WSJ writes about Cisco’s efforts to root out inefficiencies in the organisation. For that, it needs another year of slow growth “giving the company a chance to make better use of its 35,000 employees.”
In a way, 19-year-old Cisco is learning how to run a real business. Its efficiency moves might be natural for older companies accustomed to economic cycles. But Cisco had never experienced such cycles: Between 1995 and 2000, Cisco’s revenue grew an average of 53% annually, an unheard-of rate for a multibillion-dollar company. Just keeping pace consumed all of Cisco’s energy, leaving little time for rules or reflection.
Changing that culture is slow and painful. Some of the most tangible results, such as new products, won’t be visible for another year or more. Mr. Chambers, who led Cisco through the boom, says the company deserves no better than a “C” for its transformation so far. He says Cisco today is evolving from a loose federation of start-ups that rewarded “speed at the expense of teamwork” and last-minute scrambling to grab opportunities. His goal: more internal cooperation to “avoid the diving catch.”
This is another example of a New Age company learning from the more traditional styles of management. Now, Cisco wants to focus on better leveraging its own internal resources rather than growing through acquisitions.