What are the key systems implications that will affect a successful outcome in professionalizing an organization such as Cisco Systems?

What are the key systems implications that will affect a successful outcome in professionalizing an organization such as Cisco Systems?

Japanese proverb:

Vision without Action is just a daydream and consequently,
Vision without Action is just a nightmare.

In a video I watched in (2009) of Jack Stahl, formerly President of Coca-Cola Company, he was asked to share his experience in Coca-Cola during one of its great growth periods. Stahl describes the challenges in changing strategy, especially in taking an organization to a higher level of achievement.

In review of the current dilemma at Cisco, see the articles listed below in resources from April 4, 2011, Read John Chambers’ Memo to Cisco Staff , April 6, 2011 Chambers Vows ‘Fix’ as Cisco Stumbles and April 7, 2011 Cisco Investors Need a Switch postings in the WSJ. Cisco Systems and the Chief Executive Officer, John Chambers clings to his strategy from pre-2009, he may have lessons he needs to learn in regard to the value of humanity and putting people first before technology. Organizational Development, Process Management and true Strategy begins in the C-Suite, yet the leadership truly needs to listen to others and collaborate with others to put an organization on the right footing for the future. Here are a few key points that Jack Stahl suggests from his video…

“Stay alert always, listen, listen, listen and ask questions of your constituents. Understand your constituents view point and that means being in dialogue with them.

Have your radar system finely tuned, listen for burgeoning issues and take heed of the warning signs as they seep into your awareness. Take action immediately!”

In the pre-2009 strategy set by John Chambers, Cisco faces a huge change in the organizational strategy as well as the sales direction of the company. Cisco traditionally has been a manufacturer and product hardware company specializing in routers and switches for the internet. Moving into the Enterprise Architecture (EA) space and selling at an architectural level is not an easy move for hardware box sellers. Many organizations that have made a significant change from products to solutions have walked away from those changes as any boxer can attest to with bruises and cuts sustained from a match with the odds stacked against winning and not knowing the opponents strengths and vulnerabilities before entering the ring.

Cisco has been known as a bellwether company in the past and in 2009 all seemed quite well as Cisco joined the Dow in April 2009 replacing GM. However, they need to continue movement in leadership and change management both internally and externally in their organization to continue success.

I do believe the current CEO, John Chambers has had his ear to the ‘ground’ listening to the swell of the tidal wave as Jack Stahl puts it in Chambers pre-2009 strategy. John Chambers has made an effort to make changes regarding the command and control style of management to a collaboration style of management, yes and he admits this is not in his comfort zone. From the current news reports posted in this article in 2011, my question, how is that Command and Control style of Management working for your organization now? Have the changes worked?

CEO John Chambers had publicly said he is trying to change is management style – and letting go of Command and Control and work on a Collaborative method of governing. This new change kicked off August 1, 2009 for FY’10. The jury is still out if Cisco can turn their company around with a different management style, respect for their people as a competitive asset and consider moving forward with a systems thinking, systems theory based organization.

Cisco took steps away from their Core routers and switch business, as discussed by the author, Jim Collins and in his book Good to Great (2001) and the article by Jim Collins (1999) The Power of Catalytic Mechanisms discuss several ways an organization needs to change their core business if they are going to be a great company. Perhaps it would be time to consult Jim Collins and his book, Good To Great to bring Cisco to Level 5 in Leadership? One of the first changes made is mentioned in the article by Collins (1999) is the ‘what’ was the catalytic mechanism that truly drove the change at Cisco? Was the change the right changes for Cisco as they venture into the Consumer Markets with the acquisitions of Linksys and Scientific America?

Cisco’s Home Entertainment programs are the next biggest change and challenge in the organization that will require significant change to deliver both internal and external services to their partners and customers. These are only a few of the acquisitions over the past several years, how does the overall strategy and alignment of their continued acquisitions water down their core strength as an organization? What have they truly done to improve their bench strength of all their management teams?

