Full disclosure. I worked for Xerox for 12 years and for the company it acquired, Tektronix, 6 years before that, as both an Engineer and an Engineering Support Manager of a Tools group. I left in July of 2012 on my own terms.
From the beginning in 2000 when Xerox acquired Tektronix for 1 Billion dollars, the culture shock of a large bureaucratic corporation’s management style was a tough pill to swallow for the good folks at the Wilsonville, Oregon site. But we had faith. “We hope some of your fast and nimble ways will rub off on our people”, the Sr. Management Team would say. Those turned out to be pretty shallow words over time.
The acquisition itself was all about trying to regain a presence in the growing Office space. At first blush, it seemed like a pretty good match of companies. Xerox had recently decided to exit its Inkjet venture, and was left with a still fairly strong Production Printing business ( big Iron printers for copy centers ), a small but growing Services business, but had holes in its Office product offerings. This is where Tektronix’s product line could help fill the gap with Color Laser printers and a new technology they seemed to be pretty stoked about, Solid Ink.
Xerox has a rather unusual culture, even for a large corporation, especially after the promotion of Ursula Burns to President of the Office Group. Ursula didn’t waste any time communicating her values to her minions. Instantly we all heard about fixing the diversity problem which was followed by a new set of criteria in our hiring practices complete with an extremely elaborate College Recruiting process that would ensure a more diverse work force. This by far took precedence over running a profitable business. The Staffing department got a new name. “Talent Acquisition and Diversity”
Ursula didn’t waste any time communicating who was in charge, either. She decided all hiring decisions including temps required her approval at a time when the Wilsonville site was ramping up for the biggest project in its history ( or at least trying to ). Exacerbated by her announcement that she could only be bothered with approving Staffing Requisitions once a month. It simply didn’t work but she was steadfast in her insistence on being in charge, especially on all things budgetary for a very long time. I think it drove the VP’s crazy because they were used to being empowered to get projects done and suddenly they have to make a case for every temp hire? We’re hiring 10 a week, or at least trying to. But from the get-go, Ursula let everyone know who was in charge and that she means business.
Meanwhile, the CEO at the time, Anne Mulcahy, was busy making sure that the face of Xerox was one where people recognize women and minorities would thrive. She made Ursula Burns her heir apparent, and it played right into the corporate values message.
This is all well and good if your business is doing well and growing. We were not. We were under constant cost pressures to get the price of the hardware down, to add new features to differentiate and truly compete in this market space. But rarely did Ursula communicate to the worker-bees the need for innovation. She was quite content with mediocrity, as long as it was achieved with a diverse workforce and Xerox’s Senior Managers made the cover of Diversity Inc. Truth be told, there were a lot of us who truly wanted her to succeed. We wanted to be a part of this great story of an African-American woman who rose from the ranks to be Chairman of a Fortune 100 Company, and would be proud to be a part of a company that values diversity. But we kept searching for what else she brought to the table besides her minority status and assertive style.
At the height of the lunacy, our division President, Jim Miller died suddenly. Ursula had a big decision to make on who would succeed him. Not being able to make up her mind apparently, and wanting to push her ever-important diversity agenda, she came up with the brilliant idea of co-Presidents. One Sr. guy from Wilsonville, and another Sr. Manager from Rochester, an African-American. Both very fine gentlemen. One a technology guy, one not. The problem was, the guy from Rochester didn’t pan out. A more senior manager confided in me that at an analysts meeting he simply did not know the products and made some embarrassing statements. He got promoted for the wrong reasons. I’m sure this was a tough one for Ursula. She desperately wanted to make a statement with this appointment but her best minority candidate wasn’t ready for the job and it was too risky to put him in there without some help.
The College Hire process crossed the line for me in about 2006. Prior to that I had volunteered to help out with College Recruiting which meant doing a campus visit or two per year and talking to College kids to get the best ones into our design groups. We were looking for Mechanical Engineers primarily, but also some Software Engineers.
For awhile the College Recruiting experience was pretty rewarding. It meant getting to meet some really bright kids and some very prestigious schools and hear about their internships and what they’d been working on and what they thought they wanted to do with their careers. I remember thinking it’s a good thing I’m not applying for my own job a few times. There seemed to be no shortage of excellent candidates everywhere we went.
