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Can Xerox reinvent itself for another 100 years?

CEO Steve Bandrowczak thinks the office printer is where the workplace revolution begins.

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Illustration: Alex Parkin / The Verge

This week, we’re launching a special series featuring companies that have been in business for more than 100 years. Up first, I’m talking to Steve Bandrowczak, the CEO of Xerox, an iconic company that got started all the way back in 1906 as a manufacturer of photo paper and is, of course, best known for pioneering the copy machine.

Here in 2023, Xerox has moved well beyond paper. It now works with companies large and small to provide IT services: it optimizes workflows, manages data, automates parts of businesses, and yes, still fixes the printers.

Steve insists there’s still a lot in the world to print, and selling and servicing printers continues to be where Xerox begins its relationships with most customers. And fixing printers is getting high tech: Steve is excited about his new AR app that walks you through getting the copy machine working again so you don’t have to wait for a technician to come fix it. 

We also talked about the future of Xerox’s legendary Palo Alto Research Center, or PARC, whether Xerox wants more consolidation, and we even spitball some ideas about how to get Gen Z excited about printers. 

The first company in our centennial series — Xerox CEO Steve Bandrowczak, here we go.

The following transcript has been edited for clarity.

Steven Bandrowczak you are the CEO of Xerox. Welcome to Decoder.

It’s great to be here. I’m honored to be on your show.

I’m very excited to talk to you. We’re doing a series on companies that are over 100 years old, and Xerox is one of those companies. It has an enormous legacy in tech, in office culture, in American business history. There’s a lot to unpack. It has become several different kinds of companies over the years. Let’s start at the very beginning. What was it like for you to join a company with that kind of legacy? How much did you think about that history when you joined Xerox?

Look, it’s no secret that I joined to make Xerox successful for the next 100 years. The brand, the history, the rich heritage of our customers, of the employees, of the shareholders, and the impact we have on the daily lives of the people and the communities we’re in, were all extremely important to me. I took it on as a passion to make sure Xerox is positioned for the next 100 years.

You joined as COO, and there’s a little bit of activist investor drama that I want to get into there. But when you joined as COO and said, “Here’s for the next 100 years of Xerox,” were you thinking, “Okay, there’s a vision here that I believe in,” or were you thinking, “Boy, we have to come up with a 100-year plan to change the company”?

I saw a couple of things from the outside. First of all, there was free cash flow of over $1 billion. It was an industry that I thought needed to be consolidated. If you follow the strategy, we were working through a very difficult time, in terms of our relationship with Fuji Xerox and in terms of what had just happened with the board and previous CEO. It was obvious to me that the opportunity to consolidate the industry and reposition Xerox in the future was significant and right in front of us.

We spent a lot of time really working on that consolidation strategy, improving our free cash flow so that the balance sheet was ready for the consolidation and the activities we were looking for. Prior to COVID-19, we had made the opportunity to acquire HP. Xerox made the position of going a little bit more hostile in terms of creating a slate for taking over the HP board. Then obviously COVID-19 hit and we had to pull that offer. The last 30 months have been about holding onto the reins, but it really was a consolidation strategy when I joined the company.

I want to talk about that consolidation strategy and what you’ve had to do over the past few years of COVID-19 to come out of that. People are in or out of offices, and Xerox plays a huge role in all of that. But let’s just lay the foundation. I think people know Xerox most famously as a copier company, or maybe as a printer company. What are your lines of business now? What does Xerox do?

We’re still significantly in the office print business as well as the production business, but we have also grown other areas of our business, like IT services. Today, we have a very large IT services business which is mostly focused in the mid-market where customers don’t have the opportunity to bring the same enterprise resources to bear as the large enterprises do. You’d be surprised to know that we do robotics, AI, and cyber security as services. We can do CIO in a box, where we literally can help our enterprise customers across the business. 

You ask what gives us credibility and how we do that? Well, we already have the relationships in things like managed print services. We already have a technician and a sales team. I am inside of a university, a hospital, a church, or a law office. Now we’re bringing incremental services around IT services for things like payables and HR solutions, where you can bring in a resume and we can run it against your open jobs. We’re bringing a lot of the stuff we use internally to market our IT services. 

The second piece of the strategy is really thinking about workflow in verticals. We’re in large shops today. We understand their workflow because we understand their documents and their document flows. So, how do you bring solutions in and around our A3 devices or our office devices? Our A3 product has a GPU chip and a screen. When you have those two things, what solutions can you bring? 

We can bring things like translation services to schools and universities. If I’m a Dallas school district that is understaffed in administration and can’t handle the amount of students and can’t bring good, productive education, then I’m going to look for solutions. I can grade papers, I can do plagiarism against papers, I can do document translations to multiple languages, or I can have students speak in English then translate to Spanish. 

We also have a very large cloud business. Most people don’t recognize the amount of print that we store in the cloud. Obviously, the next layer is asking how you bring insight to those documents? How do you bring workflows to those documents?

The last piece is one we started more out of necessity, and it was a critical thing that we had to do. When COVID-19 hit, my technicians couldn’t go onto customer sites, so we started a product called CareAR, which uses augmented virtual reality, video instructions, and AI to do things like remote solve. Those are examples of things that we’re doing to try to grow in our non-core business.

