Change is Challenging – A Perspective on Cisco’s New Management Structure

August 14, 2009 - 4 Comments

You may have seen a recent Wall Street Journal article on Cisco’s new management structure. In the article, I was quoted as saying the transition to this new structure has been a challenge for me. That is correct, it has been, but as the word ‘challenge’ certainly doesn’t reflect my overall perceptions, I wanted to share some more complete thoughts on how the new structure is working.Without sharing my age, I can say that I am definitely from the command-and-control school of management. That’s what I learned in Business School and that’s how I’ve operated throughout most of my career, but I can still wholeheartedly say that Cisco’s collaborative leadership model is working, and working successfully. In August last year I added co-leadership of the Small Business Council to my ‘day job’ leading our worldwide channels organization. The new role placed substantial additional demands on my time, to be sure, but that’s not the full story.Since I took on the Council role, I have reduced my travel by 50% without cutting back at all on partner engagement. In fact, I’m spending more time than ever with partners. How is that possible? Well, as my wife often says, “I don’t know what Web 2.0 is exactly, but I know you’re home for dinner more often.”Cisco TelePresence and Webex have enabled me to carve out the previously inefficient travel time that now allows me to do the Council role. Clearly, this is a good thing. I am happier, my family is happier, I am more productive. I am also spending more time with colleagues addressing the issues top-of-mind for the Councils. Take small business, for example. In the spring of ‘08 we recognized we could tap a $10 billion opportunity by better serving organizations with fewer than 100 employees. In less than two quarters, the Council was formed and shifted $100M in budget and some 500 engineering, marketing, sales and services headcount to focus on that market. In the subsequent two quarters, we expanded our small business networking portfolio to more than 100 products purpose-built for the segment. That‘s something we never could have accomplished in our older, more siloed structure. I am proud of that accomplishment and it is showing positive benefits to the company. Small business revenues have been considerably more resilient to the tough economy than many other parts of our business.And the near-term decision-making benefits of the new structure are clear too. In my most recent Council meeting, we formulated our country strategy for the new year . The cross-functional nature of the Council enabled us to immediately determine the impact of engaging more deeply in certain countries on functions such as sales, marketing and manufacturing, and we walked away from the table with a decision and a global strategy within a couple of hours. That doesn’t sound like slower decision making to me. All executives and employees at Cisco are busy and we thank our customers everyday that we can say that. We all have to manage our time effectively and with our CEO asking us to do more we have to be smarter and use technology to accomplish those objectives…or, delegate them to our teams. Empowering more and more Cisco employees to make decisions and execute on them to serve customers is the core to what we are doing at Cisco. Is it challenging? Yes. Is it effective? Absolutely.Given the growing interest in our new management structure, more of my colleagues will be blogging in the coming weeks on our collaborative leadership model. I encourage you to watch out for their posts. Thanks.

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  2. It’s amazing the speed that change is implemented at Cisco. People claim that large companies are slumbering giants and their smaller counterparts can quickly outmanouver them. From what i’ve been reading and hearing thisisn’t the case wit Cisco who appear to be very entrepreneurial for such a large company.

  3. Hi Keith,Got to admit that the financial results delivered by Cisco’s new Council-itis management structure are absolutely stunning; heck, Cisco sales, profits, and market share are all down.Now that’s what I call empowering!Sincerely,Brad Reese on CiscoNetworkWorld Cisco SubnetThe Independent Voice of Cisco Customers

  4. As an external vendor working with Cisco leaders and teams, I am witnessing firsthand the cultural and leadership transition underway. The downturn in FY09 provided a fantastic opportunity to put collaboration to the test. In my view, the leaders who held tight and remained committed to shifting their leadership style to a more collaborative approach versus those who reverted back to their ‘command and control’ tendencies are having a better experience, from both a business and personal perspective, and are achieving better results in terms of driving the business forward and developing the people around them. There are stories across theaters, organizations, and segments that bear this out. Thanks Keith for leading by example.