Cisco's Patel Hails 'Microculture' Successes
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.
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.
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, , News Editor, Light Reading