how that

17:05

makes you show up differently

17:07

in some ways?

17:09

I think a couple of ways. I

17:12

think a lot of people commit to turnarounds

17:14

are focused on survival. I

17:16

never ever used the word survival. It

17:18

was always success, right? It

17:20

was not going to be about surviving. It was going

17:22

to be about being successful, about

17:25

being a company that people could be proud of

17:27

to be a part of. I remember

17:30

I used to have to do

17:32

a quarterly presentation to the workout

17:34

bankers because we had fully extended

17:36

our credit revolver. Not a

17:38

nice group, by the way. These are tough people.

17:42

And I remember getting

17:44

asked a question about how

17:46

would I define success

17:49

coming out of the turnaround? And

17:53

clearly this was a group that wanted me to

17:55

talk about growth and EPS

17:57

and cash generation and... And

18:00

I gave them an answer that was

18:03

totally dissatisfying to them, but totally the

18:05

truth. And I said, when

18:07

Xerox employees want

18:09

their kids to work here, I

18:13

will know that we've been successful.

18:16

And it was obviously to the wrong

18:19

audience. But it

18:21

happened to be true. I felt

18:23

that we were in it for the

18:25

long term. And I think maybe short term

18:27

versus long term is a big difference

18:29

in terms of how I thought about the

18:31

company. And although we took

18:34

incredibly tough actions in the short

18:36

term, so that we had

18:38

the opportunity to be

18:40

successful again, I always

18:42

had my eye on the goalpost. And

18:45

I always communicated with people

18:47

about what we would

18:49

be when we came out of this, what

18:51

we would look like as a company. When

18:55

we came out of

18:57

this turnaround, we rebuilt the company

18:59

into a sustainable company

19:01

that they could be a part of

19:04

in the future. And do

19:06

you think this kind of sense of responsibility

19:09

helped you in some ways when you

19:11

were making these tough decisions where which

19:13

is kind of scary, or

19:15

even going to strangers to ask for help? And

19:18

you're going to Sandy Weil, CEO of Citi.

19:22

You don't know him from anywhere. And

19:25

you just walk up to him and

19:27

ask for help. So you

19:30

asked me if I think that approach

19:33

helped me. And the answer is 1000%. When

19:38

I made tough decisions, I have to tell you, I had

19:41

an army of Xerox people behind me. I

19:44

remember people coming up to me when I was announcing, and

19:46

I always announced kind of layoffs in person, saying,

19:49

Are you okay? And

19:52

it was kind of extraordinary to me

19:55

that there would be any sense of,

19:57

Oh my gosh, this is tough for you.

20:00

But yet, somehow, I earned

20:02

that with them and it made

20:05

an extraordinary difference. And

20:07

because the goalpost was so incredibly

20:10

important that the company actually make it through

20:12

this period of time, you kind of

20:14

lose a bit of your pride and

20:17

become pretty humble about what

20:19

you're willing to do. And that's what I learned.

