The manager.

Anne Mulcahy had her work cut out. A one-time Xerox sates rep who worked her way up to senior management--including a stint covering South America and Central America--she was tapped to be CEO of the venerable tech giant at the lowest point in its tong history. By August 2001, when Mulcahy took the reins, she faced US$17 billion in debt, a skeptical Watt Street and near-certain bankruptcy.

Thus began one of the most unexpected, and widely lauded, turnarounds in tech history. The company--whose name is nearly synonymous with "copier," although it sells heavily into professional print production and has a strong document-management and services businesses--posted $15.90 billion in revenues in 2006. Mulcahy spoke with LATIN TRADE Editor-in-Chief Greg Brown about the keys to being a modern CEO, building "followership" and monetizing the Xerox brand.

You talk to a lot of people all the time--customers, partners, employees. How do you tell a pretty good idea from a real revolution, something so valuable that you want to implement it on the spot?

I have to say, there aren't a lot of radically good ideas. I should say, there's lot of great ideas but not the ability to execute against all of them and sometimes it's just making choices about really focusing on the execution part versus just the good idea part. But I think that when you hear something ... I'll give you an example, we had a roundtable with agent-owners and we're very focused on growth and helping them with tools and they said, 'You know, one of the things that we think would be more helpful is that if we could source and retain our people at a better rate than we do, your ability to grow through us would be exponential. So why don't we put a joint team together to really focus on some joint sourcing and retention strategies?'

Get Xerox's human resources down into their operations ...

That's exactly what they were asking for. I think that's a great idea, and I'm going to take that one and make sure we get focused on it. It's great, too, that it will be developed with our partners, and co-development is becoming the best way to get good execution. When you can develop with your customers or do things on-site, your ability to execute and get real world feedback ...

I was going to ask, How does this go from two people agreeing 'This is the way it should be' to 50,000 people doing something?

I would tell you that of all of the things we talk about in business that are tough to do and important, the most important thing is what you can get alignment around, with 50,000 people and partners and customers.

So, multiplied several times ...

Absolutely. If I apply energy into one thing, and the reason I feel like getting to events and talking to a room of 1,000 people and 500 people, is that the more we share and align, the better off we'll be from an execution perspective. So, I look at it and say, yeah, it starts out as a good idea, but we've got great tools through our lean Six Sigma groups to begin to put people together in ways that take those good ideas and in a very disciplined way be able to break them down and create the implementation path that you need to be successful and, then, communication and training is huge. You've got to get out there and market and deliver the message, listen to the feedback, be adaptive and get people aligned around this common good idea for execution purposes. I would tell you that's the way we saved Xerox. That that was the thing that actually saved this company, was the fact that people got aligned around the story, believed in it, rolled up their sleeves, and acted in unison to really fix the issues in the company.

They had a big incentive at the time. The company was falling apart, and this was a very public crash. How do you keep incentivizing people once times are good?

I keep reminding them about the past. I do. If there's one thing we owe our customers and our shareholders it's that we don't forget the lessons that we've learned. I am big on getting out there and talking about the lessons learned and how they have to be embedded within who we are as a company, that that's a tremendous advantage. You don't choose to learn through a crisis, but if you are there, the one thing you should be bring out of it is the ability not to get in one again. I think that's pretty inspirational, to say that we're better, that part of it's better listening. We're more humble. And we've learned a lot along the way. That's got to be the core of what keeps us fresh and hungry and desirous of being a better company.

The next generation of business people will have been bred on global, instant, perfect search by a certain popular search engine and, at the same time, many customers worry about Sarbanes-Oxley compliance and being able to retrieve every single thing.

We're going to help them with that. Our strategy is to provide a pathway between the paper-based manual world and the digital world that's going to have to be enabled to take advantage of those kinds of tools and capabilities that are out there. A lot of what our services business is about is digitizing processes, saying, you know what, it's not good enough having digital technology, you actually have to digitize the way you work. You've got to be able to automate, and this whole smart-document strategy is about automating and replacing a lot of manual intervention and document processes. We're going to be best at that, and we're going to help our customers segue from a very labor-intensive, complex, paper-based world into a world that is enabled by the use of digital repositories and search tools. A search technology out of our PARC lab takes a technology, developed at our PARC, a natural-language search technology, intuitive search versus the very ritualistic search that Google uses today. We've invested in a company to try and commercialize natural language search, and it's a very big deal.

I've seen white papers on ideas that, 10 years later, are happening, but the company that put the white paper out isn't the one behind it. How can one manager, even if she is CEO, fight that kind of sclerosis?

We invest in research. Lots of companies don't. Lots of companies invest in pure engineering and product development. We have four research centers and the reason we do that is that you have to go upstream to really get invention and innovation to be a part of your DNA. That's where it happens. When I meet with our most prolific researchers I say, 'How do we create a process to get ever-better innovation?' They kind of tell me, 'Stay out of our way.' Because great innovation generally happens by way of experimentation, never by planning. Therefore, you've got to be able to invest in experimentation, and that's a lot of what research is about. As a result, you can't expect all of it to go to market. You have to take the risk. And then you have to have different paths to market. A lot of our research today is now embedded in our services, so now there's this great pipeline from things like intelligent redaction and smart mailrooms and things like that that go into our offering. And there's other things, like natural-language search, that we say, 'We don't think we can properly commercialize it. Let's invest, let's take it outside the Xerox world.' There's licensing opportunities, there's all sorts of ways to commercialize and still keep this great baseline of innovation in place. That's our goal. We want to be a source for innovation. A whole bunch of it won't be commercialized within our company. We'd like to get some monetary value from it, but we don't want to constrain our research to being, quite frankly, mundanely associated with next year's products. So I think it's a big deal.

Is it possible to make a CEO, or does one just learn it as one goes along?

I don't think it's totally formulaic. Some of it is right time, right place, circumstances. But I do think that there's a set of characteristics now that we can do a better job of identifying and grooming people for, that make them just better leaders in general.

For instance?

I would look at this and say, engagement with constituencies. There used to be a time when that wasn't important. But as CEO as you've go to be the No. 1 salesperson. You've got to go out, you've go to talk to clients, support your field operations. You've got to think about shaping your shareholder constituents. In this day and age, you don't leave that as just a passive task. You've got to think about, what kind of shareholders do you want? You've got to go out and market to them, you've got to create that alignment within your company. There's just no substitute for that.

Inside the company and outside?