There’s a really interesting split there. It’s something that started very physical. Xerox is a company that prints and copies the documents in your office. You’re saying, “Okay, the printers have become more complicated. I’m putting chips and screens in your office. Since I can now ship software to your office, the documents are going away and becoming virtual. I’m rolling out a suite of pretty high-end computing and consulting services in your office. I’m basically helping you manage documents — paper or virtual — across the company.” Do you think of Xerox as a documents business, as a consulting business? What’s your conception of the company?

Yes, and yes. We can and do handle documents, and we’re getting more into asking how you can unpack the value that’s in those documents. If you think about printing as just printing a piece of paper, I think about it differently. I think about the data that’s on that paper and being scanned each and every day in the devices. How do I start to bring insight and value to both documents and things that are scanned? We’re trying to drive workflow solutions and bring things like artificial intelligence on top of the documents and environment we’re in. We’re adding robotics, as well as other services, and insight to the documents that go through our devices.

We’ve had UiPath CEO, Daniel Dines, on the show, and we’ve talked a lot about robotic process automation. I think it’s under-covered in the broader tech and business landscape. It’s a huge business. That’s specifically what you mean, right? That automated document handling and translation between two different systems occurring?

It’s not just documents. I can scan a resume into my office device and I now have the information on it. What can I do with that? Well, I can simply load it into your back-end Workday solution or your back-end Oracle solution. I can use robotics or robotic process automation to do that. I can also add artificial intelligence on top of that, that says, “This is the type of person I’ve just received that resume from. Can I look against the attributes I need for that open position by using artificial intelligence to get a probability match?” 

Think about invoices or supply chain updates. Yes, it’s robotics as a service, and using UiPath to ingest documents into multiple systems. I can do the traditional swivel chair and enter data from one system to another. But as I’m doing that, I’m now adding AI and intelligence on top of that. With static data today, I can move information from one system to another. But think about data in motion, sensor data, supply chain data, and GPS data. 

How do you make this sale? Let’s say I’m a mid-size, Midwestern manufacturing company and I’ve been making bottles for 200 years. Xerox shows up and says, “Data in motion.” There’s a huge educational component here of, “What the hell are you talking about?” Then you have to sell it and show a return on adding a bunch of computers, complexities, and consultants to all of it. How do you show that return?

So, there are a couple of things. One, I think the macro trends are our friend right now. We’ve actually embraced the hybrid work environment. There is a new way of working, and we have to drive productivity in that new way of working, whether that’s around the remote worker or around the patients that don’t come into your clinic because you want to do things remotely. So, there’s a new way of working. How do you make work, work? We’ve been in that business for a long time and we embrace the hybrid work environment. That’s number one.

Number two, the macro trend of inflationary cost, especially on mid-size businesses, is incredibly challenging. Look, the big banks, the big auto industries, and the big enterprises all have IT organizations to drive productivity. Mid-market does not. Think about hospitals and schools. They’re all challenged with tremendous inflationary costs and labor challenges. We’re almost at full employment and yet there’s a tremendous amount of jobs out there that can’t be filled. So, what do we bring? We bring productivity solutions to help them with those particular challenges. 

Let’s break it down a little bit. When I go to a university or a hospital, how can I start doing the administrative tasks through technology? That is, bringing in patients, discharging patients, and thinking about pharmaceuticals and how we administer drugs. I can do all that with technology, and I can reduce the amount of labor that needs to go on those things. 

Those macro trends are helping us around customer success. We try to think about how we drive customer success to start the story with our customers, not with technology. You’ll overwhelm them if you start talking about UiPath or CrowdStrike. What’s their success? How do I help them with discharging patients faster? How do I think about getting more patients through the clinic faster? How do you impact law firms by getting things into the judicial system faster and with more accuracy? That’s how we start the conversation.

The beauty is that our customers trust our brand and our security. That’s a big thing, by the way, to trust us with security. You say, “Printers and security?” My printers are behind a firewall. I integrate into their security system to print, secure, and classify documents, and I make sure that we can redact things in law firms so it doesn’t print based on security. 

“My printers are behind a firewall.”

The other thing that’s important is that they love our technicians. They have been on site and they trust us. We are already a trusted name, brand, and technician, so we can say things like, “I can do Wi-Fi and robotics as a service.”

You have the guy who can fix the printer.


That’s like the most trusted person in the entire company: the guy who can fix the printer.

You got it. 

I love the idea that the printer is like a Trojan horse into this entire managed services operation you’re building. 

Print is important. Go into a Target or a Walmart or a Home Depot, walk down the shelves, and see all the print that’s done there. You’d be surprised how important print still is in retail and all these industries.

I have a sense of where Xerox is now. I eventually want to talk about where you’re going to take it, but let’s talk about how we arrived at this place first, specifically with you being the CEO of a 100-year-old company. It doesn’t matter what company it is, there’s always going to be a lot of drama on the inside when it’s a 100-year-old organization. There are lots of peaks and valleys. 

You came in at what we might think of as a valley. The previous administration of the company, like you said, had tried to pursue a joint venture with Fuji. Carl Icahn, who is a very famous activist investor, said, “No, you’re not doing that,” then took over the board and fired all those people. That’s when you came in. How did you reset the culture of the company in that moment? I mean, that’s a pretty massive change for an old brand. You’re the new leadership who’s saying, “This plan you had heard about before is out the window. We’re doing something else.” How did you manage that change?

