Cisco's Bid for History

7:20 PM -- One of the more interesting revelations out of Tuesday's Cisco Systems Inc. (Nasdaq: CSCO) analyst day was just how jazzed CEO John Chambers is about the councils-and-board structure.

He's talked obsessively about the idea for a couple of years now, but there's something extra in his fervor lately. It's sounding as if he wants to start a revolution.

Chambers says Cisco spent seven years implementing this management structure, which replaces Cisco's top hierarchy with a council of executives, all peers, and a mesh of ad hoc boards that get created as new ideas or problems surface.

It's not decision-by-committee. It's closer to the opposite: no central planning, and executives tapping one another's teams at will to chase new projects. Hey, if it works well enough, maybe they won't need a CEO any more. (Wish I'd thought to suggest that to Chambers on Tuesday.)

There's a fervor that Chambers packs into the topic. "This is something that will be the future," he said during a lunchtime talk with the media. "It's how you interface to customers; it's how you interface to support; it's how you truly become, perhaps, the first global company."

By "global," I think he's talking about the spreading of the councils-and-boards structure throughout the company -- to near-autonomous operations in India and China, for instance -- and downward, to the individual employees. Instead of a lock-step military organization with one leader, you'd end up with a teeming, writhing, amoebic mass, spreading in all directions at once (or some similar metaphor that invokes less oozing). Cisco's Singapore offices are already adopting the model, Chambers said.

If it works, it'll be in all the business school textbooks. But how do you prove it works? Rapid-fire acquisitions and the creation of groups like Eos are nice, but they might not capture the imagination of executives outside high-tech.

Cisco needs numbers. It needs the evidence of 12 to 17 percent revenue growth per year, the target Chambers won't let go of. (See Cisco: HP, IBM Had Their Chance.)

Chambers's fans don't think of him as someone going after personal glory, and they may be right. But I think he does sense there's a legacy to be made here, for Cisco if not for himself. There's a lot riding on that 12 to 17 percent.

— Craig Matsumoto, West Coast Editor, Light Reading

jhawk810 12/5/2012 | 3:51:16 PM
re: Cisco's Bid for History First there was cloud computing, now cloud management. I like it! Wonder how they decide on who gets the biggest bonus?
Stevery 12/5/2012 | 3:51:15 PM
re: Cisco's Bid for History

I don't buy it at all.  Anyone who's been in the exec office can tell you about the insane level of politics there.

I see it as defanging all possible successors.  The fact that the board has approved this sort of action says that Chambers has them by the balls, because they are tacitly approving a lack-of-succession plan.

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