John Chambers on Keeping Cisco on Top

The chairman and CEO of Cisco Systems on his determination to keep the tech heavyweight from ending up like his prior employer, Wang Laboratories
Illustration by Jimmy Turrell

My most important decisions are about adjusting to change. Over the last 20 years, we’ve reinvent-ed ourselves five or six times. Some were positive reinventions, some were very painful. I worry about missing market transitions, shifts in technology, a change in buying patterns. But I think fear is a wasted emotion. You have to change before it becomes obvious.

The toughest thing is when you see warning signals that others don’t. In August of 2007, we saw the financial institutions suddenly stop buying. Even though the CEOs are my friends and they were saying, “Nah, we don’t see a problem,” the data was undeniable. In 2009, when everybody was getting the darkest, we said, “You know, 2010 looks all right.” We bet, we did acquisitions, and it was a good year. In 2011, when everybody got really optimistic, we saw business from state governments starting to slow. I got crucified for being honest about negative trends.

We are reinventing ourselves again. People still think of us as a router and switch company. We’re moving away from being a plumber—though it’s an honorable profession that’s produced good financial results for us—and using our technology to change areas like health care and education. These past two years, we’ve gained market share across areas people said we couldn’t be in.

I’d like to say I like change. I don’t. I came out of IBM and Wang Laboratories. Each company was on top of the world and then fell from grace. Once you’ve experienced that, and the pain that goes with it, the one thing you’re not going to do is not change. But once you decide on that change, you have to see it through. It takes three to five years to drive new strategy through a company. If it’s the right thing to do, you have to stay the course. That’s a mistake others make. They try different things in a crisis. If you’re changing your strategy every six months, I’ve got you.

When Shimon Peres first told me 15 years ago, “John, leadership is very lonely,” I said, “Shimon, how can it be lonely? I’ve got 50,000 people around me.” A few years later, I knew what lonely meant. When things really get tough, you’re by yourself. You make the call. — As told to Diane Brady

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