John Chambers-Cisco's Driving Force

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Case Details:

Case Code : LDEN016
Case Length : 11 Pages
Period : 1991-2002
Pub Date : 2002
Teaching Note :Not Available
Organization : Cisco Systems Incorporated Industry : Computer Networking
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"John Chambers is Cisco's best salesperson. He speaks with a passion and an enthusiasm that rivals the best salespeople out there; but he also does it in such a sincere fashion. He gets you to believe in a story. He convinces you he has the best solution. He has a great balance of being aggressive in terms of closing the deal but not being obnoxious about it."

- Michael Ching, Vice President, Merrill Lynch.¹

"Shape the future of the Internet by creating unprecedented value and opportunity for our customers, employees, investors and ecosystem partner."

- Cisco's Mission.

Introduction

John Thomas Chambers (Chambers), the CEO of Cisco Systems Incorporated (Cisco), was awarded the Internet Industry Leader Award² for 2000 by the United States Internet Council. In 1999, BusinessWeek addressed Chambers as "Mr. Internet," one of the most influential people in e-business and one of the top 25 executives in the world. According to BusinessWeek, he was "An unabashed evangelist for radical changes in management.

He has made his company a living laboratory for the 21st century corporation. When observers speak about a new, progressive business model for a new era, they inevitably put Cisco at, or near the top of their list."³

Under Chambers, Cisco has emerged into a dominant player in the global networking industry. He led Cisco's successful diversification into the switch⁴ and telecom equipment business. Chambers visualized Cisco as either the market leader, or in the second position, in every product market it entered.

By the end of 1999, Cisco was the market leader in 80% of its product markets, while in the remaining 20%, it was a close second. Chambers played a major role in strengthening the sales and marketing efforts of Cisco. He had a vision of transforming Cisco into an e-company (Refer Exhibit I).

He formulated several innovative programs to recruit and retain best human resources available in the IT industry. Chambers also developed a customer-oriented and performance-driven, yet informal culture at Cisco. Under Chambers, during the period 1995 to 2002, the revenues of Cisco rose by 15 times from $1.2 billion to $18.91 billion (Refer Exhibit II).

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1] As quoted in the book, 'The Eye of the Storm” by Robert Slater, page 32.

2] Normally given to US government executives, Chambers was the first private industry executive to win this award. The award was presented to him for his initiative in speaking to the National Conference of State Legislatures, to give them a better understanding of the architecture of the Internet, and how American leadership in this new medium had a positive global impact.

3] As quoted in the book, 'The Eye of the Storm” by Robert Slater, page 35

4] A network device that selects a path or circuit for sending a unit of data to its next destination. A switch also includes the function of the router, a device or program that determines the route the data should be sent to.