Cisco’s Comeback

Business Week recently had a story on Cisco’s rejuvenation, with a quote from CEO John Chambers that shows its dominance: “We’ve executed to the point that we have 100% of the industry’s profits, 100% of the cash, and about 70% of the market cap.” More quotes:

[Once Cisco began to understand the breadth and depth of the downturn], we thought it would be the hundred-year flood and that it would last longer than people anticipated. I did not want to make the mistakes that I saw made by other companies during a downturn. The rule I followed was to make the changes one time, make them deeper than you think, articulate the changes in a way that explains your longer-term vision, explain why the changes have to be made, and outline what employees need to stay focused on. And then position for the upturn.

The consensus [when I spoke to big companies] was that you have to deal with the world the way it is, not the way you wish it was. Do not fall into denial. Second, you need to determine whether you did this to yourself or whether there were larger market forces at play. Third, you need to determine how long you think the downturn will last and how challenging it will be, because your strategy will change depending on the depth and severity of the situation.

Jack Welch [former General Electric (GE ) CEO] said it best. He said, “John, you’ll never have a great company until you go through the really tough times. What builds a company is not just how you handle the successes, but it’s the way you handle the real challenges.”


Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.