I started with a couple of things. First, we are Xerox. There is pride in the heritage of who we are and where we came from. It’s not just technology, it’s not just printers, and it’s not just our products. It’s our employee resource group. It’s the Palo Alto Research Center that has created trillions of dollars of value around the world — not necessarily just for Xerox, but for other companies as well. They’re very famous in Silicon Valley for helping companies with products and services. You go to Silicon Valley today, it’s still one of the most proud locations that people visit. It’s our proud heritage of innovation.

Number two, we have the intelligence, the capability, and the technology to position ourselves for the next 100 years. Nobody thinks of us as doing things like AI, machine learning, or IoT data, but I have over 7 to 8 million connected devices out there. I am in the IoT world. I do have a cloud solution. 

The first thing was to get the entire environment and the employee base educated on what we have and where we’re going. It’s the same thing with our customers, by the way. When I talk to large telco customers about what we’re doing in the service industry, guess what? They have the same challenges. Fifty percent of my workforce is going to retire over the next three to five years. Fifty percent! How do you deal with that? How do you take a 30-day technician versus an experienced 30-year technician and close that knowledge gap? 

We created something called CareAR, with augmented virtual reality with AI. I’ll give you a real world example to show how we’re repositioning ourselves as a service company. Let’s say you get a call at home today — it could be Verizon, Comcast, or some other internet provider of choice. Typically, you would call up an 800 number and tell them, “Hey, I have a problem.” They’ll ask, “Okay, what’s your serial number, sir?” So you go into the closet and dig out a device to give a serial number. “Yes, you’re a very good, loyal customer. We’ll be there in two to five days. Oh yeah, by the way, it’ll be between 8AM and 12PM.”

Then the technician shows up. If the technician has 30 years of experience and has the right part, then you’re probably in good shape. If a technician shows up that doesn’t have all the experience or the right part, you typically have a second call. 

Let me tell you how that looks today in the Xerox world. One of my devices starts to fail and I have an error code. My error code automatically gets detected by my central support desk out in St. John’s. I then send my customer a CareAR link, which is an augmented virtual reality link, and it asks, “Can we do a link to help you with self-diagnosis?” 

By the way, inside my call center, I use artificial intelligence against my millions and millions of transactions in service. Now that I’ve solved the problem, I can bring the remote technician all my engineering notes with the top three ways to solve that problem. I’m using artificial intelligence to bring the best solution, and I’m using my customer in the field to start that whole process in terms of solving the problem. 

By the way, even if I can’t solve it with augmenting virtual reality, when I send out my technician, that whole session has already been stored. So when I show up at your house, I don’t start with, “What’s your problem?” I already know what’s going on. We’re changing the whole service experience, and that gets our employees excited. “Oh, we are in augmented virtual reality. We use AI.” 

When you see things and announcements that come out from Microsoft around AI, it’s like, “Guys, we’re already doing that. It’s embedded in our product, and we’re already using it.” That’s what gets the team excited. By the way, it recruits. It gives us the ability to go to universities to recruit talent and talk about what we’re doing here at Xerox.

Let me just ask about CareAR really quickly, because you mentioned it several times and you seem very proud of it. You’re talking about augmented and virtual reality. If you send me a link, I’m assuming I open the link on my phone and point my camera at the printer. It then highlights parts of the printer and says, “Check the toner, I’ve outlined it in green,” or, “Check the printer feed path, I’ve outlined it in green.” The phone is looking at the printer and guiding you through what you should fix.

“I also have a 3D model of that particular printer side by side.”

Correct. I also have a 3D model of that particular printer side by side. I can take you through the annotation of where you should look and what you should do on your live printer. I can say, “Don’t press that button. Here it is. Let me circle it. Go hit this button.” I can see what you see just as well as you can see the 3D drawing with an annotation.

To the audience on Decoder, this sounds like a dream. I get to fix the thing on my own and try a cool new thing my phone can do. I can finally use the lidar sensor on my iPhone 14 Pro Max, which nobody else uses for now. All this stuff is great. But for the average person, that’s a lot of learning to do. You have now offloaded a bunch of tasks, which may help them fix the problem faster, but you have to teach them that AR exists and that their phone has this capability. You also have to get them to download an app. Frankly, the hardest single thing in all of technology to do is to get someone to download an app, register for it, and jump through all of those hoops. How do you solve that problem?

Let me ask you a question. Do you want me to send a technician in two to three days between 8AM and 12PM, or do you want to start right now? It’s that self-solve, self-serve world that we’re in. Look, if you go to New York, you can watch taxis go by you 100 times, but you’ll think you had a great experience because you just waited for an Uber that’s 15 minutes away. You’re in control, right? 

People are very comfortable with the video piece of it, and we’re getting much more attraction in terms of people using it. It’s not 100 percent, because people are sometimes nervous about downloading something or they don’t want to use their own personal phone for work solutions. But where we do see the uptake, it is over 90 percent customer success. The reuse is also very high; 95 percent use it again.

Think about production shops. You go into a Staples or an Office Depot today and you can see the big production printers. If they’re not printing, they’re not making money. Those operators want things like CareAR; they don’t want to wait for a technician to come in. Certainly, when they do want a technician to come in, it needs to be for the hard stuff, and not just to fix a paper jam or something that I could have done on my own.

So you came in as COO in 2018. You put together a plan with the former COO, John Visentin, called Project Own It. I am always joking that Decoder is fundamentally a podcast about org charts. Walk me through what this project is and how you changed the structure of the company.

