Name: SUCCESSION SPOTLIGHT: STEERING XEROX THROUGH A HIGH-STAKES DIGITAL REINVENTION
Uploaded: 2025-06-10
Duration: 15 min 13 s

Xerox CEO Steve Bandrowczak’s rise from working on the railroad to taking the helm of Xerox is the kind of career story that reads like a movie script. Now, as CEO of one of America’s most iconic brands, he’s leading a transformation that will define Xerox’s future—with AI at the center. In this candid conversation, Bandrowczak reveals how his hands-on operations background shaped his leadership style, why he believes AI is the key to unlocking a new era of workplace productivity, and what it really takes to steer a legacy company into the digital future. 

SUCCESSION SPOTLIGHT: STEERING XEROX THROUGH A HIGH-STAKES DIGITAL REINVENTION

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Next speaker hails from a company that is much more than a household name. It is a brand that is so iconic that it is used as a standard moniker for the product in its category. It's not a photocopy. It is a Xerox copy. But how do you bring a company that was founded in 1906 into the tech technological age of AI? That is exactly what CEO Steve Barazek is tackling today. This interview is part of our succession Spotlight series, as you'll hear about Steve's journey from humble beginnings as a railroad worker up through COO and now into CEO. Please welcome him to the stage along with Fortune's Dianne Brady. Hi everybody, um. So Steve, as Kristen mentioned, you know, Xerox has this mythic properties. I have to say in my own life, my dad used to play poker once a month with the head of Xerox Canada, and my first big feature in the US was on a guy named Rick Thoman way back, I think '99, and there are two things I remember. He said the word digital dreams and he liked French cooking, and here you are, 2018, your approach to be the present. COO for Xerox. Lots of history, lots of tough times too. What was your first reaction? What an incredible honor. Really an honor when you think about the iconic brands around the world and you think about the environments that we've built, the impact we've had on countries, on families, on environments, on the workplace, right, when you think about the mouse and you think about all the things that Xerox Xerox Park, how about the researched, but that was a case study. In lost opportunities. It is, it's got to tell a bunch of good things. They invented a variety of different technologies that ultimately other companies took to market, so we're still part of the foundation, right? So if you think about changing the workplace and the position that Xerox has had through the years around the world, and you think about the families, you think about the environment, you think about the jobs we've created, it's an honor to take on this brand and a famous sales force. Well, let me ask you, um, being in a CEO. because then you became CEO under quite tragic circumstances, you know, the CEO died when you had that vision initially going and you spent a couple of years in that job, you have to be aligned with the guy in charge. At what point did you say, OK, now it's my, my ballgame? What did you see as the opportunity for you to put your own imprint on it? Clearly, sadly when John passed, the CEO at the time, and I took the role of CEO in August of 23. Um, the world had changed. The office had changed. COVID had profoundly changed supply chains, what we saw with the Ukraine-Russia war and so lost $2 billion of top line, uh, when the company was going through COVID and the supply chain challenges. So when you think about it. It was a unique opportunity to think about how do we reposition Xerox for the future but still stay close to our values and what we've always done and we've always driven productivity in the workplace. So how do you think about the workplace in the future? Workplace when you're working from home, you're working from from Starbucks, you're working from the air around the world, and then you think about the dynamics of data. Whether it's AI, how we think about data with AI, how we think about changing the way we work with data and motion and sensors, so we had to come up with a view of how do we play in this world of print, but how do we diversify our revenue in the workplace and still become relevant to our clients. What was it that was different? I mentioned Rick Thoman in digital Dreams because he saw the power of the data that Xerox had, and of course there are many different leaders Ursula Burns, many great leaders at Xerox, but What is it that you see as the unique opportunity right now because you're facing a lot of headwinds and you're carrying on, so give us the vision. A big shift, right? We've become an OEM manufacturer of print, and we could generate back 1015 years ago, we could generate a billion dollars of revenue by the next great device. And so when I took the CEO role, I realized that we had to be client-focused, client-centric, meaning we needed to understand what was happening with our clients, what was happening with our partners. Everything that we did was taking digital information and putting it on paper and printing it out. Well, if you think about just paper as paper, you're losing the whole fact. Today AI without data is like a cell phone without a network connection, completely useless. We play in billions and billions of data environments today. And so we help our clients aggregate that data. It's physical data from paper to digital, whether it's data in motion, help them and then serve it up into AI world to be able to change the way that they work. You make it sound so easy, so let