The irony of it all, is that most years, we had significant budget constraints for the business. But we never take shortcuts on the College Recruiting process, even if we didn’t really have very many positions to fill. Some years we would send a contingent of 5 or 6 people on these trips as far as the East Coast and only have a 3 or 4 open requisitions to fill. Having seen the long lines at the Oregon State college fair, and plethora of qualified candidates for college hire positions (and a reasonably diverse population to choose from), I never understood why we would have such an elaborate process in place to fill so few positions. And then it dawned on me. It’s because they need to have a story to tell when Diversity, Inc comes calling. Nothing shall get in the way of us being in the top 10 list in those rankings.
The initial process as explained to me seemed to make sense. The idea was that if we made certain our recruiting trips were targeted for Colleges and Universities with a diverse student population, then it would follow that a diverse workforce would flow out of that. Okay. I get it. I’m on board. No issues.
I only went on a few trips but given the strategy above, it was never clear to me that the sites picked for college recruiting would really accomplish the goal of a diverse workforce. Stanford. UCLA, Washington, Purdue, MIT. I would have thought we’d be headed down to Tuskegee University or Auburn, but what do I know?
Anyway, it was a great experience talking to the kids and evaluating candidates and even hiring a few but you definitely got the sense from the “Talent Acquisition and Diversity” team that women and minorities who were qualified, would get extra consideration. It felt a little bit like we might be brow-beat into hiring the #2 or #3 person on our list if their skin was the right color. Hmmmm… Definitely a vibe there. This isn’t reverse discrimination, is it?
Then 2006 rolled around and the rules changed. Xerox played host to college hires with an evening soiree to meet the managers and learn more about the company. While being contacted about this year’s recruiting events I learned that the strategy this year was to make a trip to the University of Washington in Seattle, and come back with a bus-load of minorities, and only minorities, for the evening soiree. That’s when I checked out. I simply could not participate in an exercise that was clearly reverse discrimination. These kids wait in line for a long time to talk to us at times. Each and every one of them thinks they might have a shot at an interview if they say the right thing or impress in some way. I simply could not play the game of looking at non-minority candidates and feeding them a line of shit as if they had a chance for a job with us, knowing full well that the screening process included filtering out Caucasians, no matter how qualified they were. Now it truly is only about skin color. I’m out. I don’t know that Ursula made this particular edict herself, but clearly someone in HR was trying to impress Ursula with how well we are towing the line on her diversity priority.
Meanwhile, Ursula fulfilled Anne’s vision of heir apparent and became President of the entire company followed by CEO and Chairman of the Board.
Ursula had a pretty tough task from the start, inheriting a technology business where printing was becoming less popular, but once the iPads came out, it was over for printing. To her credit, I think she recognized that fairly early on and changed the focus from trying to have printing and technology be the main revenue stream, to services.
That actually makes some sense from a business standpoint. She acquired a company called ACS with a strong services track record and decided to try to marry the Xerox brand name with a progressive Services Company. So far it looks like a decent play. The challenge she has is that the margins are lower in the Services business so while it’s growing, it’s not as profitable as the technology business once was.
Ursula’s made two huge mistakes along the way though that are going to put major dents in her legacy. The first one was retaining an incredibly dysfunctional staff with no clue how to grow a technology business. Xerox invests millions if not billions of dollars in R&D and has virtually nothing to show for it. The stories are legendary and date back to the 70’s, but virtually nothing has changed about Xerox’s inability to bring innovative ideas to market despite their enormous investments in R&D. They are however, very good at promoting the fact that their CTO, Sophie Vandebroek, is of the female variety. Diversity accomplished I guess. I met Sophie Vandebroek back in about 2004 before she became CTO. She’s a very smart lady and didn’t get her PhD from MIT for nothing. There were some politics in play over the project I was trying to get budget for and it ended in a stalemate because the senior managers couldn’t agree on how to proceed. Ultimately the project was canceled. My only criticism of Sophie isn’t personal at all and it’s not just directed at Sophie, it’s all the CTO’s before her. Where are the products? Why isn’t Ursula holding the CTO and the overseer’s of the Palo Alto Research Center (PARC) accountable for inventing the new office? I’ve never understood that and I think that’s a huge oversight by Ursula as CEO and Chairman of the Board, to not have a steady flow of new products coming out of the company’s so-called innovation engine.
