When you first got the C.E.O. job, did you talk to other executives who had been through a corporate near-death experience?

I talked to lots of C.E.O.’s, many of whom were our customers. I went to talk to Michael Capellas while he was going through the turnaround at Compaq. I went to talk to the C.E.O. of Motorola at the time, Chris Galvin. (See “Who Shot Motorola?”) You learn that almost every company has some time in the barrel, and there’s also a lot that can be learned from companies that actually survive and reinvent themselves and go through that.

Interestingly enough, I joined the board of Target in the late 1990s, and they had all sorts of issues. You don’t think about it now because they’ve had such a long run of wonderful results, but they were subject to a takeover offer. That was a learning lab for me, to watch Target focus on great marketing, great retailing, the discipline of running a great business. I had a front-row seat.

Did you get any advice when you took over that you completely ignored?
There were a lot of people who suggested that Xerox was a typical big corporation with a sluggish culture, and that you had to kill the culture if you were going to turn the company around. You had to destroy what Xerox had been and build it back up from the ashes. For me, that didn’t work. I was the culture. I’d been there already for 20-odd years.

The other thing is that there were a ton of people who suggested that we fix the financial problems as quickly as possible by reducing research and development. We had fully drawn on a $7 billion line of credit that was never intended to be drawn on. So it was really a panic situation for the banks. The vast majority of people said, “Pay that money back as quickly as possible or you’re not going to make it.” And we didn’t do that. We kind of strung the banks out. We used that money to buy time so that we could build a future while we were solving a lot of our operational problems.

You majored in English and ­journalism and had very little ­finance experience when you took over—and no C.F.O. How did you get through that?
I went to school with the financial team. One of the good things about being a little desperate is that you get very humble about asking for help. I had to be able to hold my own discussing accounting with the S.E.C. I had to make presentations to 58 bankers who wanted their $7 billion back. But we have tremendous financial talent in the company, and they were gracious enough to make sure I was well prepared. As a matter of fact, I got put on the Treasury Department’s accounting task force recently because I’m one of the few C.E.O.’s who actually know accounting.

You have things in your labs like invisible ink and erasable paper, which lets the print on the pages dissolve after a day or two so that they can be reused. Is part of your goal to reduce the amount of paper that companies use?
Absolutely. We want to help our customers print less. This is the information world, and content management is a very big deal. A lot of what we do in our services business is help people go from paper to digital, help people create content that’s searchable, help people really live in a world of smart documents versus dumb documents. Documents that actually have embedded intelligence in them.

You still sell copiers, but not very many of them.
We don’t sell any stand-alone copiers. Everything we sell is networked. Most of it is multifunctional. It copies, it prints, it scans, it faxes. So most of it is really part of the networked world. And almost half of what we sell is now full color.

You said that by 2008 you wanted 10 percent of the pages Xerox prints to be color, and right now you’re ahead of that. The company’s at 16 percent.
It’s going to be 100 percent, because the world we live in is in color. And color is growing by double digits right now. Also, digital technology is letting us do things like print-on-demand and one-to-one marketing. Offset printing, the method usually used for marketing materials, is a $400 billion market. Only a small slice of it has gone to digital. One of the things we’re starting to enter into is digital packaging for consumer-product companies. We recently did a demo for a gum wrapper. Consumers can create their own personalized packages, or companies can print regional versions or versions in different languages. It’s more flexible and it’s cheaper.

Xerox is not known for creative marketing or fun, splashy ads. Is that something you want to change?
We’re not a consumer company. Our thing isn’t going to be about ads at the Olympics. Our audience is a bit more targeted.