20:22

And it's never an easy thing to call people

20:24

that you don't know and ask for help. But

20:26

I was really fortunate. I did call a number

20:28

of people and ask for help. Sandy was a

20:30

really important one because we had

20:32

to get our revolver renegotiated. We had

20:34

to hold out banks that, and it

20:36

was not Citigroup, but it was part

20:38

of the consortium. Every bank

20:41

had to agree, or basically it

20:43

would not get renegotiated. Then we would have had

20:45

to file for bankruptcy. And so

20:47

the stakes were really high. And I

20:49

went and spoke to Sandy. I mean, hey,

20:51

to his credit, he saw me and

20:53

he listened. He didn't give me

20:56

an answer that day, but

20:58

I'm coming back from the city and I get

21:01

a call that the last bank

21:03

had signed. And so, hey,

21:05

I used to kind of have

21:08

this conversation with myself about what do

21:10

I have to lose? What's

21:13

the worst thing that could happen? And

21:15

at the end of the day, have

21:17

I done everything I possibly can to make

21:20

a difference, to actually move

21:22

the ball forward? Hey, if you

21:24

can answer those questions, I think it creates

21:27

a lot of courage in terms

21:29

of what you wind up

21:31

feeling empowered to do. Well,

21:33

one thing you didn't have, Ann, was a

21:36

support system of other CEOs you could

21:38

call on. Just

21:40

nearby to where you were, there

21:43

was actually, you described once, a

21:45

network of male CEOs who got

21:47

together and shared and leaned on

21:49

each other and talked

21:51

to each other. And you

21:53

never had that, but you've done something about that. I

21:56

have, because that I think was a huge loss

21:59

for me. me not to have a network

22:02

of peers or trusted colleagues

22:05

that you could learn from,

22:07

that you could ask questions

22:09

from. And so I

22:11

missed that. And I think it would have helped

22:13

me a great deal. So yes, I think

22:17

certainly things have progressed,

22:19

but I think women still tend to be

22:21

a bit isolated in terms of peer networks.

22:24

So one of the

22:26

areas that is kind of for me paying

22:28

it forward is to bring a

22:30

group of women together who are

22:32

CEOs or C-suite executives and

22:35

facilitate kind of a networking group

22:37

that can build

22:39

relationships with one another and call upon each

22:41

other when they have issues and problems. And

22:43

so part of it's social and we build

22:46

relationship and we get to know each other.

22:48

And then it basically evolves

22:50

into something where people have trusted

22:52

relationships and they can then

22:54

call upon each other when they need

22:56

support. Hi, I'm Frances Frye. And

22:58

I'm Anne Morris. And we are the hosts

23:01

of a new TED Podcast called Fixable. We've

23:03

helped leaders at some of the world's most

23:05

competitive companies solve all kinds of problems. On

23:07

our show, we'll pull back the curtain and

23:10

give you the type of honest, unfiltered advice

23:12

we usually reserve for top executives. Maybe you

23:14

have a coworker with boundary issues or you

23:16

want to know how to inspire and motivate

23:19

your team. Give us a call and we'll

23:21

help you solve the problems you're solving. Find Fixable

23:23

wherever you live. Zero

23:43

is far from being the only

23:45

big and seemingly invincible brand name

23:48

to face extinction. There's

23:50

Kodak, Pan Am, Sears,

23:52

Blockbuster and many others.

23:55

I asked Enmal Kehi where the

23:58

gravitational pull comes from. that

24:00

drag such great companies into the

24:02

abyss. It's amazing to me how

24:04

frequently it happens, right? That really great

24:07

companies that are leaders for

24:09

a long period of time. So

24:11

I think a part of it is

24:13

arrogance, right? I think you kind of

24:16

just assume that things will keep going

24:18

the way they're going and you

24:21

stop being as tough-minded, you stop looking

24:24

around the corner for areas

24:27

that you should be focused on.

24:29

You don't have that healthy paranoia

24:31

that I think is required to

24:34

keep a company current and competitive.

24:37

I think they get insular. I would

24:39

look at it and say Xerox issues

24:41

were almost 100% controllable

24:43

inside the company. There was

24:46

tough competition, but we had

24:48

been disintermediated. We were

24:50

just being out-engineered. It

24:53

was all manageable within the company if we

24:56

had been tough-minded,

24:58

if we had been focused

25:00

on the market versus inside

25:03

the company. And

25:05

what happens when companies, big

25:08

companies that get complicated start to

25:10

lose it, they also start to

25:12

look for financial engineering, right? And

25:15

so that was the other

25:17

side of what happened. We got more focused

25:19

on financial engineering than we did on

25:22

the fundamentals of

25:24

growth and competitiveness. If

25:26

you search business journals for the

25:29

essential qualities found in successful corporate

25:31

leaders, a bunch of

25:33

important attributes commonly make the list,

25:36

decisiveness, adaptability,

25:39

discipline, intelligence,

25:42

all good things. And

25:44

I add to that catalog one

25:46

more critical quality, courage.

