The Xerox Diversion

In February of 1972 I was graduating from the Sloan School of Management with an SM degree in Management. I was off cycle because I had returned after my Navy service to finish 2 course requirements. I had spent 2 years prior to Navy active duty in trying to squeeze two master’s degrees, 1 year for Electrical Engineering and 2 years for Management, into those 2 years and fell a bit short.

The campus recruiting process is oriented toward the June graduates. The economy was down. Fortunately, I was able to interview with 4 good prospects and receive 3 offers – Arco in Denver, Humble Oil in Houston (the future Exxon), and Xerox in Rochester. I hadn’t heard from Hewlett-Packard Co. in Santa Clara, my first hope, when I felt I needed to decide.

The two oil company jobs were in IT, and that fit with my background. The Arco group was doing some fascinating things with bidding strategy based on geological data modeling, game theory, highly uncertain financial prospects, and behavioral analysis of competing bidders. But the hot company of 1972 was Xerox, and the job offer was in the finance department doing analysis work for strategic planning. That sounded awesome, and I accepted.

Just before I departed for Rochester, Hewlett-Packard called with a job offer. It was tempting. HP had a great reputation among electrical engineers, but otherwise was very much a niche company compared to the global titans. The main positive was the workplace environment coupled with distinctive contributions to its markets and customers. It was more intimate. But I felt I needed to keep my word with Xerox and had to decline.

I started my job at Xerox on the 26^th floor of the 29 story Xerox tower. The group I was part of must have been doing some very important work because there were oodles of MBA’s scurrying around and moaning about how many hours they had to work the previous week. It was really a form of bragging. The minimum seemed to be 70 hours to have bragging rights. The more significant question was just what were they doing? I’ll admit to being unsure of just what I was supposed to do.

There was an orientation, a few meetings, and a description of a key simulation model for evaluating new products and pricing plans. It sounded like a great model. Yet I was surprised to learn how it was being used, from a mathematical perspective. They would run a base case, then do incremental runs to see how alternatives would stack on the base case. A straightforward principle says that adding incremental results to a base case doesn’t give you good results in non-linear systems. You would be fooling yourself. I could never quite get my hands on the model to try it out. I had this instinct to prove the whole concept of incremental analysis was flawed and would lead to bad conclusions. It’s not a very endearing trait to be so eager to prove something wrong. A department senior manager was one of the developers of the model, so it’s probably good that I didn’t quite get to work with it.

But the bigger issue was the whole tone of the department.  It was depressed and anxious. On my first day, there was a farewell party. The main sentiment was “congratulations, you escaped!” There was also some buzz about an impending reorganization. Toward the start of my third week, a new VP for the department was named. He called together a department meeting. In it he addressed the tension between Finance and Marketing with the statement “and we’ll fight marketing until we are battered and bloodied.” Wow.

Finding a place to stay in Rochester was difficult, so at first, I was in temporary lodging. My wife Joan (former wife) had come up to help look, but we didn’t find something we liked. She went back to Boston for a while.

That job offer from HP was beginning to take up a fair amount of my thought. I was now having conversations with Joan about options. For both of us, Rochester didn’t look appealing, at least in February. I sought advice from my professors and the answer was – stick it out at least a year. Xerox is a great company.

By around day 16, I finally summoned the courage to call HP. “Hi, this is Bill Kampe, and is the job offer still open?” After all, I had declined. I knew the question would be “why are you changing your mind?”

I think my answer was reasonable. My prospective boss said they’d get back to me.

Meanwhile, that afternoon, the omens were clear. I needed to copy some document and the copier on our floor was out of service. I tried the floor below, same result. Then the floor below that. Then the floor above mine. Finally, nuts, I’ll just go to the executive floor, #29, and the fifth copier in a row was out of service. This is Xerox?

The next day, the answer from HP was “yes” and I accepted. Now I began to think about how to tell my Xerox boss and ultimately how to extract myself from Rochester. I believe it was on day 18 that I talked to him. That brought a few quick meetings with his boss as well, and I know they consulted Personnel. Everyone was very professional. I appreciated their effort to change my mind, and their acceptance of my decision. The exit process went smoothly the next day, Day 19.  I was on to new adventures in California.

I remain thankful for several lessons from this experience. One major lesson that I’ve tried to remember: plain language.  I’d been trying to describe some concerns to my boss about the analysis model and I was deep into the mathematical talk. He was an English major. His pointed yet graceful advice – Bill, if you want to explain a complex topic, you still need to find plain language to do it.

Epilogue

Seven years later, 1979, I was talking with my dad.  We had each read an article along the lines of “What went wrong at Xerox?”  There had been seven years of decline from the pinnacle and the company was struggling.  Small Japanese copiers were eroding the Xerox market. 

I realized I had been a fly on the wall in 1972, while the seeds of decay were planted.  Xerox had just acquired a computer company, SDS.  The integration and strategic intent failed.  There was the acquisition of a printer company, and that didn’t pay off. 

The biggest problem was the overwhelming success of Japanese desktop copiers.  They were far more convenient for users than the big high-speed, high-volume copiers that Xerox liked.

In 1972, Xerox had a project code-named DECOY, an acronym for DEsktop COpY(ier).  Many years later I heard consultants describe it as a sincere effort to respond to the small copier threat.  Yet in my brief time at Xerox, I had the distinct impression that DECOY was a self-deception.  It would show that Xerox took the threat seriously and was doing something about it.  The Xerox finance group was running its analysis model on DECOY.  I heard little enthusiasm for Project DECOY.  It seemed more along the lines that “we have to do this analysis so we can get back to our real business.” I can’t claim I heard those exact words, yet I believe that was the spirit.  The real excitement was around a project called Audri, which was a very high-volume copier intended for large reproduction centers in large companies.  It was the wrong bet.