The Cisco Kid
The most effective business-to-business commerce executive on the Net.
(from The Net 21
Twenty-one of the most influential people in the Internet Economy, chosen by the editors of The Standard. (June 21, 1999)
idg.net
Category: Most Innovative E-commerce Executive, B-to-B
Winner: John Chambers
President and CEO, Cisco Systems (CSCO)
Runner-up: David Perry
President and CEO, Chemdex
When John Chambers was hired at Cisco Systems seven years ago, the company employed nearly 300 people and had annual sales of $70 million. When he was appointed CEO four years ago, Cisco revenues had just passed the $1 billion mark. Now, Cisco is churning out revenues of more than $3 billion a quarter. Annual sales over the Internet top $10 billion, more than any other company. The leading vendor of the routers and other data-communications devices that make the Net run has also become one of the most effective companies anywhere at using the Net – and at promoting the importance of the Internet Economy.
It's an impressive performance by any standard, even more so given Chambers' last stop before Cisco: Wang Laboratories (WANG), a company once known for its word-processing systems and now legendary for its inability to adapt to the rise of the personal computer.
"The most important lesson was watching Wang, which was on top of the industry and a very strong player in the minicomputer market, pay a terrible price for getting too far away from its customers," says Chambers. "Seeing other computer companies make this same mistake again and again has had a tremendous influence on my professional development."
Wang offered some hard lessons about how not to run a technology company. "I was at Wang with John," says Gary Daichendt, executive VP with Cisco, and one of Chambers' right-hand men. "It was very hard to stomach what happened there. But I have to believe you learn more through failure than success."
While Cisco has had explosive growth during Chambers' tenure, he operates with a measured, controlled approach to business that differentiates him from most CEOs in growth industries. His experiences with the dying Wang seem to have him continually guarded against a downturn, though he runs one of the most consistent performers on Wall Street.
Even in designing the company's sprawling new campus in San Jose, Calif., he asked that all the buildings be designed identically – four stories tall and beige with green trim. (He splurged on the headquarters – it's five stories.) Chambers asked for the nondescript buildings so that they would be easier to rent out in the event of a downturn.
The lessons Chambers has learned drive him to run one of the tightest ships in the business. To streamline the firm, all executives are expected to use the Internet platforms the company sells in running their day-to-day businesses. For example, Cisco CFO Larry Carter uses online reporting to make a "virtual close" on all financial reports, meaning Chambers can get daily business updates instead of waiting until the end of the quarter to monitor performance.
Cisco, which has just begun dabbling with television ads, is trying to capture some of the excitement of leading the Internet revolution. But Chambers prides himself on building a boring company. For 37 consecutive quarters, Cisco has met analyst expectations. Business managers are punished for surprises – even positive ones. Says Carter: "If you get surprised, that means you don't know your business at all."
– Jason K. Krause
idg.net
|
