Leadership At Cisco

Leadership @ Cisco

by

Pradeep Sundaram 2008136 PGSEM Section B

TABLE OF CONTENTS 1. ABSTRACT

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2. CISCO SYSTEMS INC

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2.1 BACKGROUND 2.2 LEADERS – PAST, PRESENT AND FUTURE 2.3 QUALITIES OF A LEADER @ CISCO 2.4 LEADERSHIP DEVELOPMENT AT CISCO

2.4.3 CISCO LEADERSHIP SERIES

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3 CONCLUSION

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4 BIBLIOGRAPHY

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2.4.1 TWO IN A BOX 2.4.2 EXECUTIVE DEVELOPMENT

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1. ABSTRACT Cisco Systems Inc is a worldwide leader in networking and communications technology. With a worldwide employee count of more than 66,000 and presence in many countries around the globe, Cisco is a company that has been successful in harnessing innovation and change to emerge as a successful organization. The goal of this paper is to identify the process of leadership development in Cisco in order to understand the basis of the strong leadership skills seen in the company.

2. CISCO SYSTEMS INC 2.1 BACKGROUND Cisco Systems Inc was founded in 1984 out of Silicon Valley, California. Started initially by married couple Len Bosack and Sandy Lerner, the company is today the biggest player in the market for networking equipment with more than 65% share in the worldwide core router (networking equipment) market. The company places a lot of emphasis on the culture of innovation, adventure and risk taking. Right from the mid 1990s Cisco’s growth has been fueled by acquisition of other smaller tech companies which typically have a workforce of a few hundred and are based out of Silicon Valley. The company has a standard framework for acquisition integration which it applies to the acquiring companies. Cisco Systems Inc was a of the poster child of the dot com era and is considered a very nimble company for its size. The method of acquisition fueled growth that the company is now famous for started in 1993 with the acquisition of Crescendo Communications. The number of companies acquired by Cisco today stands at a whopping 135. This mode of growth is seen as a key to the success of the company. The company prides itself for having successfully mastered the art of integrating acquired companies into the Cisco fold. For the record, the company states that more than 50% of its current employees are those who have successfully transitioned from the acquired companies.

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An oft-stated example of Cisco’s people integration skills is Charles Giancarlo. Charles Giancarlo joined Cisco as a part of the acquisition of Kalpana Inc in 1994. Giancarlo went on to become the Chief Development Officer of the company. Giancarlo had previously held the position of Vice President (Marketing) at Kalpana Inc. Cisco’s documented strategy of only acquiring companies which have a natural culture fit with the organization helps the company tap and retain most of the senior leadership from the acquired companies. The additional advantage of retaining leaders/managers from acquired company is that these are people who are already experienced with rapid change (in the form of acquisition) and hence are able to carry along the experience to the ever changing landscape of the technology industry. 2.2 LEADERS – PAST, PRESENT AND FUTURE The initial years of growth at Cisco were primarily based on innovation with emphasis on the entrepreneurial skills. So the early leaders are likely to have been entrepreneurs. Though there is no conclusive evidence of this, they are likely to have been from the engineering department in the company and would have fitted into the “Expert” category of leadership “action logic”. During the mid-90s and early 2000s the main basis of company profitability has been inorganic growth. This brought in a lot of new leadership from the acquired companies. These leaders brought with them, a whole gamut of experience in handling transitions. Hence the main source of leadership in this era of the comes from the Business Development Organization. There is ample evidence to support this with the last few stars of the company like Mike Volpi (ex-SVP of the Routing and Service Provider Technology Group) and Charles Giancarlo (ex-Chief Development Officer) all having had a successful stint in the Business Development. The class of leaders during these times can be classified as a mix of “Achiever” and “Strategist”.

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In the future, the company’s success formula is more likely to stress on both productivity and growth. There will be continued focus on integrating leaders who capable of bringing in new talent from acquired companies but the leadership development programs are likely to be focused on developing managers who can execute strategies successfully and hence the future leadership is likely to be made of “Achievers”. The leadership programs of the company tend to focus on this feature of strategic execution.

2.3 QUALITIES OF A LEADER @ CISCO C-LEAD Model:

Cisco follows the C-LEAD model which describes the five central themes of effective leadership Theme Collaborate Learn Execute Accelerate Disrupt

Description Working across boundaries, building teams, managing conflict, earning trust, and recognizing good performance Developing personal skills and coaching others Solving problems, making decisions, delegating, giving feedback, and demonstrating passion for the work Communicating goals and building capabilities Envisioning opportunities, innovating, taking risks, and leading change

Collaborate:

Of the above five themes, we shall focus on collaboration a bit further. Collaboration is a must-have feature of any leader in the company. Important reasons like large line of products, wide variety of markets, worldwide presence and multi-cultural ethos require that the leadership in the company collaborate with others to tap synergies for better business growth. The CEO John Chambers has been instrumental in driving this culture at Cisco. According to Todd Thomas’s article

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on Mr.Chamber’s leadership at www.thestreet.com the rationale behind this decision by Mr.Chambers is as follows, Organizations that are focused on a central decision-maker -- the imperial leader -- are (a) slow and (b) overly dependent on the wisdom of one person. This works in an industrial age where direction from the top ensures a smoothly running process with each person performing their specific task in concert with other persons doing theirs. But in the information age, the age of the knowledge worker, collaboration and engagement at all levels is where synergy is created

