Former Xerox head calls calls for attitude change

Stressing change and the need for competitiveness, David Kearns, Deputy Secretary for the U.S. Department of Education and former CEO of Xerox Corporation, gave a dynamic lecture to a capacity Wharton crowd yesterday. Kearns said that in order for education and business to succeed, Americans have to develop a method for rewarding people who are catalysts for change and present innovative ideas that improve the way the system operates. According to Kearns, over the last 25 years Americans have lowered their expectations about what they can accomplish, a change in attitude which he said has had disastrous consequences in America's businesses and education system. Kearns said his visits to Japan were the motivating factor for his bringing change into Xerox in the early 1980s. "It was clear to me that what we needed was 17 percent productivity gains beyond inflation levels to catch up to the Japanese," said Kearns. "At that point in time [1982], I believed that Xerox would be out of business in 1990 unless serious changes were made." Kearns said he gathered the top management together, and they decided to use the issue of quality to change the business culture of Xerox. They developed their idea of total quality management from the summer of 1982 until February of 1983. Total quality management is a system in which employees have a greater role in business decisions. According to Kearns, the management had to change its behavior so that employees would see the difference and respond. What Kearns called "quality process for the 80s" eventually reached 100,000 employees, covered three years, and cost $175 million. Middle management was taught by senior management, and those middle managers in turn trained their staffs to follow this new business behavior model. Kearns said that the eventual results from this change were encouraging. While direct manufacturing personnel was cut 50 percent, productivity improved 14.6 percent and profits improved 7.5 percent. Kearns went on to draw parallels between the business world and the educational system. He said that in order to improve the country's education system, Americans must be willing to make changes and increase their expectations. According to Kearns, choice is becoming one of the transforming ideas in education and it will bear pressure on the system to change. He said he approves of more school autonomy that would let principals and teachers run their schools to respond to the communities in which they belong. "A strong nation must have a strong public school system," Kearns said. The audience responded favorably to the lecture. Mark Smith, a first-year MBA student, said he thought Kearns was the most dynamic speaker he has heard at Wharton. "I enjoyed his emphasis on our reduced level of productivity" Smith said. "I like the fact that he implemented quality management at Xerox not as part of a program but as an integral working system of the company." Smith echoed other students' reactions when he said he wished that Kearns would come back and teach a class at the University. Kearns gave the lecture as part of the Franklin Institute's National Memorial Award program. He was recognized by a nationally distinguished panel of business leaders with the Bower Award for Business Leadership. The award is granted to leaders in business or industry who have made a substantial contribution to society as well as promoting the interests of their industries.

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