When I got to the company, one of the things that I said was we had to simplify everything we did end to end, and drive a faster velocity. We used Project Own It to do that. We have taken over $2 billion of costs out, but that wasn’t the end goal. Project Own It was about how we get more velocity in everything we do. How do we get simpler and easier to do business with? How do we get simpler internally? We had 2,000-plus IT applications running the business. When you have that many applications, you have bespoke processes and you have multiple ways of doing things. How do you simplify that? 

It was also about launching new products and services, because we knew that print was under a lot of pressure, even before COVID-19. It was declining two to three points per year, and it was on a steady down climb. Then obviously COVID-19 hit and accelerated that. 

Own It had two pieces to it. One was reinvesting in things that we needed for our company. CareAR was one of those things. IT services was another. At the same time, we had to really start looking at driving efficiencies for our company. Project Own It became both an internal and an external rallying cry. If you follow our investors and all the calls over the last four years, they asked very specifically about Project Own It. Why? It drives more cash flow and EBITDA expansion, and it obviously drove our stock price to rise pretty significantly prior to COVID-19.

I ask this question every time somebody comes in at the behest of an investor. This is the classic thing that an outside investor does. They take over a big chunk of the company, say your plan is wrong, get rid of the old administration, bring in new guys, and then the new guys cut costs to make the company more efficient. I mean, this is the entire game. Is that part of what you were setting out to do with Own It? Or was it, “This company is in a tailspin, we need to make it smaller so we can eventually make it bigger”?

No, it was to get it smaller so we could create the balance sheet that would allow us to consolidate the industry. We were very public with the number with HP. We thought there would be $2 billion of synergies, so we got a loan for $24 billion. We couldn’t get there until we got our own balance sheet right. We put over $2 billion on the balance sheet and got into the position where we could consolidate the industry. We wanted to be the consolidator, not the consolidated. So it was very important to us to get that balance sheet and the company right.

By the way, you can’t integrate two companies if you don’t have the foundation of a project like Own It. It put the discipline in place for how you drive projects, how you drive synergies, and how you drive rigorous change inside the company to rewire it. It’s the same thing when you put two companies together. I’ve had over 70 M&As in my background, if you didn’t know. I did the IBM PC spin-out and was part of the team that helped split HP. My background is big in M&A and integration. When I got here, it didn’t have that muscle or that energy. Project Own It was a part of putting that in the DNA of the company as well.

Let me just ask the dumbest version of this question. So Carl Icahn shows up and says, “This Fuji joint venture is stupid. I don’t want to do it. I’m getting rid of you guys and bringing in new guys. They’re going to get the right company ready for more M&A.” So why was Fuji the wrong choice here, and — even though it didn’t actually end up going through — why was HP the right choice?

When you put two companies together, you’re looking for a couple things. What are the synergies between the two companies? There’s geography synergies, product synergies, synergies on back-office infrastructure, et cetera. For me, HP was the perfect synergistic play for the two companies. From a product standpoint, they were really good in A4 and we were really good in A3. We also aligned pretty well geographically. We publicly talked about the over $2 billion of value we thought we could generate there. 

On the Fuji deal, the reality was that the shareholders, specifically our largest shareholder, did not see the value for the current Xerox shareholders to put the two companies together. It was the economics of the deal. I can’t speak for our largest shareholder, but obviously the economics of the deal didn’t make sense. They voted it down and wanted to bring in a new team to go in a different direction.

How often do you talk to Carl now? I mean, you’re the CEO of the company and he’s still your largest shareholder. You’ve had to change the plan. Are you checking in?

For sure. I check in with all my largest shareholders, as well as the investors who are not shareholders today. “What’s the Xerox story? Where are you going? Is it just a print business? Is it just a dividend business? Where do you see the growth coming from?” So, yes, I do talk with them.

An enormously challenging part of this journey has to be that you came on as COO when John Visentin was CEO. He died very suddenly and very tragically young, and you became the CEO. First of all, I imagine that was incredibly difficult.

It was. John was a good friend. I knew him for 20-plus years and worked side by side with him. On June 28th, at 8PM, his wife, MJ, called me to tell me he had passed. She followed that by saying, “John loved you,” and that was probably one of the most emotional times in my life. Now I suddenly have to call HR and the legal team for a board meeting the next day, they put me in as interim. Then I have to notify John’s staff and employees. You can’t get out in front of the family because the family has to make public statements, and yet as a public company, we also have to make statements. It was extremely, extremely hard. It really was.

Crucially, for the first 48 hours, I didn’t think I wanted the job this way. I felt that personal attachment. But I have an incredible wife who kicked me in the butt and said, “Hey, this isn’t about you. This is about a company. This is about a great brand. This is about 25,000 employees. This is about all the customers and the communities we’re in. Put your pants on and go to work.” I’m very thankful the board has put me in this leadership role. But yes, it was extremely difficult to take the reins. 

Q3 for us was extremely difficult. It’s just emotional. Coming off of 30 months of dealing with supply chain issues, Ukraine-Russia issues, and all the other things we were challenged with, to then also lose the leader of our company… Q3 was rough. Thank God we’ve steadied the ship and turned around. We had a really good Q4 and the company is back on track.

Have you made any major changes to the plan or the roadmap since you became CEO, or are you still on the same track?

I made a couple. If you go back to our investor day back in January, just like a lot of the industry, we made some bets for longer-term horizons. We started a company around sensors on bridges called Eloque, which had a joint venture with the Australian government. We launched a little company called Mojave around HVAC technology and another around sensors in manufacturing called Novity. We also started a 3D business. All of those were three- to five-year horizons before the businesses would break even. They were costing us pretty significantly. In combination, we were running up millions of dollars per one and we were years away from breaking even. 

