Cisco's CEO John Chambers On How to Weather the Downturn

"If you watch what is occurring today, people are acting like the sky is falling," says Cisco CEO John Chambers. But he has learned through numerous economic downturns -- he cites 1993, 1997, 2001, and 2003 -- that it's entirely possible to come out stronger than you were before. "Every time, we have gained market share, and two years later, our customer and employee satisfaction was greater," he says. Here's his advice for facing tough times.

• "Focus on what we can influence, and not over- or underreact to things we cannot. It's a question of living in the world as it is, not the way we want it to be."

• Assess the damage externally -- vendors, customers, colleagues. "In 2001, we went to our customers in energy, manufacturing, and automotive, to name a few. We asked, 'How are you handling this?' "

• "Ask yourself, 'Is this a market-driven phenomenon or did we do it to ourselves?' " Based on the answers you get, formulate a response. "In 2001, our strategy was working extremely well before the downturn, and it seemed to be working from the customers' side, so we said it was 90-10. That turned out to be about right."

• Make a determination of how long this will last and how deep it is going to be. "Prepare yourself for it to be longer and deeper than you think. And then build flexibility to adjust quickly if you need to."

• Get ready for the upturn. "What's our vision for where this industry is going with or without us?" That, he says, is a five-year horizon. "What is our differentiated strategy within that vision?" That's a two- to four-year plan. "How are we going to execute in the next 12 to 18 months?"

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2 Comments

  • luyi sindw

    "Focus on what we can influence, and not over- or underreact to things we cannot", i agree with it, the Economic trends we can not influence directly but we can decide how hard we work, how to enjoy the every day.
    swf to wmv

  • Matt Clark

    The socialist management philosophy my take hold. It supports the middle 70% and really encourages the bottom 10% to continue on in an as usual fashion if you believe Welch's performance distribution. What does this do to the top 20%? This group carries the load of much of the organization below it. How are they motivated to continue to perform at that level?