Xerox’s Divide and Conquer Plan

As 2016 comes to a close, Talent Management 360 is offering detailed insights into some of the year’s top news stories and speculating on how these stories will likely continue to impact talent management in the coming year. The fourth article in our series examines Xerox’s continued free fall and corporate response. 

It is now a well-known story of missed opportunity: Xerox Corporation failed to become a tech leader in the 1990s, because it was too narrowly focused. The first personal computer was developed at Xerox’s Palo Alto’s research center in the 1970s, but Xerox was so preoccupied with building a paperless office, they failed to realize that the personal computer’s life would eventually move well beyond the workplace. Steve Jobs, however, was excited about Xerox’s technology and the rest is history. Jobs brought Xerox’s concepts over the Apple and today, most people still think about Xerox as a producers of photocopiers while Apple is ubiquitous.  Not surprisingly, Xerox’s poor decision making in the 1970s to 1990s is now sinking the company into the ground. In 2016, they tried to turn the company around with a series of bold moves.

The Current Situation at Xerox

Between 2011 and 2015, Xerox lost over $2.5 billion in total revenues. In response, in recent years,  Xerox has worked to shed about $100 million in costs. Since this was not enough, last year, management started to divest in some areas, including abandoning at $7 billion division it acquired under CEO Ursula Burns leadership. Indeed, in January 2016, Xerox announced plans to separate into two independent, publicly traded companies: Xerox Corporation will be comprised of the company’s document technology and outsourcing businesses, and Conduent, Inc. will be comprised of the company’s business process outsourcing businesses.

Strategies for Change

First and foremost, with Xerox’s restructuring, Ursula Burns will retire, but she wont’ leave  retirement package of close to $17 million in assets. Notably, while this may sound large, many CEOs in similar roles leave with well over $100 million in assets, so Burns’ situation may still point to a glass ceiling, albeit a very high one. Also, Burns’ departure, while arguably good for Xerox, will leave a hole in the tech industry. As a woman and African American, Burns’ leadership at Xerox has also played an important role in the tech industry in recent years as discussions about lack of diversity have shadowed the industry and its hiring and promotion practices.

In Burns’ place, former Kodak executive, Jeff Jacobson, who arrived at Xerox four years ago, will step up. While Jacobson’s plan for the new Xerox is still somewhat unclear, he recently told the Wall Street Journal that the company will cut jobs (how many is unclear) in an effort to save $1.5 billion over the coming three years.  Other plans for change at Xerox include accelerating productivity, expanding markets, and launching 29 new products in the early months of 2017.

Lessons Learned

While there is still hope that Xerox, one of America’s oldest tech leaders, will recover, there is also fear that this may be the beginning of the end for Xerox. As a result, many onlookers are asking what lessons one can learn from Xerox’s demise. Most obviously, Xerox suffered because rather than focus on user experience, throughout the 1970s, 1980s and 1990s, they remained focused on creating machines with a specific intent in mind. Their goal was to transform offices with machines but they failed to ask how users were actually adopting and adopting machines for personal uses and even uses that had little or nothing to do with work. By contract, Apple started looking early on at how users were engaging with technologies. When they released the iPod–one of the world’s first pieces of computer hardware made for consumers not businesses–they were taking a risk but one that ultimately paid off. What Apple realized, which Xerox could not see, was that it was viable to create computer technologies for individuals not simply businesses and institutions, such as schools. In 2017, everyone will be watching carefully to see whether or not Xerox’s plan to divide and conquer will work and help the historic tech company regain its place as a major industry player.

December 17, 2016   Updated :December 23, 2016      

Copyright © 2020 and Telania, LLC. All Rights Reserved. Privacy Policy. If you have any questions, contact us here.