I had to pull that back for two reasons. Number one, the whole VC community and valuation had dramatically changed between January and July. The long putt and play on those things wasn’t as juicy as we thought it was going to be 18 months ago. Second, with the amount of cash we were burning in those longer horizons, I wanted to repurpose it and put it more towards near-term solutions that our customers could see in the relevant 24 or 36 months, as opposed to a three- to five-year horizon. That’s one of the biggest strategy changes we made.

We were in a group called Fittle, which is a finance business. We were using our balance sheet to finance it, and we had about $3 billion of assets and about $1 to $2 billion or so that rolled every year. We decided we weren’t going to use Xerox’s balance sheet, for a lot of different reasons. One, the interest rates have changed significantly compared to what we could borrow off our balance sheet, and we went and put some forward funding agreement. We used HPS, which now finances all of our leases going forward. What that does for us is create a significant amount of cash preservation on my side, that way I’m not using cash as we start to put leases in place. Those are the strategic shifts that we made.

It’s interesting you brought up interest rates. One of the things we cover quite a lot here at The Verge is that the culture of big tech companies is dramatically changing because the interest rates are high, and all of the FAANG companies are creatures of low to zero interest rates. You can see this having ripple effects throughout the culture of companies that I think most of us see as institutions. Xerox is 100 years old, and it has lived through many different interest rate environments. You talked about the big changes you made, like pulling back investments and rearchitecting entire lines of business because the interest rates have changed. How much has this changed the culture of Xerox?

It’s a resilient company. It was an easy switch for me. I have good friends who are in streaming businesses, and now all of a sudden, their challenge is to make the change from growth to now value. They don’t have the leadership or the capabilities to do that. I’m pretty fortunate here at Xerox; we are very resilient. 

“When COVID-19 hit, we lost $2 billion of top line overnight.“

When COVID-19 hit, we lost $2 billion of top line overnight. That first quarter was about literally trying to break even with cash flow, and we would not have been able to do it if we didn’t have a culture of resiliency. Supply chains and the Ukraine-Russia issues were pretty significant for us, not only in terms of the impact on our employees, but also the impact on our revenue and what was happening in the entire environment and ecosystem we were supporting in Russia. Supply chain, COVID-19, and the interest rates are, candidly, small water off a duck’s back compared to everything else we’ve been through as a company. I think we’re very resilient and capable of being able to navigate through some of these clear macro challenges we see out there.

Well, let me ask you, just philosophically, where that resiliency comes from. You weren’t the CEO the last time interest rates were high. You may have never even been in a C-suite the last time they were, and most of your employees have never experienced it. You’ve been talking about reinventing Xerox for most of this conversation, so the company is new compared to whatever it was 10, 50, 100 years ago. Where does that resiliency come from? Do people just walk through the halls looking at old pictures of the Xerox buildings?

I’ll give you two examples. I had two employees with anniversaries in January, one for their 50th year and one for their 45th year. So we have a lot of tenured employees, and employees that have seen a lot of changes through the years — the dotcom bust, the financial crisis, 9/11, you pick it. A lot of this team and this company have been through a lot of it and have resilience because of all that. 

You talk about the Fuji Xerox breakup and the emotion, losing the CEO, and the board fights and all that. That’s dramatic to an employee base. That’s dramatic to a company. You come out the other side of it resilient. When the interest rates hit, everybody just said, “Take a deep breath, we’re going to be okay. We’re going to be fine. Yes, this is inflationary and challenging, but we’re going to be just fine.” That’s the key that I see with the management team and the company. There’s no panic. It is a very resilient company, and candidly, we have a tremendous culture here that supports each other, both the employees and the communities we live in.

I tend to think that culture is a product of structure. As I keep saying, this is secretly a show about org charts. How is Xerox structured today? How have you structured the company?

We have two business unit leaders that run the regions. I have somebody that runs the Europe, Middle East and Africa unit and somebody that runs the Americas. I have a president COO that runs all of the support functions, and I have a traditional CFO and a Chief Human Resource Officer. The two regions run the P&L, and my president COO runs all the functions that support the P&L. So it’s pretty simple. It’s not overly complicated, and we do really well in matrix management. Does the product team own the P&L? Do the regions own the P&L? It’s pretty clear the regions own the P&L and the product team supports it. When we want to look at P&L byproducts or services, we can turn it upside-down pretty well. It’s a really good matrix organization. It’s less about the structure and more about the people.

“It’s less about the structure and more about the people.“

It’s funny. I feel like I could just roll the dice on whatever CEO and it’s like a 50 / 50 shot on that answer.

Look, I’ve worked in a German company. I was a global CIO for DHL. I worked for Nortel, a Canadian company, it was the first time in my career when I failed. I worked for Lenovo, which was a Beijing, China-based company. I will tell you, all of them had different attributes, different org charts, and it’s all about the leadership, the people, and the organization. I say all the time that I’d rather have all good B players who work well together to deal with anything that gets thrown their way, rather than a team of A players who are individuals that don’t have the right culture. It’s so important to have the right team and the right culture, especially as you go through the challenges we’ve gone through over the last 30 months.

The famous Andreessen line is, “Culture eats strategy for breakfast.” Is that what you’re getting at?

That’s exactly right.