The other observation I have about the Sr. Staff and its dysfunctional ways was its inability to make a decision. When Xerox bought Tektronix in 2000, we met shortly thereafter and compared tool-sets. As manager of the Tools group I was involved in that process. The match could not have been worse. They used NX and we used ProE. They used Mentor and we used Cadence. They used TeamCenter and we used a home grown PLM Tool. They used ClearCase UCM and we used base ClearCase. Xerox had ( and still has ) about 5 different bug tracking systems. These issues never got resolved in 12 years because the Sr. Staff couldn’t and wouldn’t make a decision. Not a single staff member had the kahones to step in and say “enough”. We spent millions talking about change and filling in comparison spreadsheets but nothing ever got done about it. Not to mention engineering process differences at the sites went unaddressed for nearly a decade. Politics ruled and it wasn’t pretty. Senior manager indecision set in motion a bunch of site process wars that did not need to happen and were a huge drag on productivity and morale. They always took the chicken way out and left it to the squirrels in the cage to solve their own problems. The problem is, the management teams all the way up couldn’t agree. So it was the engineers and front line managers who suffered, forever trying to convince the other sites of a common process to put the issue to rest. Despite our best efforts, we never reached agreement, mainly due to obstinate management chains at other sites. Total lack of Senior leadership to let this go on for as long as it did.
The most egregious mistake Ursula made was throwing in the towel on American Workers and the technology business and reasoning that she could bet the future of the Xerox Technology business on an Indian partner. In 2010, Xerox signed an outsourcing deal with an Indian firm named HCL Technologies. HCL markets themselves as an Outsourcing Partner with top-notch engineering talent. This is bullshit.
As a company, HCL is a huckster. A pretender. An impostor. A swindler of the highest order. They promise quality talent and deliver individuals from diploma mills who can barely speak-a-da English They map out services they will deliver and then go missing for weeks at a time. They “take over” areas of responsibility and then when the bills for maintenance come due they forgot their checkbook. I know several people who approached the ‘partnership’ with an open mind, willing to give the Indian firm a chance. They were disappointed. While we were promised that supported would be a “mixture” of on-site personnel and some offshore, in no time at all it was 100% offshore and it sucked. I had two employees get denied their severance packages for opting out of the HCL experiment. Disappointing to watch good employees get treated so poorly by a VP on a power trip.
The HCL deal and watching it go down was the last straw for me. The Wilsonville site used to proudly boast that it employed about 1500 people who mainly focused on Solid Ink technology and were very proud of the products they produced. Pre-Ursula, on Saturdays, the parking lots used to be reasonably full. People wanted to come to work and put in extra hours for the company. These were some of the finest engineers in the world. But Ursula ushered in an era that changed all of that. Suddenly there was no incentive to work hard or innovate. As the bumper sticker says, the beatings will continue until morale improves. The whole thing is a lost opportunity to leverage the engineering talent you have, incentivize them to innovate your way to high growth. I believe this is what companies with a Technology person at the top actually do when faced with this same situation. When will the Xerox Board figure this out?
As of a few months ago, Ursula has essentially killed the Solid Ink product line. So she and her peers, along with Anne, invested a cool billion in a printer division, put another billion into it developing an A3 size engine for solid ink, and then just recently decided to throw the whole thing down the shitter.
Apparently the new model for printer development is to have the Xerox value-add be its brand name and to project manage the development process from afar. Xerox won’t really do any more of its own Engineering or development. That may be over-stated somewhat, but basically the new model is to slap an engine from an Asian partner on a controller board from who knows where, top it off with some software written primarily in India and you’ve got yourself a printer. Call me skeptical but I don’t think this will work and I truly pity the poor bastards left behind to do project management. I’d rather collect aluminum cans than be on the phone coordinating crappy deliverables from third-party companies who couldn’t care less.
So it’ll be interesting to see what Ursula’s legacy will be. The big question is, can the low margin services side of the business grow fast enough to cover up for the tanking technology side? If it can, she might get away with the madness and salvage her legacy. If not, look for another unflattering book on Xerox’s inability to take its innovations to market, with pictures of Ursula in the final chapters.