John Chambers drew multiple standing ovations Monday afternoon for his final Cisco Live keynote, and while the outgoing CEO didn’t say much that was new, he set up the expectation that Cisco would continue to change radically under his successor, Chuck Robbins.
Chambers used his last big soapbox moment with customers — the conference is drawing an estimated 25,000 attendees to San Diego — to emphasize a theme he’s been pressing for the last several months or more: the severity of the digital transition that is coming. Every industry is in danger of being Ubered, and Cisco is not immune, he said.
To prove that point, Chambers repeated his boasts about Cisco’s own overhaul. During the past couple of years, the company has rebuilt its organizations in major areas such as engineering, sales, services, and legal.
And fitting the “change is afoot” theme, Robbins will start work with a new slate of executives, as nearly all of Cisco’s top layer is leaving. Departing names include Rob Lloyd, Padmasree Warrior, Gary Moore, and Edzard Overbeek.
40% Casualty Rate
Chambers’ message lately has been that digitization will decide the winners and losers of tomorrow. His favorite statistic, repeated early in his keynote, is that 40 percent of today’s enterprises will not exist “in a meaningful way” in 10 years.
Digitization is changing the public sector as well, he said. City and national governments are among Cisco’s most prized customers these days; Chambers alluded to extensive projects the company is doing with the government of France, for instance, in areas such as the Internet of Things and the smart grid.
As an enterprise tries to make itself more agile by applying IT, most of the challenges it faces are on the cultural side rather than in technology, Chambers said, again using Cisco as an example. “We’ve got to try to gather our silos; we had to change our culture. We’ve got to lead by example.”
It also means working with stripped-down teams. Chambers pointed out that the engineering team under Executive Vice President Pankaj Patel — the team that cranks out Cisco ASICs — has only recently grown beyond 200. And he gave props to Cisco CIO Rebecca Jacoby, saying she’s worked with a flat or shrinking budget for several years “and yet [is] able to deliver everything that Chuck and I want.” (Jacoby will remain at Cisco as the head of operations.)
“Is this Cisco’s strategy, or does it need to be yours?” Chambers rhetorically asked the Cisco customers. Ever the salesman, he added a long pause for dramatic effect, then added: “If I’m not making you sweat, I should be. This is the transition that each and every one of you will have to work through.”
Chambers also stressed that strategic partnerships will be crucial to Cisco or any enterprise — not just partnerships on paper, but those that involve “deploy co-developing products” or completely altering the processes behind manufacturing. “Watch how fast we move in the next six months [compared] to what we used to do in two to three years,” he said.
Meet the New Boss
Chambers closed by briefly thanking everybody for his 20-year term. After waiting out a standing ovation, he brought Robbins to the stage for a mild Q&A, giving customers an idea of what to expect from the new CEO.
At least twice, Chambers asked Robbins to articulate on how the two of them differ, but Robbins didn’t provide much detail. Robbins did say that he considers Cisco’s biggest challenge to be the prioritization of opportunities, given just how much change is going on in the wider world.
Robbins also gave his explanation for the dismantling of Chambers’ executive team. Many of us are assuming that at least a few of the departures are voluntary. Robbins noted, though, that Cisco will “have to move faster on all fronts,” and he characterized the executive changes as his way of creating a leaner and more agile organization.