Looking back to 1996, on her first senior job at Xerox—as VP of HR–Anne Mulcahy laughed gently. “The position was historically under-rated and bureaucratic—and, frankly, that reputation was earned.” In a few short years and plenty of hard work, she undid its bad reputation, giving lie to friends’ warning about the “corporate dead-end.”
In a few short years again, in 2001, this former, successful HR leader was named the Xerox CEO.
By the end of the decade she was hailed as one of America’s great corporate leaders for her dazzling, multi-billion dollar turnaround of the debt-swamped corporate behemoth.
Did HR Leadership Help Build This CEO?
Her strategy of relentless cost-cutting, organizational focus, and boosted innovation is now a well-known story. Less explored have been the sources of personal growth and knowledge that underpinned her exemplary leadership performance. And in particular, whether the unlikely stint in HR for this “accidental CEO” (as she was also called then) somehow contributed to the corporate achievements beside her name in today’s business school textbooks.
The question began our conversation. I wanted to look back to an earlier, less talent-intensive era—when women didn’t become CEOs and real leaders didn’t “waste time in HR.” Top jobs were for corporate-groomed, MBA-equipped men, coming up through finance, strategy or business unit leadership.
Looking Back On The “Dead-End” Job
“Anne, what were you thinking, joining HR in the ripeness of your career? Are there lessons for leaders today—and tomorrow—about the value of taking a job in the people function, en route to running a global corporation?”
She began her reply with some context. “Becoming CEO was not on my radar screen when I signed on to HR. It came into focus later, a convergence of several unpredictable circumstances, and after I had done a couple of other jobs at the company. And then I was in the right place at the right time.”
“Another executive brought in to lead an earlier restructuring of the company before me had utterly failed as a people leader. By about year 2000 the Board was really stuck—and decided an employee-oriented insider was needed to head Xerox after all the disappointment and turmoil. I also have to give credit to the mentoring and support of the Board and Paul Allaire, whom I had served as Chief of Staff in the transitional years just before that.
“But,” I pressed further, “did leading HR in the late 1990s still play some role in your leadership development?”
“Absolutely–but I didn’t fully realize how at the time. My career path at Xerox was pretty erratic. I never followed a traditional plan of development. I had done well in Sales for many years but I didn’t want to just keep climbing that ladder. I was looking for something new. HR was my first really senior position, and it taught me how to operate with other people at that level.”
Erratic Like A Fox
Looking back, Mulcahy imparted more logic and savvy to her “erratic career path” than she might have acknowledged at the time. Her learn-by-doing approach, if unconscious, targeted two critical branches of any corporate strategy: markets and the organization needed to serve them.
“What I took away from my sales experience was a deep understanding of Xerox customers–seeing through their eyes how to create value. When I was offered the HR job, it was a chance to learn through another set of eyes—Xerox people and the keepers of our company culture. I was always fascinated by issues of talent, organizational effectiveness, and leadership development. HR was my opportunity for that.”
Mulcahy further explained that her HR experience built key credibility for later leading the painful cost-cutting and organizational changes that ultimately rescued Xerox. “I always said when I started the turnaround, I had a lot of ‘leadership money in the bank’ to draw on. Without it, I never could have pushed through the changes we needed. My years in HR were a big part of how I built that up.”
Building Capital For The Leadership Bank
In fact, listening to her several stories, I sensed her HR service did not just help her build credibility; it also developed critical knowledge, relationships and an operating platform, all fundamental to this turnaround CEO. Borrowing from her own metaphor, I credit Anne’s HR leadership for three significant deposits to the Mulcahy account:
1. Network Capital: “It was my first global job, and for the recruiting, development, performance management, and diversity, HR was an ongoing opportunity to connect with leaders all over the world—heads of lines of business and all the geographies. They had to become my partner and I had to become theirs. I got a huge payoff from this network—especially senior leaders—all of whom became really important to me later as CEO.”
“Because of the nature of the work, it became a real network. I didn’t report to the other leaders, so the relationships were not about power. I built credibility by working together, side by side, with every one of them, on people issues. It was an opportunity to earn respect as a peer. It changed who I was in the company.”
