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Interview of Everything: Cisco CEO Chambers on white boxes, SDN, leadership and the cloud

John Gallant | May 6, 2015
Outgoing Cisco CEO John Chambers says Internet of Everything starting to live up to its promise.

At the World Economic Forum it was one topic a year ago on a panel and this time there were 21 panels on it. You don't need to explain to [French Prime Minister Manuel] Valls or [German Chancellor Angela] Merkel or [UK Prime Minister David]Cameron or [Indian Prime Minister Narendra] Modi what this means to the future of their country. Very often, if they think of one player that can help them achieve this goal, it's going to be Cisco. If you watch, just as an example, when companies are thinking about what can you do to align with Cisco and you saw us put our best foot forward in terms of why we think they should do that, it's really working and the size of our deals are the biggest they've ever been. But when countries do that, that's never occurred before and it gives you an idea how much of the tipping point we are. We've got a very good opportunity to achieve the goal. It's now about execution. Most people would give us pretty good marks in vision and strategy.

You've mentioned a 30% leadership change within Cisco over two years. What drove that and what were the outcomes you were trying to get to?

This is why you always listen to your customers and your peers. What I've realized is most leaders cannot reinvent themselves at the CEO level or at the operational level. So as you make transformations at the speed that we're now doing, you have to probably change between 20% and 40% of your leaders and that's hard for me to say because, as you know, I'm very close to my leaders. For example, in engineering, as painful as it was, we changed 24 out of 92 of our top leaders [over the span of] two months. What I'm now telling my head of HR is I want to get ahead of this and figure out how to develop leaders because it's expensive to change a leader.

How do you institutionalize that? How are you making those decisions about who can and can't change?

We have a huge HR development program. We talk about how do we develop them, how do we develop the next-generation leaders, including the next CEO. How do you develop the next-generation operating committee leaders? We literally review it with the committee. We've been doing this for 10 years and especially for the last three in detail. It isn't just about succession planning, it's how many people are we getting in which areas. It's how you address some of the issues on diversity. It's hard work. You've got to be willing to put people into roles sometimes before they're ready and see how they do. In fairness, I'd say probably people did that with me about half a dozen times during my career. I thought I was ready. In hindsight, I didn't know what I didn't know, which wasn't bad. You've got to institutionalize that deep in the DNA and as a company, we've lost very few of our leaders except when it was time for them to be changed. We also do it in a way that you don't see an article by you all or on the front page of The Wall Street Journal about leadership changes. We just do it very smoothly and we treat people with respect on it. I lost very few of my top leaders that I wanted to keep.

 

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