In review of the systems and recreating an organization, In Ackoff’s book (1999) Re-Creating the Corporation: A Design of Organizations for the 21st Century. The Nature of Systems, Ackoff states: “Training is the transmission of knowledge. Training and education are not the same thing. Education is the transmission of understanding and wisdom. Failure to distinguish between training and education is commonplace”. (p 160)
As Ackoff describes there are three ways to divide labor therefore there are three ways to organize these types of organizational units.
1. Functionally defined (input) units
2. Product, or service defined (output) units
3. Market, user-defined units (p.226)
“Therefore, the resulting organizational design always reflects the relative importance attributed to each criterion: function, product or service, and market…”All reorganizations involve changing the relative importance of the three criteria used in dividing labor (p. 227).”
…change the organizational level at which units of the three appear. There are two Functional units

Functional units:
1) Operation Units: directly effects an output
2) Services Units: have no such effect, they affect the nonoperational behavior of other units, e.g., accounting, data processing and human resources

The strategy and vision of the company should reflect these changes. It would appear that Cisco and yes John Chambers needs to reflect on the vision and strategy for the organization and perhaps go back to the drawing board.

During the past it appeared the most important organizational unit was #2 – product, or service outputs and # 3 – Market, user defined units. If I were to guess the ‘People’ function was not high on the list of priorities other than the mandates required by law.

And in closing a few quotes from the Gurus in the business world, and some that Cisco’s chief would have been advised to have listen to as well…

Bruner from his book (2003), The portable MBA states: “Without a deep and sophisticated understanding of people in organizations, all transformation paths lead to dead ends.” (p. 32)

From Alinsky’s book, Rules for Radicals, (1971) “Most people do not accumulate a body of experience. Most people go through life under-going a series of happenings, which pass through their systems undigested. Happenings become experiences when they are digested, when they are reflected on, related to general patterns, and synthesized.” (np)

In Ackoff’s book (1999) Re-Creating the Corporation: A Design of Organizations for the 21st Century. The Nature of Systems. He provided a quote:
Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought”. – Albert Einstein (p.3)

I wish John Chambers the best, Cisco will need to use all the wisdom that Jack Stahl has provided – and keep asking the ‘Publics’ their opinion so the ship can be steered in the right direction to enable success for present and the future success for Cisco. Additionally working with others and their insights may be a value to Cisco as they continue in their growth. Stay tuned… ;-).

Alinsky, S. (1971) Rules for Radicals. New York, NY: Vintage Books.
Ackoff, R. (1999). Re-Creating the Corporation: A Design of Organizations for the 21st Century. The Nature of Systems. (3-19)New York, NY: Oxford University Press.
Bruner, R.F., Eaker, M. R., Freeman, R. E., Spekman, R.E., Olmsted Teisberg, E. & Venkataraman S. (2003). The portable MBA 4th ed. Hoboken, NJ: Wiley and Sons, Inc.
Chambers, J. (2011). Read John Chambers’ Memo to Cisco Staff. Wall Street Journal, Accessed April 4, 2011.
Collins, J. (2001). Good to great: Why some companies make the leap…and others don’t. New York, NY: HarperCollins Publishers, Inc.
Collins, J. Turning Goals into Results: The Power of Catalytic Mechanisms. Harvard Business Review, 77(4), 70-82.
Tuna, C. (2011). Chambers Vows ‘Fix’ as Cisco Stumbles. Wall Street Journal, Accessed April 6, 2011.
Winkler, R. (2011). Cisco Investors Need a Switch. Wall Street Journal, Accessed April 7, 2011.

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About Linda Savanauskas

An accomplished talent management professional with experience in curriculum design, development of learning strategies, and professional skills development training programs for the workplace. Collaboration in training programs includes small and medium size businesses (SMB) to larger organizations from Raleigh to Charlotte, North Carolina. Virtual instructor led training can be offered to any location.