25:49

It takes guts to make bold

25:51

decisions, to take risks, and to

25:53

weather tough times. So

25:55

sometimes the lack of courage in corporate leadership

25:57

contributes to the down-falling of the economy. fall

26:00

of otherwise stalwart companies.

26:03

The status quo is a lot more comfortable than

26:05

taking on change, right? It is

26:07

really tough to implement

26:10

significant change in companies. And

26:12

I think, yeah, people get complacent.

26:15

And why do I want to take

26:17

that on when there's risk that it may

26:19

not work? I often

26:21

reflect on the fact that one

26:23

of the advantages I had was

26:26

living on the edge. It was the ultimate

26:28

burning platform. And

26:31

I didn't really have a choice

26:34

but to be courageous and decisive.

26:36

The alternative was super

26:39

unattractive. So I do

26:42

recognize that I had

26:44

this, if

26:47

you will, assist to make bolder

26:49

and decisive actions because of

26:51

the crisis that we're in. And

26:54

I coach a lot of companies that I work

26:56

with to create incentive for

26:59

change. And you have to

27:01

work hard to make sure that people

27:03

are motivated to actually change

27:06

versus standstill. It is not,

27:08

it's not trivial to create that

27:10

level of embracing change

27:12

in companies for sure. On

27:15

this note, how do

27:17

you give courage to others? Because I would

27:19

imagine that at Xerox at the time, you

27:21

weren't the only one who was fearful. Nobody

27:24

was fearful, right? Absolutely. About

27:26

their jobs, about this company,

27:28

about their future. How

27:31

did you give them confidence,

27:34

courage, hope? So

27:37

I mean, part of it does come from

27:39

modeling, right? I think it gives

27:41

permission for others

27:44

to make tough decisions, to take

27:46

risks. So I

27:48

think modeling is a big part of

27:50

it. But communicating is really critical.

27:53

This is where you have to

27:55

be super effective at setting the

27:57

expectations of... what

28:00

you expect from people. And if

28:02

you expect them to take risks and

28:04

make decisions and know that we won't

28:06

get it 100% right,

28:08

and that's okay, that

28:11

we're still better, having made

28:14

decisions, moving forward, embracing

28:17

the future than we are living

28:19

in the past. And

28:22

so communicating in touch is really a big

28:24

part of how you get people to act.

28:28

And for me, that

28:30

was the vast majority of how I

28:32

spent my time was meeting

28:35

with teams and leaders and

28:37

folks on the manufacturing line

28:40

and setting expectations for them

28:42

to be bold and

28:44

to really have the courage to do what

28:46

was right for customers and

28:48

to do what was right for the business, to be

28:51

able to talk about what

28:53

we're doing is stupid, and we got

28:55

to stop doing it and rewarding that

28:58

kind of behavior. So yeah, I

29:01

think modeling and communications are the

29:03

tools that you have to really

29:05

get people to be active participants

29:08

in a change agenda. Are

29:45

there any culture role

29:47

models that you encounter

29:49

doesn't have to be CEO or

29:51

anybody else? Were

29:54

there people you saw like, wow,

29:56

that's pretty remarkable that they took

29:58

on this. really tough.

30:01

You must have seen people like that, that

30:03

you also may have modeled intuitively

30:07

yourself. So I did and

30:09

that's like super helpful. Hey, Warren

30:11

Buffett was that person for

30:13

me and kept clarifying for me

30:15

what was important versus what was

30:18

BF and provided

30:20

the answer to that question of

30:24

what really counts, what makes a difference,

30:26

what really counts and keep your eye

30:28

on that. He gave me

30:30

courage to focus on

30:32

the things that really mattered and I will

30:35

always be appreciative of that. So

30:38

he certainly was someone who did

30:40

that for me. There were members

30:42

of my board, Ralph Larson,

30:45

who was the CEO of J&J and John

30:47

Pepper, who was the CEO of P&J. I

30:49

mean, these were icons,

30:51

these guys were like the kings of

30:53

business and they

30:55

gave me advice

30:58

and counsel and

31:00

trust that I

31:03

couldn't have done it without having their

31:06

support and their trust. And John

31:09

Pepper, who was viewed as one

31:11

of the most ethical values-based leaders

31:13

in America, made multiple

31:15

trips to the enforcement section of

31:17

the SEC with me to

31:20

negotiate a settlement. I mean, this is a

31:22

guy whose reputation is so stellar but you

31:24

want to talk about courage and

31:27

doing the right thing particularly

31:29

when it's not easy. I had some

31:31

pretty awesome role models for sure.

