Managed Document Services at Xerox: Handle with Care

Abstract

This public-sourced case offers the experiences of a storied American company to set the stage for an analysis of a company that missed some serious trends in the marketplace and a leader's change reputation within that context. The situation provides an opportunity to explore how to think about and approach a change that involved numerous complex issues such as new products, different competitors, cultural complacency, and people issues. In that regard, the case also provides an opportunity to examine two personnel change issues that every manager deals with—“fit” and “coach-ability.”The case opens with a newly appointed managing director, Tony Chen, chosen to lead Xerox's managed document services (MDS) division, reflecting on his confidence as already having turned around two other divisions at the company. There was a growing urgency within Xerox to implement change, and a new CEO was put in place to get it done. Chen knew that he faced an assignment that could make or break his career. He knew that change was needed, but what to change and how much to change seemed especially important in MDS. His mandate was both change but don't change at the same time. How to balance that tension is a major component in this case. Chen held concerns about one of his senior people to lead an initiative that seemed to be ignored, compensation issues, and whether he should rearrange or let some folks go. Making changes would include unpopular decisions and might just backfire this time. Excerpt UVA-OB-1321 Jul. 23, 2020 Managed Document Services at Xerox: Handle with Care It was February 1, 2019. Tony Chen pushed himself outside through the glass doors from the entrance lobby of Xerox Corporation's (Xerox's) headquarters in Norwalk, Connecticut, and strode to the Uber that would ferry him to his daughter's piano recital. He checked his smartwatch: 6:05 p.m. Family first, he thought. But his work wasn't even close to being done for the night. He'd gotten used to working late ever since Xerox's Vice Chairman and CEO John Visentin had hired him three months earlier to lead Xerox's managed document services (MDS) division. It was a plum job. The biggest opportunity of Chen's career. But it was a delicate one too. As the group's new general manager, Chen was responsible for nearly $ 3.5billion in revenues (Exhibit 1). He'd risen through the Xerox ranks after getting his MBA by asking tough questions, being willing to cut costs, and “breaking some glass.” The approach hadn't always made Chen popular, but he mixed a lot of optimism, charisma, and enthusiasm into his management style. Most importantly, it seemed to work. Chen had turned around two divisions within Xerox, most recently stabilizing a subsidiary of the IT outsourcing business Xerox had just spun off into a public company named Conduent Inc. (NASDAQ: CNDT). The spin-off of Conduent had been an idea pushed by activist shareholder Carl Icahn, who was the largest single shareholder of Xerox at 10.6%. Following that move, Xerox was left with three divisions that sold both products and services: MDS, workplace solutions, and graphic communications. And now Chen would be leading the only division with increasing sales. . . .