Xerox Turnaround Provides Lessons for Obama's CTO During Economic Downturn

The New York Times had reported that president-elect Barack Obama would announce a national CTO today, but no one has been named as of yet.

Also unknown is just how much power the new CTO will wield–don’t expect rumours of Steve Jobs to come true if it’s just a powerless propaganda role.

This morning I spoke with Sophie Vandebroek, CTO of Xerox about some of the lessons learned during the Xerox turnaround over the past seven years. (The company turned a net income loss of $300 million in 2000 into a $1.1 billion profit in 2007.)

Her recommendations for the future US CTO:

  • Go green: Sustainable and environmentally-conscious technologies are a priority right now, and the US should be leading the charge in investing in and funding green research.
  • Go global: Work with other world leaders in increasing transparency and sharing knowledge.
  • Go long-term: Rebuild the foundation of science, technology, and math/engineering in the United States. Two-fold: 1) Allowing more high-tech H-1B visas to be awarded to deserving scientists will help US compete with countries that are churning out and retaining world-class engineers. 2) Increase the academic focus on these topics.

Sophie repeatedly emphasized a long-term view of R&D investment, despite the inevitable criticism. She repeated a quote from the Xerox CFO during the difficult times in early 2000’s: “Why should I rescue today by jeopardizing tomorrow?”

Xerox currently spends close to a billion dollars on R&D, and credits that with enabling them to pay off $17 billion in debt. And they continue to reap the benefits: Today, more than two-thirds of the company’s printers and document management offerings come from R&D projects launched amidst much criticism in the early 2000s.