Right People In the Right Jobs With The Right Feedback
2. Talent Development Capital: “I was determined not to do traditional HR—imposing process for process’ sake. I focused on impact—solving problems with people around the world about getting every right person in the right job, defined and evaluated the right way. It was building and upgrading an overall talent management system.”
“I had a few breakthroughs. The first was creating new expectations—and practices—around giving honest feedback. I discovered how few people were really being told where they stood in their performance, and then helped to get better. It was demoralizing and holding back performance everywhere. I pushed hard to change that—delivering the gift of honest, just-in-time, continuous feedback and improvement.”
“Second was talent alignment. Many of our people didn’t understand how their jobs fit with the strategy and goals of the company, and didn’t feel any real connection. We got a lot better at that, and people found it very refreshing.”
“Lastly was ensuring accountability among leaders to manage those things honestly and consistently. They couldn’t be bureaucratic or hide behind vague ‘pats on the back’ with their people. I had to learn how to challenge other leaders during talent reviews—while still being diplomatic, which is its own important leadership skill. I also had to model that kind of behavior myself. I reinforced those values when I became CEO. Everyone feels better working for an honest organization, especially when big sacrifices are being called for.”
An Army Who Wants To Work With You
3. Followership Capital: Between the network of relationships she built as head of HR, and the reputation she earned for getting things done—on time, fairly, and with visible commitment to the greater good of Xerox–Anne Mulcahy was creating a platform for more strategic responsibility. Organizational loyalty began to form behind her.
“I always had the idea that to be a leader you had to build up an army of people who wanted to work with you—be in your court, as opposed to just watching from afar, hoping you’ll fail. I learned the lesson first in Sales, but the global nature of HR was a much bigger opportunity to create that. As head of HR, I was changing our company values for the better—exciting our people who were so ready to perform and save Xerox. When the Board was looking for an internal CEO candidate in 2000, I represented the culture that people wanted a new leader to stand for.”
From The “What” To The “How”
Throughout our conversation, I continued to ask Anne not just what she had accomplished as head of HR, and why it mattered for her later leadership—but also how she did what she did. She answered simply but consistently: “There was no magic beyond setting high expectations with people, meeting those, and working to be a good partner. In the end, you succeed in this kind of role if you do it as a line job, not a staff assignment. You have to make a difference to the business and have impact, not just fill out forms.”
Is A Tour In HR A Must For Every CEO?
There’s growing recognition today that HR experience can indeed be helpful to any senior leader’s growth. Major companies (Nestle, Zurich Insurance, Philip Morris) now deliberately rotate senior talent through HR as part of their corporate talent development; and other CEOs with that experience are more frequently appearing on the global stage (e.g. Mary Barra, former CHRO and now CEO of GM).
I then asked Anne the obvious next question: “So should every would-be CEO do a stint in their company’s people department?”
Her reply, at first surprising, was eminently sensible. “It can certainly be helpful, and we certainly have to get away from thinking of HR as a dead-end: but I don’t think actually running that function is a necessary step for every leader.”
“What we do have to do is start emphasizing leaders who demonstrate good ‘human resource thinking’—not functional skills so much as good ‘human resources capability’—respecting people, treating them well, motivating them. And as a leader you have to want to have that capability and orientation, and do whatever you can to learn it. You don’t have to do sales to understand customers; you don’t have to do HR to understand respect for people. But both kinds of skills and knowledge are critical for any CEO to develop, to be successful today.”
Looking Ahead
I closed our conversation with one more question: “What about the future?”
She spoke with the confidence of someone who had learned much in the crucible of practice.
“A great HR sensibility and skillset are going to be even more critical tomorrow. Successful businesses always have to create some strategic differentiation. It’s becoming harder and harder to distinguish yourself in product, technology, or process. So much of the opportunity in the future—even more than today–will be based on the caliber of people. If you aspire to senior leadership—or any leadership—you’re going to have to get really good at developing that. Whether you do it as an actual functional HR leader or a virtual one, it’s got to become part of your skillset.”
Originally published on Forbes.com