me just, I just want to talk a little bit about the environment. One thing that happens first when you're going through a profound change, a lot of companies go private and they sort of say. I'm so glad to have these people off my back, whether it's a shareholder activist, you had that share price that. The wind is in your face, if that's a good way to put it. What's the value of being a public company right now? Do you ever contemplate maybe this would be easier to do behind closed doors? Look, when you're reinventing a company, it is always a lot easier to do it private because you can do certain things that you can't do in a public world, very specifically quarter on quarter pressure. However, we rebuilt an incredible board. Our board today. Second to none with CTO from Dell, CTO from MasterCard. We have incredible people on our board. Tammy Irwin comes from Verizon, people who want to make this company successful, but more importantly, understand the shift from an OEM company to a services company and a software company, right? Our mixed shift will come from IT solutions, digital services, and then growing and expanding in our print arena. And so when you do that, you reinvent the board, you set your vision, but more importantly, I want to reward the shareholders that have stuck with us for so many years, right, as opposed to you go private, the people who are going to take advantage or get the most out of it is whoever acquires you from a private company. They will get all the upside. I'm taking my shareholders on that journey. But you're, but you're also making some tough choices, and I, and you, you recently suspended the dividend. It sounds like I'm putting you on the spot. You're actually a story of bravery. Let me step back. We'll talk about your dividend in a second. You started out as a railway worker and I, your, your backstory to me is probably one of the. I hate to say purest Horatio algebra, but talk a little bit. You grew up in Long Island. You worked in the railway, you went to school part time. You just did a commencement speech not long ago. I mean that must give you some grit for this situation. Yeah, Diane, I, I am a, a, you know, a rags a success story. I grew up, got disowned by my family at 16. Uh, was going from garbage to garbage scraps and getting enough money that I can get gas, put it into a car and I can go to a 2 year school at night while I was working full time. I worked on the Long Island Railroad and then ultimately got to this career and so that progression gives you a sense of I can go through. It took me 10 years to get my 2 year degree because I'm working at night part time. Um, and so, you know, during that progression, yeah, um, during that progression, you know, you learn an awful lot. You learn an awful lot about hard work, resilience, but more importantly, I don't fear anything. I don't fear anything. So as we're going through a transition and we think about hard times and the things we got to go through, because I've had that background and a lot of the team around me have had a very similar background, there's nothing that we fear. And so we don't worry about the quarter of a quarter of challenges, we don't worry about the challenges when you're going through a reinvention. I always say this and I said this publicly, reinvention is difficult, OK? And the hardest part of the second half of the reinvention, which is what we're starting right now, literally. But when you lay out everything that we've done to date, whether it's around how we changed our largest activists on our board, how we changed the board, how we donated Palo Alto Research Center to recent acquisitions, 30% of our revenue will come from non-print over the next 20. 4 months. All the things that we're doing growing in IT solutions in areas that people never would have thought of us as cybersecurity, security as a service, all those things you have to transition your company. If you got any fear and you worry about quarter over quarter challenges, you'll never get through it. Fearless in in an environment that's tough. Many people here are feeling it. Let's let's talk about Lexmark, for example. You need approval from both China and the US for that. Discuss how's that going? Yeah, look, Lex is owned by a Chinese company today. It's on the CFRus. We're taking two great American brands. If you remember, it came out of the IBM. Organization when they spun Les off. We're now putting two great American icon brands together and we're going to become a powerhouse in this industry, you know, we've got obviously regulatory approvals both on the US side, which was pretty much done. We'll get the China regulatory approvals done here in June and we'll put these two together. I am. We'll get these two companies together. Is there anything you want to say about tariffs? Look, I think tariffs today, everybody is dealing with tariffs. Everybody's dealing with not just tariffs, but the geopolitical and the economic issues that are around the world. We've been here 100 years. We've gone through the dot-com crisis, the financial crisis. We'll navigate through it. We'll be fine. Obviously the changing environment to which you're in, some people will thrive in it, some people will be challenged by it, but you know, we see it as an opportunity and we'll thrive through it. Talk about how you thrive in it, and I'd be remiss not to acknow it's a succession, you know, it's, it's a, so you went from the COO role to the CEO role. What did that feel like first of all, because all of a sudden you're in charge, you're now it's your company. Big challenge. Uh, you know, I was