John Chambers webinar

4 minute read

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I attended a webinar with John Chambers recently, below are the takeaways:

  • Ppl don’t like to talk about mistakes but I think it’s important, even more so than talking about successes.
  • Hence I’ll start by talking about mistakes. What were my biggest mistakes?
    • In 2001 Cisco was on a roll, we had been forecasting growth accurately, had been beating Street estimates consistently for 30+ quarters in a row
    • We were forecasting 30% growth for the next period, and then went from high growth to -30% decline very quickly in 2001 crisis as customers pulled back
    • How I learnt from this was in 2007 when we saw some signs of slowdown despite overall market being bullish, and we were able to prepare for that and manage cashflow accordingly
    • We emerged stronger than everyone else from 2007 because of experience in 2001
  • What makes a good leader?
    • Do what you say you’ll do
    • Your currency is your track record, relationship, and trust
  • Cisco’s ability to run a playbook was crucial to success
    • e.g. we did many acquisitions while I was there, partially because we were able to replicate a playbook for each acquisition to run the process smoothly
    • learn from your experiences
  • There’s much more change in today’s job market than the past.
    • I’ve had 3 jobs in my career, but my children are already on their 3rd job, and people now will probably go through 10+ jobs in their career
    • Don’t teach ppl how to do an occupation, but how to learn and change instead
  • If you’re trying to convince ppl of something, ppl don’t remember all the points, you have to learn how to tell stories
  • Long term thinking
    • At cisco I wasn’t focused on quarters, and I wanted competitors to be focused on quarters
    • Most companies now are run with too much short term, quarterly focus
  • Companies fail by doing the same successful thing too often 
    • e.g. west virginia in 3 decades became #50 on most measures of wellness
    • If you don’t change you’ll get left behind
    • People may say that’s all part of the natural cycle of things, but it’s not a natural occurrence at all. Other states deliberately engineered change for their success
    • If you keep doing the right thing for too long it will get you in trouble
    • e.g. walmart, I was on board, we saw AMZN threat but didn’t focus on it until it was too late
    • You can be smart but predictable e.g. bridge players that were engineers, and that makes you easier to beat
  • Maintaining success is about speed and getting out of your comfort zone
    • When this happens to you though it’s hard
    • You will fail, will be uncomfortable
    • But if you don’t change, integrate and understand new tech, you’ll get left behind e.g AI, 5G in this current time
  • Great companies must be customer obsessed
    • 80% of ceos thinks they have great customer service but only 10% customers think the same
    • At cisco we drove strategy by asking customers what they wanted
    • Behind all of our 180 acquisitions it was always customers pushing and giving thumbs up to the decision
    • We were always customer driven, did what customers think was important
    • Customers would trust us
  • I knew most acquisitions would fail just by the probabilities
    • In high tech industries when you buy a company you’re buying ppl and the next gen product
    • 90% will fail
    • If you think you’ll do things differently and are immune to this you’re going to be wrong
    • Don’t acquire companies with different culture
  • What’s your investment criteria as a VC now?
    • They have to be involved a transition point for both business and the overall industry
    • Management as well
  • I believe almost all job creation in the next few years will come from startups
    • We have to create a good environment for startups
    • IPOs now are half the number compared to the internet boom
    • There are likely not enough companies in the pipeline for the economy to do well in next decade
  • How did you know you were seeing the right signals at cisco for success?
    • Listen to what customers were saying. Focus on competitors in terms of keeping score of how you’re doing vs them
    • Follow every critical account of the company all the time, listen to problems 
  • I also believe that if people stay in a role for 4+ years they’ll get bored
  • I was once told that I won’t have a great company until we have a near death experience
    • As a leader you have to be the rock for the company in that time
    • This anecdote was proven right after going through the crisis
  • Another piece of advice I was given was to always take time to go to bathroom
    • What he meant was that I should come out of a meeting and take time to summarise and reflect on it. You need to be in the right state of mind and preparation for the next meeting
  • I studied competitors not for their strategy but to understand how their CEO behaved
    • e.g. ceo had history in concentration camp, that would affect their behaviour
    • e.g. bridge players were smart but predictable, similar analogy to CEO behaviour

If you like this, you might like my monthly newsletter on finance and tech