Changing of the Guard at Xerox: Who Cares?

Ann Mulcahy, CEO of Xerox, is retiring. Replacing her will be Ursula Burns.

Who cares?

As the nearby price chart of Xerox and the S&P500 Index displays, and a Wall Street Journal article on the subject noted, Mulcahy's tenure has been undistinguished.

Yes, I'm sure there will be those who assert that Mulcahy fended off bankruptcy and a difficult situation she inherited from her predecessor.

But that's not the measure of a successful CEO. Consistent outperformance of the always-and inexpensively available S&P500 is.

If an investor had bought Xerox stock upon Mulcahy's appointment as CEO in 2001, s/he would have been rewarded with a stagnant equity price, a performance only marginally better than the index, and not in a consistent manner.

Despite accolades for righting Xerox's financial condition and fostering printer technologies, her management of the company didn't really deliver any form of outsized returns to shareholders. It's not clear that Xerox shouldn't have died in 2001, its better-performing units sold to better-managed competitors or private equity shops.

Mulcahy's replacement, Ursula Burns has received publicity because of her gender and race. Again, so what? Noting those only propagates gender and racial bias. If she's qualified to be CEO of Xerox, why trumpet them? If not, do those attributes serve as special qualifiers?

It doesn't take a genius to see that a company that mainly focuses on print technology in an increasingly virtual, online technology world is probably not going to become a consistently superior performer again. If it did, it would be a true exception.

As the price chart shows, Xerox hasn't had a sustained period of market outperformance in the period from 1978 to the present. This is a company whose 'go-go' years were the 1960s. That's 40 years ago.

When I think of Xerox, I think of the company that punted away truly promising technologies in its once-famed Palo Alto Research Center. You know, those ideas which Apple's Steve Jobs incorporated into his firm's breakthrough personal computers.

Why anyone would pay special attention to a changing of stewards of a once-dynamic, now merely-average, backwater technology firm, is unclear to me.