Let me ask you the classic Decoder question. You have a lot of decisions to make. You had to decide whether you wanted to be the CEO of the company and if you wanted to change some of the roadmaps. You had to get through tremendous changes over the last two-plus years, and you even had to walk away from the HP deal. How do you make decisions?

First, the North Star is what’s right for our stakeholders. I really mean that. We look at that every day. Whether it’s employee decisions, shareholder decisions, or customer decisions, we make sure to focus on our stakeholders as number one. 

We do something called a four rolling quarter and a 12 rolling quarter. In other words, when we make decisions, it’s not just for the annual year-to-year P&L, it’s also in line with where we’re going over the next three years. You could make a decision with a product or a decision in IT, but strategically it has to be really good for the fiscal year you’re in as well as the next three years. We try to look at it both in terms of four-quarter and 12-quarter planning when we make those big decisions. Number one, does this combination strategically get us where we want to be? Number two, does it allow us to hit and achieve our in-year goals?

The other thing I would say is that the hardest thing for people to do in this seat is to say “no.” How do you make that decision and how do you say no? I look at it and think about go-to-market products. Do I have the right attributes to launch products, to keep them in a country, to keep them within a certain company? If the answer is no, then we make the decision very quickly. 

It’s funny. If I ask the team, “How would I enter a market?” They will give you very specific things. It has to be number one to number two, it has to be growing, et cetera. They’ll give you all the attributes. I’ll ask, “Okay, do I have that attribute in country X, Y, Z in Europe? Why am I number five and not number two? Why do I have those same decisions?” I take that same criteria and I apply it against existing business. That allows me to ask, do I stay in or do I get out? Do I make a change to the strategy?

What do you think is the most important decision you have made at Xerox so far?

For me right now, it’s bringing in a president COO. I brought a number two in, which allowed me to focus on external — the customers, shareholders, talent, capital allocation. If I had my old job running supply chain, IT, and the day-to-day stuff, then I couldn’t be thinking strategically. 

Talent management is extremely important today. You talk about culture. How do I get the energy back? One of the things I talk about with the company is how we drive energy every day. I have a Senior Leadership Team of 100-plus employees or 100-plus leaders, and I say, “Your job every day is to drive energy. If you’re not driving energy, you’re sucking energy.” It’s that simple. “You can either be an energy driver or an energy sucker. What do you want to do?”

I mean that, because people want to come to a place that’s exciting and energetic. In the hybrid world, with not as many people in the office, how can you create an environment where people are excited? People want a purpose. They want to know that they’re working with people that make a difference in the world. I have to create that environment. I’ve spent a lot of time on the road driving that with customers, employees, and our investor base. 

How do you get talent? How do you get universities excited about coming to Xerox if they don’t know what we’re doing? We are spending time speaking with and at universities. My job is a lot more outward-facing than it was, and that’s probably the biggest and best decision I made. I brought on, I believe, one of the best in the industry, John Bruno. John was president COO at Aon and he did a great job over there. His background is with Merrill Lynch and driving companies like NCR, Symbol, and Cisco. He has a great background. I’m really proud of the team and what we have ahead of us.

I’m definitely going to steal the “energy giver, energy sucker” line. I can’t wait to tell my team about energy suckers. I’m thinking about it right now. I’m already two hours ahead in the next staff meeting. 

You were the COO, you took over for a CEO, and you’ve now hired a new COO. We actually end up talking about this classic “COO taking over for a CEO” transition a lot in Decoder. Sometimes it works well. Tim Cook took over for Steve Jobs, which works great and has been a legendary business success. Then sometimes Bob Iger comes back and says, “This was a disaster. I don’t want to do this.” That’s kind of a 50 / 50 shot, too. Have you thought about the fact that being a COO who takes over as CEO half the time might not work out?

“I never look back. Failure is not an option for me.“

You could probably tell by my energy that I look forward. I never look back. Failure is not an option for me. I never think about it that way. Do I do a lot of study and reading on first-year CEOs? Absolutely. Do I reach out to other CEOs? Bill McDermott is a really good friend over at ServiceNow and Greg Brown is a really good friend at Motorola. So do I reach out? Absolutely. What are the pitfalls? What do I need to do? What do I need to think about? 

It’s no different than taking over any job. I’ll be honest with you, I don’t think about the CEO role as a different job I step into. You need to make sure that you make your mark, have an impact on all aspects of the people that interact with you, and do the best you can each and every day. So I don’t look back and I don’t think about it. I think if I do my job to my fullest, we’re going to be just fine.

Clearly you have thought about it a little, right? You said your most important decision you made was hiring someone to replace you as COO. What’s the biggest thing you’ve had to change going from one role to the other?

Well, since I’ve been such a big operator, I think about how I was CIO for 30-plus years and president COO for several companies. I’m an operator by my very nature. I want to double-click and triple-click and get into every single detail. The reality is that I can’t do that anymore. I can’t do that and use the CEO role effectively. 

It’s interesting, because the board asked me during the interview process, “What type of CEO do you want to be?” They were really asking, “Do you want to be an operator, or do you want to be an outward-facing CEO?” I think my role was very clear upfront about me being the face of this company and being the face of where we’re going, whether it’s for employees, investors, or customers.

A lot of people don’t know what we’re doing. A lot of people say, “I didn’t know you guys had that business. I didn’t know you were doing this or that.” So we’re spending more time out there and more time on news channels. Xerox has a great brand, but it’s synonymous with print, right? I have to get the industry to understand that we are more than just print. We are in AI, augmented reality, machine learning, and robotics-as-a-service. We are driving things like cybersecurity and CIO in the box. These are things we’re doing that nobody would know about unless I spend time sharing them externally.