Additionally, the following traits are also seen as an indicator of potential leaders. Stellar Track Record: As with every other company, stellar track record is seen as an indicator of potential leaders in the company. Cisco follows the “Grow Model” where the focus is on “grow the business”. The qualities of the “Grow Model” like customer relationship, focus on productivity, business knowledge, integrity, and judgment are seen to be highly desirable traits of future leaders. Transformational Leadership: Cisco Systems top management sees itself as a fast mover that is quick to take advantage of opportunities in the market as well as being able envision the course that the company needs to take in order to tap these opportunities. Consequentially, the company lays heavy emphasis on transformational leadership. All the top leaders are expected to handle transformation smoothly. This skill includes the ability to disrupt, which in the context of Cisco can be defined as the willingness to constructively challenge common practices as well as have the courage to share new ideas. The company believes in the following model of human change while performing transformations,

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Cross Functional Capability: The company history reveals that most of the top executives have performed cross functional roles in their career thus enhancing their overall perspective of the company operations as well as being able to take strategic decisions with all the stakeholders in mind.

2.4 LEADERSHIP DEVELOPMENT @ CISCO Cisco continues to maintain a robust leadership development strategy to groom future leaders of the company. In 2006 the total budget for leadership development in the company is around $10 Million. The following are some of the methods followed by the company for leadership development.

2.4.1 TWO-IN-A-BOX Succinctly put, “Two-In-A-Box” refers to the concept of giving two managers the same responsibilities and the same title, and making them share the work while implementing the strategy set forth for their division by upper management.

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Cisco subscribes to the “Two-In-A-Box” framework of leadership development. The various advantages of this strategy are, 1. It eases transitions. 2. Can be used in jobs that require multiple skills. 3. Increases the availability of senior management at the home office (when the other manager may be travelling) 4. Offers customers more access to senior management. 5. Helps in the role of mentoring. This last role mentioned above of mentoring is seen as a key to development of younger leadership in the company. More often than not, the Two-In-A-Box framework consists of one younger leader and another more experienced one. This provides opportunity for the newer leader to learn first-hand from the senior one. This concept however needs to be used judiciously as it can result in conflict of working styles, difference in perspectives and conflict of interests. The method to avoid such a problem would be to create a “Two-In-A-Box” team with complementary skills, for e.g. one being more experienced in technology while the other may be more business inclined.

2.4.2 EXECUTIVE DEVELOPMENT: The theme of Executive development focuses on “transforming leaders who will transform Cisco”. The programs of executive development at Cisco are, Executive Action Development Forum A 14-week process which helps align the vice-presidents to the strategic priorities of Cisco. This process is an example of the C-LEAD model with focus on Collaboration to gain a better understanding of market

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transitions as well as understand the disruptions necessary to successfully execute the new strategic priorities. Action Learning Forum This is the signature executive development program of Cisco. It brings together high-potential directors for 16 weeks of intense discussions. Working in teams, they develop strategies for new products, markets, and technologies, some of which result in new Cisco business units. The program emphasizes an action-learning approach in which participants develop financial models and go-to-market strategies for various business ideas in support of our emerging technologies group

2.4.3 CISCO LEADERSHIP SERIES The Cisco Leadership Series is a series of 4 leadership programs aimed at nurturing leadership capabilities in managers and individuals who exhibit a track record of high performance. Participants are nominated on the basis of job performance, leadership reviews, and development opportunities. The four leadership programs are Global Leader Program The intent of this program is to enhance the global mindset of the managers. It helps translate the Cisco’s global priorities into organizational goals. Global Technical Leader Program This program focuses on developing business-oriented technical leaders. Business Leader Program For manager-level employees, the Business Leader Program in the Cisco Leadership Series aims at strengthening knowledge in key business areas.

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Emerging Leader Program The Emerging Leader Program in the Cisco Leadership Series helps entry-level managers build their capabilities for personal leadership, teamwork, and staff development.

3. CONCLUSION Cisco follows many practices that help in sustaining and grooming leaders who are imperative for the success of the company. It ensures good leadership branding by use of electronic media to help managers internalize the priorities of organization. With the exit of a few top executives in the recent past, Cisco needs to ensure an uninterrupted pipeline of leadership to help continue its course of corporate success.

4. BIBLIOGRAPHY (i) (ii) (iii) (iv) (v) (vi)

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"The C-LEAD Model" – Cisco 2008 CSR Report "Executive Development" – Cisco 2008 CSR Report "Manager and High-Potential Development" - – Cisco 2008 CSR Report “The Leadership Advantage: How the Best Companies Are Developing Their Talent to Pave the Way for Future Success” - Robert M. Fulmer and Jared L. Bleak - 2007 "Companies Ask Managers To Share Work, Swap Ideas" - By Scott Thurm From The Wall Street Journal Online - http://hrdm.net/hr/viewtopic.php?f=7&t=32 "Leadership Matters: Cisco's Chambers Shows the Way" - Todd Thomas - 05/11/09 http://www.thestreet.com/story/10499175/2/leadership-matters-ciscos-chambers-shows-theway.html