The Company Of Women; Women hold close to a third of top management jobs at Xerox. Inside the firm's 'kinder culture.'.(Cover Story)

Byline: Daniel McGinn

Leslie Varon's boss lived by a simple rule: if he was in the office, she should be, too. In the early 1990s Varon worked in finance at Xerox, and the department's VP was an old-style organization man. "You could set your watch by the hours this man worked," Varon says, recalling 12-hour days that often began at 7 a.m. For Varon and her colleagues, that meant missing family dinners. After much discontent, they called a meeting. Couldn't they take work home in order to get out in time for supper? The boss agreed, slowly growing to believe that an employee's value lies in her work, not the hours spent at her desk. As for Varon, her earlier departures don't seem to have impeded her career: today she's Xerox's finance VP.

Her status as a female officer would make her a rarity at many companies, but not at Xerox. The $15.7 billion document-management company is one of only nine in the Fortune 500 with a female CEO, but its gender diversity extends far beyond the corner office. Of Xerox's 32 corporate officers, eight are women. So are 800 of its middle managers, more than 30 percent of the total. The company is routinely ranked among the best places for women to work. Inside its Connecticut headquarters, female employees describe a culture where no one hesitates to reschedule a meeting to take a child to the pediatrician. Managers are judged--and compensated--on meeting diversity goals. At Xerox, "people really believe this--this is not cosmetic," says David Nadler, chairman of Mercer Delta Consulting, who worked with Xerox for 20 years. "They don't see diversity as somehow in conflict with meritocracy."

It's an attitude that began taking root nearly 40 years ago, when Xerox's top management became concerned about its treatment of black employees. By the 1970s Xerox was aggressively hiring blacks. And as feminism took hold, the company's progressive attitudes on race made it especially receptive to changes. But David Kearns, Xerox's CEO from 1982 to 1991, says he promoted women ...