31:34

And I don't want to ask too many

31:36

negative questions but why do we have such a

31:38

lack of courage in the world? The

31:40

opposite of courage is I was looking for a

31:42

word finally I found one called cowardice, right? The

31:45

inability to act, the inability

31:48

to take a position, the

31:50

inability to do things, the right thing,

31:52

it seems

31:54

to somehow be the more prevalent

31:58

mode of being. Right. And

32:02

is it simply that as human beings

32:04

we are wired to be

32:06

cautious and stay within our comfort zone

32:09

unless we are really forced to? How

32:12

would you explain that? Well, being

32:15

courageous doesn't always work out. So it's appropriate

32:17

to be fearful, right? I mean, it doesn't

32:19

always end up the way you want it

32:22

to. And I think

32:24

we have lots of examples of that too. So

32:26

I think people

32:29

are so fearful

32:31

of failure that

32:34

I think staying safe often looks like

32:37

the better path, right? I mean, you've

32:40

got to have a very strong

32:42

North Star in terms of values at

32:44

times to take a stand. I

32:47

witnessed some of this. I mean, people who fight

32:49

for human rights, I'm always like so in awe

32:51

of, right? I mean, we see them. They're

32:54

being jailed in Russia and China.

32:57

And these are

32:59

really tough, tough positions to take.

33:01

So I think

33:03

it's just really hard at times. And

33:06

things always seem so clear in the rear view

33:09

mirror, Ranjay, right? It's

33:11

like, it's so easy to

33:13

be critical, but at

33:16

the time it's very risky

33:18

and there are just people who it's

33:20

just not worth it to them to

33:22

take the risk of failure. Why

33:25

is courage not part of popular

33:28

vocabulary? Like, is it just something that

33:30

leaders don't like to talk about? Does

33:33

it feel very militaristic? Because courage

33:35

is not just physical courage, there's

33:37

moral courage. Right. Absolutely.

33:40

And in today's world, leaders

33:42

need to get comfortable exhibiting

33:46

not just kind of financial

33:49

courage or whatever courage, but

33:51

moral courage. Why is

33:53

courage not part of our conversation

33:56

as much as it should be? I mean, I think it's

33:58

such an important part of business. I

34:00

might step back, Ranjay, and say it doesn't

34:02

get used often enough anywhere.

34:06

I would begin with families

34:09

and schools. I

34:12

think this should be

34:14

a topic that is

34:17

something that we are talking about

34:19

very early in someone's life and

34:22

demonstrating and pointing it out

34:25

and setting

34:27

examples for. This

34:29

idea of moral courage, and particularly

34:31

I think the situations that CEOs

34:34

find themselves in today, this is

34:37

really a values discussion. This is

34:39

about where's your values roadmap

34:42

in terms of guiding you as

34:44

to when and how you

34:48

take a position. I

34:51

think we should be talking about

34:53

it more everywhere, but where it

34:55

really needs to be embedded is

34:58

earlier on than business because I

35:00

think that's where it

35:02

truly becomes part of who you are. It

35:04

becomes a behavior. It becomes a thought

35:07

process. Then I think

35:09

you should be bringing it into business and

35:12

certainly it should be a topic

35:14

of conversation in business. I

35:17

still think we separate a little bit from the

35:20

hard stuff versus the soft stuff. It's

35:23

a lot easier to talk about the hard stuff than

35:25

it is the soft stuff. I think

35:27

now we're coming to a point in time where

35:29

this is becoming such an important part of the

35:31

role. We don't have a choice but

35:34

to start making this a bigger part of the agenda. As

35:36

a board member, what do you

35:38

tell your CEOs when they are

35:40

being forced to take stances on

35:42

very difficult moral issues? We're

35:45

highly polarizing at the fault

35:48

line of society. The

35:50

first thing I say is you have

35:52

to have a voice. It's no longer acceptable to

35:55

be silent. I

35:57

say that with the caveat that not everything is

35:59

as material. to one company as it is to another.

