photograph by Nigel Parry
"You won't have to depend on the CEO anymore," says Cisco's John Chambers. | photograph by Nigel Parry
Taken to its ambitious conclusion, Chambers wants customers to remake their companies in Cisco's image, a prospect possible only because of their dependence on Cisco technology. "Without changing the structure of your organization," Chambers told the analysts in September, "I would argue that [innovation] will not work."
For him, it was the earthquake in China last May that makes the best case for the power of his model. Tae Yoo, a 19-year Cisco veteran, supervises the company's social-responsibility efforts and sits on the China strategy board and the emerging-countries council. "I had always been a believer in collaboration," she says, but after the earthquake, "I saw it really happen. Our local team immediately mobilized, checking in with employees, customers, NGO partners. The council got people on the phone, on Telepresence, to give us a complete assessment of what was happening locally. We connected West China Hospital to a specialized trauma center in Maryland via the network." High-level medical centers from the other side of the world were able to weigh in on diagnostics remotely. Cisco employees were on the ground helping rural areas recover and rebuild homes and schools. Within 14 days, Yoo continues, "I walked over to the China board with a complete plan and $45 million to fund it." That number ultimately grew to north of $100 million. "Our business is growing 30% year over year there," Chambers says, adding that Cisco has committed to investing $16 billion in public-private partnerships in China. "No one has the reach and trust that we do. No one could offer the help that we could."
As we wind down our conversation, Chambers makes sure to let me know that, as revolutionary as he may sound, he's an old-fashioned guy at heart. He married his high-school sweetheart. Cisco employees are a family, he tells me. "We take care of each other." And Liar's Poker is just for fun: "I never gamble in business, ever."
Although he doesn't pick up on my socialism meme, when I compare the new Cisco with Star Trek's Borg, he stops me cold. (For readers unfamiliar with the Borg, it is a pseudo-race of beings who get assimilated into an interconnected "hive mind," losing all sense of self.) Chambers can't contain himself here. "No, no!" he bounces in his chair. "People still have their own individual personalities. In fact, the system depends on it!" He then unrolls a disturbingly detailed analysis of the Borg. I can't help but laugh. "Oh, I know what the Borg is," says Chambers, laughing along with me. "We are definitely not that!"
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Recent Comments | 123 Total
December 2, 2008 at 4:05pm by Traci Fenton
Thanks for the great article. Cisco socialist? Nope, I think they're becoming a model of a democratic company. Can this work outside of Cisco? Yes, and it already has. Our company, WorldBlu , publishes annually The WorldBlu List of Most Democratic Workplaces, which ranges from small to Fortune 500 companies (eg: Linden Lab, Pandora, BzzAgent, DaVita, Great Harvest Bread Company, Zingerman's and more).
It would be great to have Cisco apply for our award -- and hopefully make the List, further reinforcing that this is indeed the future of work.
Traci Fenton
Founder + President
WorldBlu, Inc.
December 6, 2008 at 10:34am by Dominik Zynis
Interesting article Cisco has been trying to do the collaboration thing for quite some time now, looks like it may be paying off.
I applaud Mr. Chambers for democratizing some of the decision making at Cisco which contributes to the use of their own technologies and allows them to practice what their sales people preach. However, the author of this article did a disservice to Cisco investors by claiming that the company is becoming socialist, and given its employees false-hope. Turning a corporation into a Socialist would ultimately mean that the corporate Gini coefficient for Cisco employees would show a drastic movement at a large expense to Mr. Chamber's and other top executives' yearly earnings.
I don't think we are there yet.
December 7, 2008 at 8:20pm by Barton Friedland
It's interesting how ideas take hold and are, like things, popular, based on who uses them and how they are presented. However, both the style of the article and the photography make it more of a marketing piece than a case study. Still, as a marketing piece, it does a great job explaining why these ideas are so important. For a more in-depth view, see Margaret Wheatley's work. Ricardo Semler's Semco has used this approach for years and many of the fundamental concepts discussed are seen in lean manufacturing and agile software development processes. It is good to see these steps taking place as well as further support for these principles to become more generalized. This follows from the thesis of our paper on strategy, organization, and process: http://www.luminousgroup.net/docs/Strategy,%20Organization,%20and%20Proc...
December 10, 2008 at 6:24am by James Gilbert
OK, you got the word "socialist" into big letters to get attention, but c'mon Ms. McGirt, socialists do the opposite of what Cisco is doing: They centralize everything. So, you're either being disingenuous or naive. One wishes Mr. Obama and our Congressional leaders would learn from John Chambers, but then that would empower the American people instead of themselves.
December 13, 2008 at 7:21pm by Nicholas Pontius
Great article. This is what is meant by a Learning Organization (ie: the 5th discipline). As a leader I want to know more about the boards and councils that were frequently mentioned. How do they work, Who is responsible and how is leadership shared at these boards and councils.
January 6, 2009 at 5:58pm by William Farnsworth
I found the article well written and a compelling read but I have to agree with Mr. Gilbert’s comment. I realize that socialism is very much in vogue these days so calling a system that is clearly portrayed as free enterprise, a socialist enterprise seems to be a bait-and-switch. On the other hand, if Ms. McGirt’s article can persuade industry and the federal government to practice Cisco’s brand of “socialism” there might be hope for us yet.
