Dick Costolo took Twitter public last year. Jeff Bezos continues to transform Amazon into the “everything” retailer. Sergio Marchionne is resurrecting Chrysler. These men led their companies to impressive achievements in 2013. Still, in my book, no one accomplished more than Yahoo’s CEO Marissa Mayer, HP’s Meg Whitman and Xerox’s Ursula Burns. Here’s why:
Mayer faced an uphill battle when she was named CEO in the summer of 2012. Yahoo, once a promising player in the race for Internet riches, had been dusted by the likes of Google and Facebook. Despite the millions of users it had drawn over the years, I considered the Silicon Valley (Sunnyvale) company’s prospects as dead as a dial-up modem.
Clearly, Mayer doesn’t give a hoot what most people think. One of her first moves as Chief in 2013 was to ban Yahoo employees from working from home (and this in a region legendary companies were launched by people working in PJs out of their garage). The approach drew widespread criticism at first. But in Mayer’s mind, “to become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” she wrote in an internal memo. “That is why it is critical that we are all present in our offices.”
The move helped develop a culture of collaboration and devotion at Yahoo. Earnings have been improving ever since, and investors have bought into this young leader’s philosophy. Yahoo shares have more than doubled from $18.34 in January to $37.35 at the end of November.
And clearly, Mayer isn’t finished making moves that cut against the grain. On November 26, Yahoo announced it had hired ABC’s Katie Couric as global video news anchor for Yahoo.com. Some think luring an aging old media icon to a new media platform is a bit backwards. I’mnot so sure the young and aspirational audience that Yahoo (and most advertisers) covets will be attracted to Couric. But I admire Mayer for trying to shake up Yahoo. Couric is the latest in a stable of big-name journalists Mayer has lured to help attract eyeballs to Yahoo’s pages. She’s displaying strong leadership. As Couric said of Mayer in an interview with Glamour, “I like great leaders” … whether they come “in a skirt or in a suit”.
HP was down and all but out just a year ago. Bad deals made by CEO Meg Whitman‘s predecessors for enterprise computing companies EDS and Autonomy were dragging down the PC giant–not to mention Whitman’s difficulty remaking HP to compete in a world swiftly transitioning from PCs to tablets.
Whitman herself recently acknowledged to analysts: “This time last year I was feeling HP was falling dangerously behind. Our business units lacked a clear, crisp integrated strategy. Our innovation pipeline was there but wasn’t being commercialized.”
But Whitman has proven to be a determined leader, and HP began to find its stride in 2013. The latest evidence is the company’s Q4 financial results, released November 26th. Shares of HP jumped more than 6% in pre-market trading following the quarterly earnings report that topped Wall Street forecasts. The company reported $2 billion in net income for the fourth quarter, and $29.1 billion in revenue, both beating analysts’ estimates. HP shipped 13.7 million PCs last quarter, a slight bump up from last year.
Overall, HP ended the 2013 fiscal year with $112.3 billion in sales, down slightly from 2012. But, unlike last year, HP is finishing the year with a GAAP profit of $6.5 billion. That’s major improvement over last year, when HP took a combined $16 billion in asset write-downs for its two underperforming acquisitions (EDS and Autonomy).
Whitman’s turnaround of HP is far from complete, but progress in 2013 was palpable. While HP’s massive but stagnant printer division has made money, Whitman understands future growth lies elsewhere. Forget printers and PCs. She wants to turn HP into a major player in the corporate technology services market, now dominated by Oracle Corp, International Business Machines Corp and Cisco Systems Inc.
Internally, Whitman, who has been known to take a hands-on approach with corporate customers, is stressing the need for a “maniacal focus” on engaging and listening to clients.
In an interview with All Things Digital she said, “Though our multiyear journey continues, I am comfortable with the progress we are making.”
Ever since 2009, when Xerox’s Ursula Burns took over as CEO she’s been struggling to return this once iconic American business to a position of dominance. Well, when all is done, 2013 might be the year we look back on as the pivotal point. As Paulo Santos wrote in Seeking Alpha Xerox “is no longer a company reliant on legacy printers and copiers; it is slowly transforming itself into a services powerhouse.”
Chalk that up to Burns’ leadership. The company still has a ways to go, but it’s beginning to show strength in revenue growth, stock price performance (which nearly doubled on the year to $11.50), good cash flow from operations, expanding profit margins and growth in earnings per share.
Burns realizes that its Services segment should be the main money-maker in the future, and wants it to account for two-thirds of overall revenues by 2017. The sweet spot is business process outsourcing. Xerox is now the largest worldwide diversified business process outsourcing company.
Here’s what impresses me: Burns is focusing Xerox’s BPO business on healthcare services, which now accounts for 18% of the U.S. economy. Overall healthcare services are now responsible for $2.5 billion of Xerox’s $22 billion in annual revenue. Xerox already supports the top 20 commercial health plans in the United States, or two-thirds of the country’s insured population. It processes more than 900 million healthcare claims a year. This will likely increase and grow going forward, especially when coupled with an aging population.
Burns seems to be making the right bets. And because I know she’s a driven leader, I’m expecting Burns to cash in on her turnaround plan.