Cisco Internal Governance Case Study Essay

Words: 1879
Pages: 8

In 1995, John Chambers joined Cisco Systems as president and CEO. After six years under the supervision of Chambers, the company went from generating $2.2 billion in annual sales to $22.3 billion. As a result of the market downturn in 2001, the company suffered its first loss and laid off 18% of its workforce. Chambers quickly realized Cisco was in need of significant organizational restructuring if Cisco were to survive and thrive the downtown. This change shifted the company from a decentralized firm that only focused its three work silos of Marketing, Engineering and Sales to segregated and specific customer groups to a centralized firm that focused on collaboration and relevant technologies for given customer groups. This
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Many employees mentioned that on a daily operations level, they did not perceive their roles to have been affected by the implementation. This suggested that changes were felt at a higher level where group leaders and VP’s now had to allocate additional time to meet with assigned councils and participate in supplementary meetings in addition to their normal workload.

As the councils were improved to operate under a Three-in-a-Box leadership model consisting of executive leaders from different departments, employees had to adapt from working with set and specific lines of business to working collaboratively with the rest of the company.

Initiating & Managing the Change
Introducing a business council system was not a simple task, especially for a large organization like Cisco. The successful implementation of these business councils can largely be attributed to Chambers’ constant reminders about their importance. This frequent and open communication allowed employees to both understand and feel a sense of urgency about the organizational change. By working to overcome challenges such as miscommunication, competing priorities, general inability to execute and command-and-control style leadership, Cisco leadership committed to the change and acknowledged that any significant change requires patience.

Trust and teamwork were revitalized in councils