How the power players do it - by Fortune senior editor at large Patricia Sellers

Behind Xerox's historic CEO handoff

September 16, 2009: 2:11 PM ET

By Beth Kowitt

In their first public conversation on their historic CEO handoff, Ursula Burns and Anne Mulcahy of Xerox (XRX) said the intensity and amount of attention it's received has really surprised them.

In July when Mulcahy, Xerox's chairman, stepped down as CEO and handed over the reins to Burns, it was the first woman-to-woman CEO succession in Fortune 500 history. Burns is also the first black woman to lead a Fortune 500 company.

"We were like, get over it," Mulcahy joked at Fortune's Most Powerful Women Summit.

While Mulcahy was dubbed the "Accidental CEO" in a 2003 Fortune article, Burns is the groomed leader whose succession was well planned and "startlingly seamless," said Mulcahy.

"The organization was just really comfortable with it," she added.

Mulcahy, an English major who led Xerox HR, said that her gaps were on the financial side. Burns, No. 9 on Fortune's Most Powerful Women list, is the mechanical engineer who came up through the product development side of the business. Mulcahy said that Burns is all about discipline, process, and logic.

"Ursula has an appetite for the tough assignments," Mulcahy said.

Now in the CEO role, Burns's focus is top-line revenue growth. The fourth quarter of 2008 wiped out an entire three quarters of progress for the company, she noted. "That's the unfinished business," she said.

When Mulcahy took over the company in 2000, Xerox had $17.1 billion in debt and $154 million in cash. The stock had fallen from $63.69 to $4.43, and the company had lost 90% of its market cap.

Mulcahy, who is credited with turning the company around, recounted cold-calling Warren Buffett (who was sitting in the front row of the audience at the summit) in the midst of the turmoil. She flew out to Omaha to meet with him.

"My No. 1 objective was, I was looking for money," she said.

Buffett told her he wasn't investing in technology, but he gave her the clarity of focusing on her customers and employees. He told her to get the results first and then tell the Xerox story.

Since Mulcahy stepped into the CEO role, Xerox has had the succession question on the table.

"It seems like it's so far off," she said. "I think boards really need to push the discussion as early as possible."

The preparation has allowed the succession to not become a distraction for the company. So while the outside world might be fixated on the Mulcahy-Burns handoff, the pair said at Xerox it's business as usual.

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The Fortune/U.S. State Department Global Women Leaders Mentoring Partnership brings rising-star women from countries around the world to the U.S. for three-week mentorships with participants of the annual Fortune Most Powerful Women Summit - among them Ursula Burns of Xerox, Laura Lang of Time Inc., Marissa Mayer of Yahoo, and Tory Burch.

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