a CIO for many years and you always think you're ready for the next role. As a COO, you think you're ready for the next role. I've sat in board meetings as a CEO. I've sat in committee meetings. I've presented, I've made materials. The reality is, once you're in that seat. Dramatically different. OK. Building a board is different than working with a board. Owning committees is different than working and being on committees. And so when you go from a COO to a CEO, there's a dramatic shift, dramatic change. However, you bring a lot of experience with you. COOs drive change. COOs make cultural shifts, drive outputs. The difference is the CEO role is you're now the leader in the face of the company, right? So you've got to be able to drive the culture with shareholders, with employees, with partners, but more importantly, Understand the things that you did not know and the admission of the things that you did not know. So one of the things I would tell COOs who want to be CEOs, there are board classes. Go take a class on understanding how to be on the board. I do. I teach today. You know, um, what is your message to your students as to how to succeed in these roles? Yeah, I think there's a couple of things. First of all, I always start with today is the slowest change you'll ever be in our life, and you can either be slowest change. You either be fearful of change or you'd be excited. About change, right? And I know a lot of our audience is thinking about AI and where AI is going to fit. If you're not excited about that and realizing that you can change industries, you can change your companies, you will get changed, right? So the first thing is today is the greatest opportunity you may ever have. Second thing is you own your own destiny. You don't like it, look in the mirror. If you don't like what's there, you got to change it, right? And then the third the mirror, put down the mirror. Then the last piece is the wall. The last piece is, and I think all too many people don't realize is you have to own your own destiny. You've got to build it. I think one of the things that's unique about the situation you're in is you're continuing this path. Your stock price has taken a hit in part because you said no dividends. We need this money right now for this acquisition. That must be tough. Those, those are your bosses. Look, it's hard. Anytime you make a dividend change or anytime you make a shareholder policy shift change, but priorities change, right? Interest rates have significantly changed over the last 18 to 24 months. So we prioritize paying down debt. We prioritize getting the deal closed with Lexmark. We prioritize and shifted a little bit away from dividend, uh, in terms of what we paid previously as a percentage of our equity value. It'll come back. We'll be fine and, uh, we'll be just fine going in the future. Paint a vision for us. Of you said you're halfway through now. What does Xerox look like? I mean, I, I know we talk at the 30,000 ft level. How does it feel different? What is it that you want us to think of it still as a copier? Yeah, look, I think there's three areas. One is print is not dead. People don't realize the billions and billions of pages and print happens, uh, print on boxes, print on farmers, you know, pickets, rin happens still a tremendous amount. But more importantly, if you think about print. There is a tremendous amount of value in print, whether it's around marketing, whether it's around legal docs, and Xerox will play in intelligent documents, right? The documents are there, there's intelligence on it. How do we take that information and serve it up to industries, law firms, uh, universities, hospitals. We're gonna play in hospitals like we've never played in hospitals before in law firms. So that's the first piece. Second, IT solutions. People don't realize we now have, you know, a large IT solutions business that is. Growing significantly in cyber as a service. Security is a service desktop is a service. We are platinum with some of the largest OEMs, whether it's Dell, HP, HPE, Cisco, Palo Alto Networks, right? And so we're driving and helping our clients specifically in the mid-market that don't have the capabilities to be able to go through these technology advancements. The last piece is digital services. We play significantly in the world of AI with digital services. Why? Because there's a tremendous. The amount of data that's sitting on paper. How do you take that paper? How do you take your SharePoint documents? How do you take all the information you have, serve it up to an LLM privately with your data so that you can actually have actionable outcomes. Now we have about 53 seconds left as you can see you've worked at places like Nortel, Lenovo. You've been in brands that have been in trouble. What, what, what have you learned about that that you would convey to others about leading through these tough times? You've got to love it. You gotta love change. Uh, you gotta love, I mean, I'm prideful about building Lenovo. When Lenovo came out of IBM, uh, it had a high, high degree of failure, high degree, uh, what we did at HP, what we did at DHL. I mean these are all brands that were a dramatically different set of companies before I arrived and not just me but the team, uh, and you created a brand that sustained, you know, you take a look at where Lenovo is today or HP is today or. DHL is today, uh, even we spun out a company out of Aon called the Light, uh, just extremely private, but you got to love it because it's happens and bring it on. That's your, thank you very much. Please join me in thanking Steve. Great story.