When I think about other companies of a similar vintage who have made that kind of transition, obviously IBM comes to mind. To a certain degree, HP comes to mind. These have become IT consultancies. Is that the long-term vision? Do you see print declining and that taking over for the future of Xerox?

Yeah, so I call it “and-and-and.” So it’ll be print, managed print services, digital services, IT services, and pure services. It’s a journey. Even if you go out three to five years from now, 25 percent of my revenue will be in new services. Balance will still be pretty adjoined to the core. Do you remember when the IBM PC spin-out was done and the debate was about laptops going away? Take a look at the IDC numbers on laptops.

Yeah, we’re all supposed to be using iPads right now.

Yeah? Well, what happened was that “and-and-and.” iPads, iPhones, and laptops — I have three devices sitting in front of me now. So we don’t have the either-or. There’s still a lot of print. Yes, print is declining. It’s no question that digitalization has accelerated that, but there’s a tremendous amount of print out there. 

We think about print in just one way. But think about your Starbucks cups or your packages that come in from Amazon. All of those have print on them. Think about the big retail stores, where you walk in and there’s a big advertisement. What happens when a big portion of that retail experience now comes through a box? How do you advertise in a box? There’s a lot of printing to be had. We still see 95 percent of the production print is in analog. Think about that. What happens when that all goes digital? It’s a tremendous opportunity.

It’s a Verge podcast, so I have to ask some very direct questions about consumer products and PARC. We can’t not talk about PARC on a Verge podcast. When people think about printers and they think about Xerox printers, they think about your consumer products. They’re not necessarily beloved. I don’t think consumer printers are the most beloved product category in the world. Do you think that is still an opportunity? Are you trying to get Gen Z to buy printers? Are you saying, “This is declining, and we’re just going to let it fade into the sunset”?

We have never been in the home printer business. We’ve always been in the office business, with small offices, large offices, and complex facilities. We have never been in the print business for end consumers. It’s not our market, and it’s not what we’ve done.

I’m thinking about the office printer. It’s an enterprise product, but the end user there is basically a consumer.

Oh, for sure. Again, that’s where you get to thinking about the GBU chip and screen as more than just a printer. “What else can I do with this device?” That’s where we have a tremendous amount of office value we can bring. 

But you’re right. If it’s just for print and scanning and it’s a multipurpose device in its old configuration, then for sure. Absolutely, digital transformation and disruption and the hybrid workforce are significantly disrupting that.

Have you thought about adding TikTok to the office printer to get Gen Z to use it more?

It’s funny, because one of the employee resource groups I sponsor is the young professionals group, and it’s like nails on a blackboard. I love them, and every 30 days I meet with them. It’s like, “When are you going to do TikTok, Steve? When?”

Put TikTok on the office printer.

Put TikTok on the office printer, man. I’m telling you! This is the opportunity!

Yes, exactly. They say, “When are we going to do NFTs? When are we going to do crypto, Steve?”

Don’t do that.

I made a pivot back when I first took this job. We didn’t do any podcasts internally. We didn’t do anything. Now I’ve started something called the Xerox Factor, where we do podcasts with the sales team, the product team, customers, and partners. We talk about subjects that are relevant that can teach people on the “how.” 

You asked a very good question about how we get mid-size customers to adopt these other technologies. I bring in sales technicians and the team, and ask, “Okay, how did you get that law firm to adapt robotic process automation? How did you get that hospital to adopt AI and what we’re doing? How’d you sell that digital services solution? What did you do?” I let them tell their story because that naturally resonates with other sales teams, and naturally resonates with other regions. 

I believe we have a tremendous customer base today. I can double my wallet share inside my existing customers by bringing products and services that already exist. I just have to do a better job telling the story and driving that customer’s success.

You have a chip and a screen. That chip could be running TikTok and that app could be showing it to you. If you do this, I’m taking a royalty.

I’ll take it to the team.

Most people think about printers as classic razors and blades. You sell the printer at cost and you make all the money on toner. Xerox is a fairly unique printer company, in that you sell toner and cartridges for other people’s products as well. That is a dicey zone, right? I mean, there are endless lawsuits and all kinds of shady dealings there. Is that a continuing business for you, or is it just about getting in the door to sell more services?

No. I go into an office building and they may have two or three products in there. They may have us, HP, Konica, and a couple of OEMs. They don’t want to deal with all the OEMs, so I go in and say, “I will manage your entire environment.” As your Konica or your HP goes off of lease or gets ready to get renewed, we’ll renew it with a Xerox product. But we will use genuine toner in their products, because we’re not going into third markets to bring toner. You’re using my technicians that are already on site and you’re getting original parts from the manufacturers. We’re not taking third world products into these environments. We’re taking it over, we’re managing it, we’re providing it as a service, and as the technology gets older and as the lease rolls off, we’re replacing it with Xerox equipment.

Do those companies do the same thing back to you?

Oh, for sure.

It seems like that’s ferociously competitive.

It is, except for one thing. We have one of the best service teams in the world. If you take a look at some of my competitors, they just stitch together a bunch of OEMs and a bunch of service companies. Most of my service is direct through my team. We service it with our team and with all the tools and capabilities we have. 

I talked about CareAR. Think about all the tools we have in terms of supply replenishment. It’s about understanding and knowing when your product is going to run out of supply. Your customer just wants to print. We make that very simple for them. They pay by the page. We deal with everything else.

