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Cisco's Patel Hails 'Microculture' Successes

Iain Morris
5/26/2016

AUSTIN, Texas -- Big Communications Event (BCE) -- A move to create small teams focused on individual projects is helping Cisco to speed up service development and gain traction with customers, according to Pankaj Patel, the equipment giant's departing chief development officer.

Patel, a Cisco Systems Inc. (Nasdaq: CSCO) veteran who is set to retire later this year, pioneered the concept of the "Alpha" project at Cisco, whereby a very small and dedicated team focuses all of its efforts on the development of a particular product or technology.

Presenting at this week's Big Communications Event in Austin, Patel revealed that five of the eight Alpha projects in existence have already begun shipping products to customers, and that his Alpha concept has inspired other parts of the business to launch similar initiatives.

Alpha Male
Cisco's Pankaj Patel reveals details of his Alpha project strategy during this week's Big Communications Event in Austin, Texas.
Cisco's Pankaj Patel reveals details of his Alpha project strategy during this week's Big Communications Event in Austin, Texas.

In total, Patel reckons there are 20 "small and nimble" team projects in addition to those that fall into the Alpha category, and he expects this number to grow to between 60 and 80 within a year or two.

Noting the impact on innovation, Patel revealed that an Alpha team focused on the development of cloud-scale networking had developed three brand-new platforms within just 14 months.

"That was a record time with a very small team and an incredible success, and, more importantly, it was developed with some customers from day one, so you know your chances of having it deployed are really high," he told conference attendees.

While the Alpha concept did not take shape at Cisco until about two years ago, Patel appears to have based it on his experiences at StrataCom , a vendor of ATM switching equipment that Cisco bought in 1996.

As StrataCom's architecture and product manager at the time of the Cisco acquisition, Patel led a small team of seven engineers and claims to have transformed the company's culture through his working methods.


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At Cisco, employees are encouraged to come up with "disruptive and innovative ideas," which are subsequently assessed by a small number of senior executives, including Patel.

"We go through ideas and pick a few, and when we do that we ask for a business leader and a technology leader to be named," said Patel. "They have to come up with a detailed project plan."

Alpha teams are subject to a number of restrictions, according to Patel, which include having to hire 50% of their "talent" from outside the organization. "You can think of it as an internal startup," he said.

Team members are also required to eat breakfast, lunch and dinner together on six days of the week, conference attendees were told.

Because the typical duration of an Alpha project is between 18 and 24 months, there seems a real likelihood that more will begin shipping products imminently.

Patel said that Alpha team members are rewarded "very differently" if projects turn out to be successful, without providing more specific details.

He also indicated there was strong sales support for the initiative from inside and outside the Cisco organization. "We have an 18,000-strong sales force and 80,000 partners and if the product works, they are going to sell it," he said.

With more than 70,000 employees globally, Cisco saw revenues for its third quarter (covering the February-to-April period) shrink by 1%, to $12 billion, with net earnings falling by 4%, to $2.3 billion.

Like other big players in the network equipment industry, the company is increasingly focused on the sale of software and services, particularly given the "challenging environment" in its traditional markets during the first few months of the year.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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danielcawrey
danielcawrey
5/30/2016 | 5:20:54 PM
Re: Seriously?
Aside from the possible work-life balance issues here, I think this is a good idea. The problem with larger organizations and innovation is that there are too many cooks in the kitchen to make real progress. This microculture idea is a good one to try to avoid a problem that plagues big companies. 
brooks7
brooks7
5/28/2016 | 10:22:58 AM
Re: Seriously?
Doesn't matter.

That is the trade-off...its a gamble.  You trade a few years of your life to make life changing money as a possibility.

Can you imagine trading say 3 years of your life for 50K?  That is a $100K bonus check after taxes in CA.  And it is not confirmed that there is no risk in that either. 

seven

 
jayakd0
jayakd0
5/28/2016 | 2:21:39 AM
Re: Seriously?
Wish I too knew the figures :) Ultimately it all depends on one's own priorities and tradeoffs to be part of such teams! That is why I excluded the "ambitious (on fortunes)" guys from such groups.  

On another note, curious, why no one cares to check the % of startups which have made those big bucks and what happens to those who have toiled for the remaining %, not so lucky?
brooks7
brooks7
5/28/2016 | 12:59:18 AM
Re: Seriously?
So, you think they are giving them multi-million dollar cash bonuses?  I don't think so.

seven

 
jayakd0
jayakd0
5/27/2016 | 9:30:08 PM
Re: Seriously?
@Mitch Wagner: The concept of Alpha teams Pankaj Patel created inside Cisco is to get a startup culture inside the organisation setting up nimble teams to innovate faster and better, while giving the secure fealing (of an established organsiation) to the teams concerned!

@Seven: Hope Cisco would have created similar carrots for these teams! It is true that ambitious guys can't be stopped (from starting up on their own) with such concepts, but this should be a great way to retain talent keeping them away from the monotonous day to day escalations, part of such big organisations!
brooks7
brooks7
5/27/2016 | 7:02:15 PM
Re: Seriously?
And the whole point of the early startup is that you get a significant number of shares that go from pennies per share to dollars per share at the time of the IPO.  In a successful IPO, people can get life changing money from that event.  Cisco can't realistically provide that.

seven

 
Mitch Wagner
Mitch Wagner
5/27/2016 | 4:48:21 PM
Re: Seriously?
But Cisco is not a startup. 

 
jayakd0
jayakd0
5/26/2016 | 10:55:47 PM
Re: Seriously?
when you work in a startup culture, it is but natural that work-life balance gets affected atleast during those peak periods of project activity!

as the dining table is a powerful stress buster enabling collaborations through informal (and relaxed) conversations, hope this unbalance gets offset to some extent :) also, if this can make those frequently interrupting (and cursed) meetings avoidable, why not?

as long as these rules are not casted in stone, teams should benefit immensely.
Mitch Wagner
Mitch Wagner
5/26/2016 | 2:05:24 PM
Seriously?
"Team members are also required to eat breakfast, lunch and dinner together on six days of the week, conference attendees were told."

Sounds horrible. Hard enough to achieve work-life balance in this industry without your employer making it forbidden.

And service providers and vendors complain they can't hire the talent they need, and wonder why. 
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