A copybook workaholic

LUNCH WITH BS/Xerox Modicorp MD Marcus Childs

Marcus Childs, managing director of Xerox Modicorp, is nervous ahead of this meeting because as he disarmingly admits, "I'm not quite used to doing interviews."

Bukhara, the Maurya's Indian food restaurant, is hardly the place to soothe the nerves. The first table we are assigned is in a draughty passage outside the kitchen.

The second is better located, but the low ethnic seating, some of it without backrests, proves a penance for anyone with bad knees or back, not to speak of the faulty acoustics that keep the decibel level in the room at railway station pitch.

Neither of us are keen on the assiduously promoted "Bill and Chelsea Platters" "" proud permanent fixtures from when the US President and his daughter stayed and ate at the hotel some years ago. Instead, at the maitre d's promptings we order jumbo tandoori prawns, chicken, a dal , naan and raita.

Only the first item proves worthy. The chicken is so dry I don't bother to offer it to my guest, and the dal, of which we take a token spoon each, is indistinguishable from dhaba fare, bar the price.

Child's stint in India, his first outside of Europe, has been a baptism by fire. He took charge in September 2002, soon after Xerox Modicorp had been buffeted by several controversies.

In that year, when American business was in the throes of one scandal after another, Xerox Corporation disclosed to the US Securities and Exchange Commission that its 68 per cent subsidiary in India had been paying bribes to government officials.

In January 2003, PricewaterhouseCoopers reported that the company had paid several hundred thousand dollars to taxmen to secure a favourable audit and described complex deals that involved much more worth of unaccounted cash. This, in turn, invited the attentions of the income tax and company affairs departments whose investigations are only just ending.

All this took place just as the performance of the US principal is slipping globally, as is that of its Indian subsidiary, and there's a tussle with the now New York-based joint venture partner B K Modi, who claims the US principal wants to drive down the value of Xerox Modicorp ahead of a buy-back.

Childs is eager to put all of that behind him. Of course, the negotiations with Modi continue "" though he says he's never met "the individual" and didn't want to get involved in that side of things. "I came here as a, hopefully, strong individual who could provide leadership and marketing, sales and servicing. That's what I was put in to do and that is what I've done," he says frankly.

In terms of sheer experience, Childs is well suited to the current challenges. He's been a "Xerox man", having been with the company for the past 17 years, almost exclusively in the UK and Europe, where he has done the drill from selling to training to heading a major division.

In a sense, though, Childs doesn't quite fit the standard CEO profile "" no formidable B-school degree, to start with. Instead, he's done a startling variety of jobs, from dustbin man to selling fruit and vegetable from the back of a lorry to teaching English literature and rugby.

Rugby, I pounce, happy at last to meet someone who follows the sport in this otherwise cricket-obsessed city, and we start discussing its intricacies. He wistfully recalls his own playing days when he was fit enough to run 100 metres in 11.5 seconds, claiming wryly that it would probably take him two or three minutes to cover the same distance today.

I suggest he must be over the moon after England won the rugby World Cup. "I'm glad you mentioned it," he jokes, "I didn't want to bring it up!"

We chat about the incredibly exciting final against Australia, which England won by the skin of its teeth. Childs was in Cornwall at the time, watching the game at 9 a m, UK time, with an ex-England rugby player. The occasion required starting out with a couple of beers "" "that's very unusual, by the way," he hastens to clarify. He saw the replays four times that day.

Rugby is clearly a religion. England's semi-finals against France was watched with a couple of Frenchmen at the tiger sanctuary of Ranthambore, and meant passing up a forest drive and the rarest of rare opportunities to see a tiger attempting a kill.

Though India marks his first stint outside Europe, the country is not new to him. He was here 18 years ago, trekking through the Himalayas as part of a back-pack crew travelling through Europe, India, Nepal, Thailand, Malaysia, Singapore, Australia and back. The trip was financed by teaching spoken English first in Portugal and then in Australia.

He was 27 years old when he returned, and with matrimony to his long-time girlfriend in mind, he decided to get "a proper job" "" which turned out to be in Xerox.

Childs is clearly a nuts-and-bolts strategy man. Putting things back together in India has been "incredibly complex" and, at first, a nightmare. All the same, it's patently a challenge he has relished and talks about with boyish enthusiasm "" so much so that I periodically need to stop asking questions to give him time to eat.

When he took charge, revenue was showing a 5 per cent negative growth and post-sales revenue (that is, usage charges such as paper, toner and so on) a 10 per cent negative growth.

As he explains, the ideal ratio of equipment to non-equipment sales should be 50:50. When he took charge of Xerox Modicorp it was 30:70, which was very unhealthy. "It means that if you're not generating fresh sales, you can't generate future annuities," he explains. Today, the ratio is a more respectable 60:40.

Overall, the result of all the overhauling has helped him add $ 15 million to the topline. "We have gone from an $ 86 million to $ 100 million company," he says with earnest pride.

This growth has earned Xerox Modicorp third ranking in the 23 developing country markets of which it forms a group, up from number 19.

How did he manage this? "It's been about putting the right people in the right jobs, putting in a structure that was closer to the customer, reducing the layers of managers and putting the best people in front of the customers," he says.

Nor did it require mass recruitment. He remembers discovering that some of the best sales and marketing people were sitting in head office. "My first reaction was: if you have a heavy head office and they're unempowered and demotivated, in a market that's growing "" it's crazy."

To streamline things, Childs has created four different themes to give people the ability to focus on certain segments of the market. To show how this has helped, he provides the example of the production business, a segment that includes machines that range from Rs 60 lakh to Rs 1.2 crore.

"In 2002 the company sold 14 of these machines and they felt pretty good about that "" but last year we sold 43, so that's a big chunk of the growth," Childs recalls.

But overall, Childs hope to focus on the small office-home office market, rural areas and small printers, a market that Hewlett-Packard (HP) dominates. He sees an opportunity in small printers because there's no "really big number two". He was in the process of meeting distributors to bulk up share in this market.

Looking back, Childs reckons he has achieved 70 per cent of the job. What was the biggest lesson he learnt from his 16 months in India, I ask. "That's a huge question," he says, pauses, thinks and provides an honest answer.

"One thing I thought I would be very good at was the ability to manage people. I've always been told that that's my great strength but actually it's been tested to the hilt here, through all the problems, all the changes and the demotivation. I've learnt even more so that that's the most important skill that you can have. When you're handling transition, you have to constantly be talking to people."

If constant communication hasn't been such an issue, it principally because Childs admits to being an unrepentant workaholic "" hitting the office at 8 a m and rarely leaving before 9 p m.

How did his wife and three small children "" two girls aged 12 and seven and a boy aged five "" handle this? He admits that it's been tough but Sarah, his wife, knew she wouldn't be seeing much of him. "She hasn't, so I've fulfilled my end of the contract "" unfortunately, she seems very happy!" he quips.

Still, he does look forward to the day he can play a little more golf and relax a bit once he has consolidated the gains in India. Or to put it in rugby parlance, he's scored a try. Now he has to convert.