January 11, 2009 at 12:59am by Mark Dust
This is not "socialism", it is a great example of Shared Leadership. We must get away from the traditional top down leadership methodology which has been followed since the early 1900's. During the industrial revolution the top down approach worked very well because usually management were the only ones with an education. The workers were largely uneducated immigrants that didn't speak English. Today's companies are largely made up of Knowledge Workers who are highly educated and can lead themselves. The only false impression in this article is that Cisco is the only company that has discovered the power of Shared Leadership and John Chambers is the "guru" of this type of leadership. Several people are publishing research on Shared Leadership. One of the foremost thinkers on shared leadership is Craig L. Pearce. He has contributed many articles and books to this field of study. Check out Shared Leadership Reframing the Hows and Whys of Leadership, Craig L. Pearce and Jay A. Conger. Another author to explore this area is Charles C. Manz. He has published around 20 books on Self and Shared Leadership.
January 26, 2009 at 5:48pm by Paula Cassin
Ellen, I would agree with a lot of the commenters here - this is clearly not an example of 'socialism'.
In a socialist model, everyone pools their efforts and are rewarded based on 'need' rather than talent or skill or contribution. This is why they tend to fall apart- individuals inevitably stop making an effort when the rewards aren't there.
I assume that the company's leaders still are being remunerated at top-dog levels much higher than the rest of the company, in line with their responsibilities. What's happened is their individual incentives have been aligned to foster innovation and partnership and keep them from competing with peers for resources. Now they are aligned directly to their company's survival and ability to evolve, rather than to their division's budget numbers or outputs.
The more interesting part is the decentralization of decision-making that's underway. I'd be interested to know how employees are remunerated or incented to work this way - are they being rewarded individually (or even as individual teams) for the success of their efforts, or is it considered part of the job to collaborate and work on a myriad of fluid projects that constantly morph.
April 4, 2009 at 9:27am by David Weigelt
The writer of this article definitely does a disservice to herself and Cisco in her characterization of Cisco as socialist. That said, this is a nice glimpse into how democratizing leadership and innovation can transform a company and reap financial rewards. David Wolfe, the author of Firms of Endearment is currently working on a new book for which he explores how corporations needs to shift from Newtonian thinking to what he calls "Organic" or "Quantum" thinking. As the owner of a small company, I would love to hear how this works for small companies and how companies that operate in this manner assure that there will be tangible outcomes at the end of the day. My friend and mentor, Mr. Wolfe, would tell me that this is very Newtonian thinking on my part. I guess that's where 70/30 ratio (Shared Leadership vs. Command and Control) comes in.
--David Weigelt, CEO of Immersion Active and Co-Author of Dot Boom: Marketing to Baby Boomers through Meaningful Online Engagement
April 13, 2009 at 8:00am by Bob Jacobson
Good article, thoughtful comments.
The "socialism" tag isn't as off-base as some commenters make it out to be. Modern socialist theory and John Chambers' theory aren't that far apart. Its dogmatic to associate socialism only with the Soviet model of state socialism or our own sad experience with corporate socialism in the financial sector. Applying Cisco's model to socialism would improve it as much as it will improve management and innovation in a corporate setting. Smart is smart in any context.
April 13, 2009 at 8:02am by Bob Jacobson
Good article, thoughtful comments.
The "socialism" tag isn't as off-base as some commenters make it out to be. Modern socialist theory and John Chambers' theory aren't that far apart. It's dogmatic to associate socialism only with the Soviet model of state socialism or our own sad experience with corporate socialism in the financial sector. Applying Cisco's model to socialism would improve it as much as it will improve management and innovation in a corporate setting. Smart is smart in any context.
August 17, 2009 at 11:35pm by Nathanial Ann
Cisco socialist? Nope, I think they're becoming a model of a democratic company.
Good article, thoughtful comments.
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September 18, 2009 at 8:24pm by Anthony Burton
Honestly, I think he is doing a good job at running the company. Times are changing and so do the people who lead businesses. Hopefully all will go well.
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October 5, 2009 at 5:23am by Arnold Johnson
Chambers was actually voted the Most Powerful Person in Networking by Network World magazine amongst other accolades, such as the Distinguished Industry Leader Award from the IEEE and the My Boss is a Patriot award and the Above and Beyond award by the Employer Support of the Guard and Reserve (ESGR) for Cisco's exemplary treatment of employees deployed to military service. What a guy... Chris editor of alli reviews
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October 14, 2009 at 5:47am by Kaewjung Narak
Of all of the maturing tech giants that have struggled to keep investors interested in recent years (think Microsoft, Intel, Oracle, IBM), Cisco has arguably done the most impressive job of maintaining profits while building new growth opportunities. Darren editor of collectible action figures
October 17, 2009 at 11:23am by Howard Carl
An interesting take on things. I love the description of Cisco as "the plumber of the technology world". It's so apt, in a positive way. John Chambers and Cisco have clearly learned from the 2001 debacle, something many companies never recovered from. Howard the car broker.
October 28, 2009 at 8:49pm by Jim Smith
This is interesting. At least the CEO isn't making them all take illegal drugs.
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This is a great tale of how Cisco was able to sustain in global crisis. It gives insight into the management which was spread over 500 employees with a lot of discretion in making decisions. The department and the heads of the organization were integrated and worked collectively, thus reducing cost and saving resources. It believed in sharing knowledge within the organization and this was achieved through information shared on their extranet, which also promoted creativity and innovation. Cisco not only increased its profit but enhanced the idea of CSR by providing support to its business partner in times of natural calamity.