Fortune Magazine recently published a thought piece by Xerox Chairman Anne Mulcahy(who retired from her CEO post July 1 after eight years at the helm) on the topic of innovation.

Mulcahy is one of those rare corporate leaders who has made tough decisions during tough times and lived to tell about it. She may have been, in fact, one of the most underrated CEOs in business over the course of the past decade. A few excerpts of her comments reveal why:

On the Past:

“When Xerox went through a downturn of its own making earlier this decade, everywhere I went, lenders and investors were demanding I cut our R&D; spending. But to me, Xerox innovation was sacred. Why avoid financial bankruptcy only to face technological bankruptcy down the road?”

On the Present:

“I know from experience one of the biggest mistakes that can be made right now is to slash investments in innovation. And by innovation, I don’t just mean product research and development. It can also be innovating in new markets, launching new businesses, and even disruptive innovation in work processes… In the cost-cutting discussions we’re having right now – and there are many – I remind my team that the next generation of technology and services will be born out of decisions we make at this unique moment in time.”

On the Future:

“To be sure, a company’s R&D; investment pool looks tempting in tough times. And draining it might save a few jobs or help make the quarterly results less painful. However, if you fail to fund the future, all you’ll be left with is a really lean company trying to churn old ideas into new business.”

Wise words, those. I hope she writes more.