Anne Mulcahy at Xerox: Crisis, Context, and Leadership Transition

Xerox’s crisis context

In the case, Xerox enters a period of severe strain after strategic and operational changes failed to produce the expected benefits. A major sales reorganization disrupted long-standing customer relationships, weakened revenue and profits, and contributed to employee departures. At the same time, customers experienced billing problems and more complicated pricing, creating openings for competitors to take market share. These operational breakdowns combined with a sharp deterioration in market confidence as Xerox stock fell steeply.

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Leadership change

Anne Mulcahy did not seek the top job under normal conditions; she was elevated as Xerox confronted a deep business crisis. After Paul Allaire secured Rick Thoman’s resignation, the board elected Mulcahy president and chief operating officer. The case presents this moment as high stakes for both the company and Mulcahy personally, because Xerox’s future seemed uncertain and many stakeholders were depending on a turnaround.

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Mulcahy’s initial understanding of the problem

When Mulcahy became COO in May 2000, she discovered how poorly understood the seriousness of Xerox’s condition was across the organization. She described being amazed that virtually no one fully grasped the depth of the issues. Her first objective became developing a complete understanding of the company’s challenges rather than treating them as isolated problems.

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Constraints she inherited

Mulcahy faced the crisis with important informational and organizational constraints. In her prior general management role, she had been somewhat removed from Xerox’s core business and lacked a clear view of the main operation. Once in senior leadership, she also intentionally avoided taking the lead on the SEC matter in her first year because she had not been involved in the underlying issues. This meant she had to stabilize the business while building her own understanding and credibility.

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Central leadership problem in the A case

The case frames Mulcahy’s challenge as more than a financial turnaround. She had to diagnose a company-wide breakdown, restore confidence among employees, customers, shareholders, and directors, and decide what strategic course Xerox should follow under extreme uncertainty. Her leadership task was to create a clear, repeated agenda and align stakeholders behind it while the company remained under intense pressure.

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