Anne Mulcahy

Anne Mulcahy is credited with the strong leadership that brought Xerox back from near death, converting a balance sheet red with massive debt and losses into one flowing into black in 2006 with $1.2 billion in net income on $15.9 billion in revenue.

For this achievement, she is consistently named among the top echelon of corporate America's most powerful women. But Mulcahy herself says one of the accomplishments of which she's most proud is making believers in her simple but profound change of strategy at the Stamford, Conn.-based hardware company—steering it away from a go-it-alone, direct-sales strategy to a culture defined by the mantra, "Partner or perish."

That Mulcahy even took the job in the first place says a lot about her strength of character. Now in her seventh year as CEO, when Mulcahy took the reins the company's stock price was crashing, its debt was mounting and top executives were under fire by regulators for allegedly illegal accounting practices. When then-chairman Paul Allaire broke the news that Xerox's board of directors wanted the longtime sales champion to become chief executive, the promotion wasn't exactly cause for celebration.

"It was a difficult time," Mulcahy recalled. "It was under an unusual set of circumstances. Where most people would be getting congratulations, I was getting more condolences than congratulations."

Still, she took the job. Phone calls and notes poured into her office as Mulcahy hunkered down and began planning the future, seeking the input of bankers, investors, customers, partners and officials of the U.S. Securities and Exchange Commission.

One of those reaching out to Mulcahy was Warren Buffet, the billionaire "Oracle of Omaha" and chairman of Berkshire Hathaway. "Think about it like being drafted into a war," Buffet advised.

She did. That was the problem. Xerox was under siege.

So, Mulcahy fought back with honesty, open ears and more than a little humility. She held meetings with Xerox employees. She went on the road and listened to customers. She even met face-to-face with SEC regulators and hashed out a settlement that maneuvered Xerox out of a thorny accounting case.

It worked. In 2001, Xerox lost $94 million. By last year, its profit topped $1.2 billion.

"This really had to be a mission to get the company back on its feet," she said. "A lot of what those first weeks and months were were really listening to employees and customers. It was painful listening, because there were a lot of things that weren't going well."

And so, Mulcahy joins the CRN Industry Hall of Fame after seven years of making things go right.

Now 54, she still exudes a youthful energy, confidence and spirited approach. When she speaks with people, she makes eye contact, answers questions directly and doesn't hide behind staffers.

"Partner or perish" became her rallying cry several years ago, after the company made it through several straight quarters of paying down a huge debt, showing sales growth and meeting Wall Street expectations. The idea was to forge a Xerox that could work ever more closely with independent technology solution providers. This was a huge cultural change: The company grew up fueled by a sales force that sold big hardware direct to end users and a network of Xerox-exclusive agents that worked largely on margin.

"You really do learn the most obvious lesson of all, which is creating pull vs. push," Mulcahy said. "Guess what? Solution providers don't work for you. These folks have to see you as having created a positive advantage for their customers."

One by one, she's been working to win over a channel of integrators, resellers, ISVs and IT solution providers. As Xerox's sales grow, each partner who shows growth represents a victory for Xerox.

Next: Mulcahy Inducted

"We look to complement their field organization," said Tim Kelly, senior vice president of Rochester Software Associates, a Rochester, N.Y., ISV and solution provider. "You've got to have good products, but it's also about good delivery. If every time you have an order you deliver, and the customer is more than satisfied—we want them to be delighted—that's what builds consistent sales and loyalty."

Mulcahy would know, having spent most of her career in sales and having been successful enough at it to climb to the highest rung on the ladder. After a childhood growing up in working-class East Rockaway, N.Y., and studying journalism at Marymount College, Anne Dolan talked to her older brother Thomas about where to steer her career. He had worked at Xerox for a few years and loved it, and she liked the idea of working for a company with a strong brand and reputation. It was 1976 and having decided that a newspaper career was more of a dream than a realistic possibility, she signed on at Xerox and was sent to New England to sell the company's copy equipment and supplies.

She worked her way up the ladder, where she eventually met her husband, who had also worked there. From one sales management job to another, Mulcahy spoke to others about developing channel sales. There wasn't much interest, or if there was it wasn't acted upon.

Then she saw her opportunity. Under then-CEO Richard Thoman, Mulcahy was appointed vice president of global sales. In that post, in the late 1990s, she put together a deal to buy the office printer and multifunction printer business of rival Tektronix. In the deal, Xerox won a significant new lineup of office document hardware—Phaser—which was sold via a cadre of solution providers and resellers, many of which had previously not done business with Xerox."It really taught us so much about product development, marketing, training," Mulcahy said. "The whole context of creating value for the channel is something that was of utmost importance to us."

Another of Mulcahy's first orders of business in the CEO spot was to cut costs, reorganize and put Xerox on better financial footing. In Rochester, N.Y., where Xerox employed thousands in research, sales and development, that meant an anguishing round of layoffs that left much of the community in dire straits. Yet, to this day, it's hard to find people in western New York who harbor a grudge.

"I think she's very well-regarded as the person who turned the ship around," said Kelly."Even though they had cutbacks, there was a time when people were questioning if Xerox was going to be turned around. I think she's viewed very positively."

Along with "Partner or perish," Mulcahy touts the idea of "Big 'I,' Little 't,' "—her way of saying that the "Information" part of the "Information Technology" industry should be the first focus. Find out how a customer does business and uses information, and then follow up with technology that can make that business better.

Another "I word," innovation, also is becoming increasingly important at Xerox again, under Mulcahy's direction. The company once thought it would spin off its Palo Alto Research Center subsidiary to pocket the cash. Market conditions following the dot-com meltdown kept that from happening and now, Mulcahy, seeing PARC and research and development as a competitive weapon, wants the wholly owned subsidiary to blaze new trails. Earlier this year, PARC invested in a partnership with Powerset, which is developing a natural-language search engine that Mulcahy thinks can compete strongly with Google.

Mulcahy realizes Xerox may not have been the most idealistic of choices coming out of college. "I often tell my kids today when they are looking for the perfect job, 'It doesn't have to be perfect, and sometimes you have to get your feet wet and gain experience,' " she said. Now, 31 years after knocking on doors in New England, some would say that Mulcahy has found her perfect job and achieved the perfect results in return, shaped by her unique combination of perseverance, pragmatism and optimism.