Anne Mulcahy

The Xerox CEO talks about wielding power, making tough decisions and bringing the company back to life.

You've noted that business and government need to work together to solve social problems, and that you'd like to be involved in that. In what way? I do believe that the public-private partnership is the model for solving big issues.

The lack of a pipeline for math and science graduates; the implications of restricted access for doctorates in skills that should be welcomed inside this country; what's happened to government funding of research over the last three decades as a percentage of GDP -- there's a whole laundry list that needs to be addressed here in this country if we're not going to lose our technological dominance.

Government, education and business all have to play together to start to reverse the trend that we're seeing here. That's an opportunity for former CEOs and other business leaders to make a contribution -- use their business skills on behalf of solving some big public-policy challenges.

Where do you stand on the H-1B visa issue? We think that's a missed opportunity right now, and it's far too restrictive. We have great people who are returning to their native countries because of restrictions here, and who could have gone on to be U.S.-based technologists and researchers and contributors. Just at the time when we need to work harder to keep people in this country, we have less access than we've ever had before.

What is your response to unemployed IT workers who resent the H-1B program? You have to look at the jobs that have been created by people who have come into this country. If you look at the pipeline of people graduating from our universities, the majority of these folks in doctoral programs are foreign- based. It matters where jobs get created. These are the kinds of people that can actually create jobs, that aren't responsible for losing them.

How do we reverse the decline of the percentage of women in IT? Focus is hugely important. For example, I just spoke to 200 [Xerox summer] interns, and two out of five are women. But we need a bigger pipeline, in general. So one of the things Xerox focuses on is raising the interest in areas like math and science in secondary schools. We take our engineers out to the classroom and have "invention days." We invest in robotics competitions. Focusing on getting the best talent suggests you ought to be inclusive, and that means not just women, but [also] minorities.

Computerworld's annual IT salary survey shows that the gap in pay between men and women is hovering in the 10% to 12% range. To what do you attribute that gap, and how do we close it? Women sometimes don't have the tenure that their male counterparts have. I think you fix it by paying for results.

You're No. 2 on Fortune's 2007 Most Powerful Women list. What does that feel like? My identity is Xerox, and any feedback I get should be regarding my success at Xerox, not so much my stack ranking. I understand that with so few women in leadership positions, bringing attention to it is a good thing. But I think my identity has to be linked with Xerox and my performance for my constituencies there.

Is there anything you brought to the position simply by virtue of being female that enabled you to be more effective than your male predecessors had been? No. I like to think there are a lot of things I brought to the job that have equipped me to be successful at Xerox. But I don't attribute them to gender. If you suggest that you have inherent advantages, then you leave the door open for saying you have inherent disadvantages, and I think that's a slippery slope.

You've said that effective communication was the single most important component of your turnaround strategy. What was No. 2? Our investments in research and development. While we were making really tough decisions everywhere in the company, we knew that the long-term success of the company would only be sustained if we had a great pipeline of innovation.

What was the single toughest decision you've had to make? There were a lot of tough decisions. One of the most memorable [was] shutting down our consumer business. It's a business that I ran, I helped author. A business that could have had promise over time, but there wasn't time. Great people, a lot of promise. Always tough to do, but this one was kind of personal.

Can you identify a single best decision? I don't think so. I think that we turned the company around on a whole set of fundamental good business practices that we sustained for a long period. No magic formulas -- just hard work and great people who stay focused and can accomplish great things.

How about a single worst decision? There were plenty of less-than-perfect decisions. For us, the worst decision was no decision. It's the things you don't deal with. It's much easier to fix mistakes than to fix inaction.

How much are you investing in R&D, and where do you expect that investment to take you? We're investing as a company just under $1 billion annually. And we have a partner in Asia-Pacific, Fuji Xerox, who invests $600 million. Our two biggest pools of investment are transitioning the world to color and services. About 70% of our total R&D is in those two areas.

How high on your priority list is helping companies with power management and being more green? Very high. I was in Dublin two weeks ago. We brought together 200 very, very senior people, and the topic was sustainability. We have a very long history in being green -- literally decades. We invented things like remanufacturing and reuse. I think it's a huge opportunity. When you look at environmental impact and productivity, and -- quite frankly -- profit improvement, there's a very synergistic set of capabilities.

This version of this Q&A originally appeared in Computerworld's print edition.

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