36:01

So I think there is kind of a, I

36:03

call it a social materiality here that

36:06

needs to be gauged and assuming it makes

36:08

the radar screen, then you have

36:10

to have a voice because not

36:12

having a voice is like you're still speaking.

36:15

It's just not, you know, you're not in

36:17

control. And then I look at it and

36:19

just say, this is where you have to

36:21

look and say, if you're a J&J, look

36:23

at your credo, right? Look at the

36:25

guidelines that you have set for your

36:28

people in terms of values

36:30

and behaviors and attributes that you

36:32

expect and use

36:34

that as a guideline for how you

36:37

respond to these kinds of issues. And

36:40

I think it starts to actually flush out

36:42

in a way that makes sense. And by

36:44

the way, you will be pleasing everybody obviously,

36:46

and you have to kind of get over

36:48

that. No matter what you

36:51

say, I just had this conversation

36:53

with a CEO this weekend because a

36:57

statement was put out and

36:59

the backlash was immediate

37:02

and harsh. And, you know,

37:06

he said, I think we have to put

37:08

out another statement. And I said,

37:10

well, if you've learned

37:12

something, that should be added

37:15

to what you've said. Terrific. But

37:18

if you're reacting because people are

37:20

uncomfortable, they're still going to be

37:22

uncomfortable when you put out your

37:25

second statement. So don't be

37:27

confused about that. So this

37:29

isn't perfect. But I

37:31

do think that there are

37:34

kind of values guidelines that

37:36

companies can stay within and speak

37:38

to these issues, whether

37:41

it's equality or violence

37:43

or humanitarian issues or

37:46

prejudice. I mean, those are values. And

37:49

I think a lot of these

37:51

issues overlap with their values. And I think it's

37:53

a guideline for how they should respond. In

38:08

2010, Ann Mulcahy announced her

38:11

retirement from Xerox. Her

38:13

hand-picked successor was Ursula Burns, the

38:15

first African-American woman to run a

38:18

Fortune 500 company. Ann

38:21

had brought Xerox back from the brink

38:23

of oblivion. In 2001,

38:25

the company lost almost $100 million. Five

38:30

years later, profits at

38:33

Xerox dropped $1.2 billion.

38:36

Under Ann's leadership, Xerox

38:38

shared unprofitable products, cut

38:41

its payroll, and expanded from being

38:43

a hardware company into

38:45

one that also provides essential

38:47

business support services. Ann

38:50

was 57 years old at the time she

38:52

stepped down. I asked

38:54

if it was tough to leave Xerox, a company

38:56

she'd worked for so much of her life.

38:59

Yeah, you know, it was

39:01

really hard and it was much harder than

39:03

I expected actually. I think it wouldn't have

39:05

taken much for me to do what a

39:08

lot of CEOs do and say, I can

39:11

do two more years, you know, and kind

39:13

of let it roll along. It's a great job.

39:15

It's the best job I ever had. I loved

39:17

every minute of it. It was really, really

39:19

hard to give it up. My

39:23

motive for giving it up was twofold.

39:25

One is I do think that we

39:27

all have a shelf life in terms

39:29

of our effectiveness and it

39:31

was almost 10 years. So I felt like the

39:35

company would benefit from fresh perspective. So I really did

39:37

believe that in my heart that I had been there

39:39

long enough. But the second

39:41

reason was personal. It was my husband was

39:43

older than I was and it

39:46

was a 24 7 job for me. I

39:48

did not have work life balance. That was not,

39:51

didn't go along with the territory. And I think

39:53

I told you this story, Ranjay, but I remember

39:55

Ralph Larson, the CEO of J&J, when

39:58

he saw me wavering a bit. He pulled me

40:00

aside and he said, don't

40:03

stay. He

40:05

said, most of us think the most important

40:07

part of our legacy is we've been

40:09

CEOs. He said, but that's

40:12

not really true. You find that out when you

40:14

leave. The most important part of your

40:16

legacy is what you've done with your personal life

40:18

and your family and the people

40:20

that really you love. And he

40:23

said, so you need

40:25

to spend that time with your husband. And

40:27

I told you, it was like the best advice

40:29

I ever got because I did leave and two

40:32

years later, my husband died of a heart attack.

