May 5, 2011
Cisco Systems Inc. (Nasdaq: CSCO) is not getting rid of its boards and councils, as many had hoped, but at least it's going to have fewer of them.
On Thursday, Cisco announced the restructuring it had promised a month ago. In place of councils and boards that numbered in the dozens, Cisco will have three councils: one for the enterprise business, one for the service provider business, and one targeted at emerging countries.
In addition to being just plain smaller, the new structure focuses operations along the lines of customer types. That's in contrast to the fervent cross-pollination that Cisco was encouraging earlier, where executives could reach into one another's organizations at will.
There's also a dramatic change in engineering, as Senior Vice President Pankaj Patel (who runs Cisco's service provider business) is now helping lead that organization, alongside Chief Technology Office Padmasree Warrior. Video remains a primary engineering priority, with Senior Vice President Marthin de Beer being assigned to bring Cisco's Medianet architecture into all of its newer businesses.
Cisco's sales force will now be organized by region -- the Americas; Asia/Pacific; and Europe, the Middle East, and Africa -- and by customer segment within each region. These field operations, as Cisco calls them, are still being run by Executive Vice President Rob Lloyd. Finally, Cisco's services group will reorganize similarly, with Chief Operating Officer Gary Moore still in charge.
Why this matters
Presumably, the announcement is a case of things being stirred underneath the surface. To outside observers, the impact isn't as overt as the extinction of Flip cameras, but you'd assume that Cisco has simplified some of its internal processes this way. CEO John Chambers did note recently that Cisco had confused its employees, an apparent nod to all the diagonal lines in the company's org chart.
Patel's assignment to the engineering team appears to be an indictment of Warrior's performance as CTO since arriving in 2007.
That Cisco is still using the word "councils" suggests that the company isn't giving up entirely on the councils-and-boards structure. Some investors will be disappointed; that organizational structure seems to be the most criticized aspect of the company, now that Flip cameras are on the way out.
Our coverage of Cisco's organization and reorganization:
Reading Cisco's Signage
End of an Eos
Cisco Flips on Consumer Business
Cisco Starts Spring Cleaning
Cisco Signals Major Restructuring
Cisco Appoints COO
Consumers Clobber Cisco
Cisco's Bid for History
— Craig Matsumoto, West Coast Editor, Light Reading
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