Xerox Appoints Burns as CEO

In a widely expected move that is nonetheless remarkable, Xerox on May 21 named Ursula Burns its next chief executive. Not only is Burns one of the very few female CEOs, she is also the first African American woman to head a public company as sizable as copier maker Xerox (XRX), which had sales of $17.6 billion last year. And to have one woman, outgoing CEO Anne Mulcahy, handing the reins of one of the largest U.S. companies to another woman is unprecedented.

The promotion of Burns, 50, was a long time in the making. Like General Electric (GE) and Johnson & Johnson (JNJ), Xerox is known for an emphasis on executive development. "It's about meritocracy and meritocracy writ large," says Ilene H. Lang, president and CEO of Catalyst, an advocacy group for women in business. "Here is a company that over decades has been able to see talent wherever it is, even in nontraditional places. That takes work and care and attention."

Burns' engineering capability and her experience in a range of Xerox businesses, including supply-chain management, will no doubt serve her well as she navigates in a recession that's cutting into sales. Having a nontraditional background may also help Burns better develop the next generation of leadership at Xerox, analysts say.

Developing Managerial TalentMulcahy, 56, and Burns are Xerox lifers. Mulcahy began her 33-year career as a Xerox sales representative in Boston in 1976. Burns, who holds a master's degree in mechanical engineering from Columbia University, joined four years later as a mechanical engineering summer intern and climbed the ladder to head up manufacturing and supply chain. In interviews, Burns has said she stayed on at Xerox during its sharp downturn in the early 2000s because of Mulcahy's leadership. Mulcahy, who will remain as chairman, said in a statement, "I joined Xerox because it offered a level playing field—a sales environment where meritocracy ruled. And I stayed because the values of the brand, the culture, and the people are so closely aligned with how I think every business should operate."

Burns was named president of Xerox in 2007. Tim Conlon, vice-president for HR at Xerox, said at the time that management succession had been a core focus of the company for his entire career of more than 30 years. "It's like pay-for-performance," Conlon said. "Everyone talks about it, but very few companies do it well." At Xerox, great amounts of time and effort are put into talent from the CEO down, and people are moved to different jobs to develop new skills, and sometimes jobs are created for them or modified to get them the experience they need.

Catalyst's Lang says more companies are getting better at cultivating leaders within their ranks. Even so, the number of women in top corporate roles remains low. Women make up just 15% of boards and 16% of corporate officers. Only 6% of top earners are women, and only 3% of board members are women of color.

Getting Sales Back UpMulcahy, the company's first female CEO, got the top spot in 2001, when Xerox was on the verge of bankruptcy. She fought her way out of it, stabilizing the business and refocusing it on higher-profit areas, including color printing, high-end customized printing, and services.

Burns, too, is taking over in challenging times. The company has not been immune to the economic downturn, and Burns will have to keep fighting to revive revenue. In April the company said first-quarter sales dropped 18%, to $3.6 billion, in part because of weakness in Europe and developing markets. Net income was just $49 million, though the company also noted it paid down a good amount of debt and expects cash flow of $1.3 billion this year.

Diversity of leadership carries competitive advantages, too, says Sylvia Ann Hewlett, founding president of the Center for Work-Life Policy. Hewlett's research shows that only 17% of the educated global workforce today is made up of white men. The rest are women or people of color. And Hewlett has found those groups more effective at leading global teams and better at managing the youngest part of the workforce. Catalyst has also found evidence that firms with women in leadership roles financially outperform those without. Says Hewlett: "There's something profoundly appropriate about finally having an African American CEO who's female."