40:34

And we had those two years to

40:37

actually spend quality time. And

40:39

that was the best gift I

40:41

could have ever been given. And I

40:45

do think that as much as

40:47

that CEO job is all consuming,

40:49

all fulfilling, and you may love

40:51

it, it's like super important to

40:53

find ways to transfer your

40:56

passion also to other things. That's when I

40:58

became chair of Save the Children, which for

41:00

me was also one of

41:02

the most fulfilling things I've done

41:04

in my life. I was chair of Save the Children

41:06

for seven years. I'm still on their board and I

41:09

love the place. And I've been

41:11

able to stay engaged in business

41:13

because I've been on corporate boards

41:15

and I've been

41:17

able to give back a lot through

41:20

coaching and mentoring and that's meant the

41:22

world to me. So yeah, I always

41:24

tell current CEOs, it really is better

41:26

to leave a little early than stay

41:28

too long. And there is life after.

41:31

You have to be thoughtful about it

41:33

and make some choices, but it's really

41:36

important that you kind of start

41:38

to define your life post-CEO in

41:41

a way that's meaningful and something

41:43

that gives you fulfillment. And

41:46

I want to ask you about legacy. You mentioned

41:48

the word legacy. How would

41:50

you think about legacy, your

41:52

legacy? You know, I

41:54

don't think about it a lot. I kind of

41:56

envisioned what would be written in my obituary, but

41:59

that's not true. That's not necessarily the same

42:01

thing as legacy, if you know what I mean.

42:03

I do think the most important mark

42:05

that we leave in our lives

42:07

is what we've done to

42:10

support the people

42:12

that we love in our lives. So my

42:14

kids, my grandkids, all

42:17

the people that mean something to me,

42:19

hopefully to have had positive impact on

42:21

their lives. I do

42:23

think that if you've been lucky enough to

42:25

have a career like I've had, then I

42:27

think you also have to think about giving

42:29

back. So for me, nonprofit work is

42:31

super important. And my passion was

42:34

about children. Now I'm also chairing

42:36

the Nature Conservancy

42:38

for Connecticut and trying

42:41

to make a difference on the environmental side,

42:43

because I think we all have to be worried

42:45

about how we contribute to the

42:47

solution there as well. So yeah,

42:49

I'm trying to have

42:51

an impact on things that will

42:54

be part of the next

42:56

generation's future, whether that's coaching

42:58

next generation executives, whether it's

43:01

being a good mom and

43:03

grandmom, whether it's changing

43:06

the trajectory of children's lives who

43:08

are in war zones, or

43:11

hopefully clean water and clean

43:14

air. Those are the things that I hope

43:16

I just leave a bit of a footprint

43:18

about. Anil K. He

43:20

is the retired CEO of Xerox Corporation.

43:28

There are many more of my

43:30

in-depth conversations with top business leaders

43:32

from around the world at my

43:34

website, deeppurpose.net. That's

43:36

where you can also find out about my book

43:39

titled Deep Purpose. Companies that

43:41

are serious about establishing and working towards

43:43

a deep purpose find that

43:45

it delivers game-changing results for

43:47

the workers, the shareholders, and

43:50

larger society. So

43:52

visit with me at deeppurpose.net. This

43:56

podcast is produced by David Shin and Stephen

43:58

Smith with the help from

44:00

Craig McDonald and Jennifer Daniels. The

44:03

theme music is by Gary Meister and

44:05

Ranjay Gulati. Thanks for listening.