Last couple questions here. I said I had to ask about PARC, which is legendary. I mean, this is where the graphical user interface and ethernet come from. We have a partnership with the Computer History Museum, and it feels like all we ever talk about with them is PARC. Xerox still runs PARC, so what do you want to get out of that organization?

There are two things with PARC. In its very nature, PARC is pure research and trying to solve some of the world’s most challenging problems. We would never try to solve an HVAC system if we were only thinking about pure print. The technology that they came up with, Mojave, was to recycle all the pollutants that come out of HVAC equipment by over 80 percent. Think about that. The world’s pollution that comes out of HVAC systems today is equal to the entire airline industry. We’ve created technology that potentially can improve that by 80 percent. It’s pure research for now. It’s not a product yet, it’s not built into carriers or Siemens products.

In addition to that, PARC tries to solve some of the challenges we have in the office environment or print environment. Think about digital print or print on surfaces like Amazon or Walmart packages. As it goes through their production system, can you print marketing material fast enough as it goes through their normal warehouse? You can’t slow that process down to print. Can we create print technology and capabilities that can be done at the same time as inline print?

We obviously do a lot of work with the Department of Defense and the government in specifically trying to solve some of their challenges. PARC isn’t always about just pure products at the end for Xerox. We solve a lot of the world’s challenges and problems through the innovation that we see inside of PARC.

Part of the model of PARC is licensing the IP and the innovations that come out of it to other companies.

For sure.

We’ve talked a lot about the balance sheet, the challenges, and the restructuring that you’ve done. Is it hard to justify, “Okay, we have a pure research arm here. Sometimes it hits and sometimes Steve Jobs walks away to make the Mac and that’s the end of that”?

It is. We’re one of the very few companies that’s still doing research for the sake of research. Now you think about some of the companies that have moved away from that model. We have clearly pulled in the oars, we don’t spend as much as we used to and we’ve pulled back. I gave you a couple examples of things that we’ve started up. One, we shut down. Two, we got outside money that was spun off and it’s now running on its own with venture capital money. We have done that and you have to balance it. 

It’s a lot different from five, six years ago in terms of the free cash that we were generating versus what we’re generating today. But the mission of PARC, what we’re trying to do with PARC, is still there. We’re still trying to solve some of the world’s challenges. It’s just a matter of how much we can invest in PARC to go do that. You’re absolutely right. As your core print business gets more and more challenged, it gives us less opportunity and less freedom to be able to do some of those things.

Is there any element where you just don’t want to be the CEO of a 100-year-old company that shut down Xerox PARC?

No. Driving this company today is exciting. By the way, we have another company up in Canada that has similar types of attributes to PARC. Would we potentially partner with somebody and do something different with PARC? For sure, but the legacy of PARC is extremely important. We are incredibly proud of what PARC and Xerox have done to impact the world, and we will continue that journey.

Last question. We started by saying, “Here’s a new plan. Here’s what we wanted to do.” A lot of it was consolidation, right? I mean, you became the CEO because of a plan to consolidate the industry. Then COVID-19 hit and it didn’t happen. You have bought a couple little companies along the way, and you said your background is M&A. Is that still the plan? Do you want there to be more consolidation in the spaces that Xerox is in?

There’s a couple of things. In my opinion, there are too many players in the industry, similarly to the laptop industry going back 15 years ago. Whether it was Gateway or Toshiba, there were numerous brands that were out there. I do believe this industry will consolidate. Prior to COVID-19, these companies had a valuation of X; COVID-19 hit, and now these companies have a valuation of Y.

Y has to be smaller than X, I’m assuming.

Much smaller. The market cap on these companies post-COVID-19, and certainly with the new print models we’re seeing, is significantly reduced. If you’re a buyer, you want to buy on the last 12 or 18 months’ performance. If you’re a seller, you’re saying, “Hey, we will get back to somewhere closer to 2019 levels. People need to get back to the office, we’ll see print rebound.” You have a very large gap between a buyer and a seller right now in terms of valuation. I think they’ll become closer as the new norm and new reality sets in. 

The second piece of that is the cash, the liquidity, that’s out there is not the same as it was back in January. You’re seeing buyer and seller further apart, and you’re seeing that the cash and liquidity is pretty challenging today. I think it’s going to be a little while before we see further consolidation in our industry. I still believe that the basic economics are that there are too many players in our industry.

Do you look at the Department of Justice saying, “All right, we have to stop all these mergers” as an obstacle to that plan?

It depends on the administration. I have to be honest with you, each administration has a different opinion on industry. I do think that the geopolitical challenges of what we’re seeing today, from Russia and certainly from China, will have a significant impact on the DOJ going forward and thinking about what industries need to look like. 

The DOJ is challenged, because who is a competitor? Is Amazon a competitor? There’s really a challenge with laws that go back to telcom days of Ma Bell and trying to think about how you can apply today’s technology and today’s competitiveness to those questions. Right now, it’s a tough environment to consolidate where you’re taking big companies and trying to put them together. The DOJ is taking a much closer look at these deals.

When you look over the course of 100 years, that in particular has maybe changed the most in terms of how we think about big business in this country. Hopefully we’ll talk again in another 100 years. That’s my plan. We’re going to live another 100 years so we can have this conversation again. Steve, this was great. Thank you so much for coming on Decoder.

Thanks for having me. It was a great conversation.

Decoder with Nilay Patel /

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