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Posted by Henry Dewing on July 15, 2011
I just returned from Las Vegas where my meetings with Cisco executives, including John Chambers, Gary Moore, David Hsieh, Murali Sitaram, Kara Wilson, and OJ Winge, clearly demonstrated that Cisco is still moving forward. John Chambers and his team were in lockstep talking about two things: corporate strategic imperatives and organizational foundations for success
I believe that Cisco is sounding very much like a mature market leader as it balances risks and rewards in the rapidly changing markets for networking and collaboration. Precise financial measures got little talk time, but there were plenty of mentions that forward-looking statements do not supersede financial guidance given at regular updates — the team was focused on Cisco's plans to fuel future innovation, maintain its market position, and continue working on strategic relationship development with its most important customers.
John and the entire Cisco management team are focused on five corporate strategic imperatives:
- Core routing/switching innovation and optimization.
- Collaboration solutions.
- Virtualization (including data center and cloud) technologies.
- Video as a primary communication medium and IT task.
- Architecture — defining and delivering IT architecture for businesses and service providers.
Tactically, Cisco is on a diet to maintain its fighting trim as a market leader in a complex set of adjacent markets. The company is slimming down:
- To just three councils — enterprise, service provider, and emerging markets.Some boards, like the collaboration board, will continue to operate, but decision-making and accountability will be placed on the shoulders of product groups and market leads in the form of P&L responsibility. This should clarify some of the “if everyone is responsible, no one is accountable” behavior that the councils enabled/allowed over the past five years.
- To simple P&L objectives for accountable organizations.Within business groups, leaders are empowered and expected to surgically realign and adjust organizations, for example, bringing all three IOS development teams together into one organization
In the final Q&A, John Chambers said that Cisco will continue to innovate organically and inorganically; although, it will have more of a rifle shot approach and cannot afford to cast as wide a net with lower anticipated growth rates and margins compared with historical levels. Cisco is focusing on synergies and force optimizations to bring back some margin growth, which sounds very much like traditional scientific management from historical mature market leaders. Chambers has always talked about the need for tactical command and control even within the board and council structure, and with new COO Gary Moore at his side (literally by his side in our meeting and every other time I saw them), the pendulum has swung over to a command-and-control center of gravity with the councils reserved to set direction and act as Cisco-wide sounding boards — and not act as tactical planning boards.
Bottom line — I think John has a clear vision of where Cisco needs to go and how to get there. Cisco as a mature market leader is the new reality, and John is a mature CEO and leader; so, I expect to see him continue to steer Cisco through this turbulent market.
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