Leadership, Crisis and Culture
In times of business crisis, we often look to leaders with a proven track record for sage advice about what works and what doesn't. The CEO of Cisco, John Chambers, has been featured recently in two publications - the Harvard Business Review (November 2008) and Fast Company (December 2008). In both articles, he talks about the importance of collaboration, especially in tough times. It has been through collaboration with customers that Cisco stays competitive, according to Chambers. He describes Cisco as becoming "pretty good at tapping opportunities from downturns." His advice for capitalizing on market changes is to listen to your customers about the transitions they see and then have the right culture and technology in place to take advantage of these market changes.
What kind of culture is the right one in a time of crisis? Chambers talks about installing collaboration as part of the company's DNA. He's taking Cisco through a radical reorganization that's full-scale and based on a networked model. The objective is to spread leadership and decision-making to large groups of executives and create a structure that supports collaboration at its highest levels. Cisco is now organized in cross-functional, collaborative "councils and boards," which mimic social networking groups. Supported by Web 2.0 technologies, these councils and boards include people with relevant experience who are charged with making and acting on key decisions. Organizational alignment with the strategy is key. Rewards come from achieving agreed-upon goals together and sharing resources, not competing for them. Compensation is structured around whether or not you collaborate.
Chambers admits that he was a typical "command and control" leader in the past. The crisis Cisco went through in 2001 with a down economy got him thinking about a different model, one that would be more scalable and responsive to change. In the Fast Company article, Chambers describes Cisco in 2001 as being like most high-tech companies, with one or two core products the company focused on and a decision-making structure that was top-heavy. Not everyone at Cisco adapted to the collaborative approach. About 20% of the executive team left. What's more, Chambers reports that he initially instituted "forced collaboration" since many in the company were uncomfortable with the model, including Chambers. There was no opt-out.
Cisco has dramatically expanded the number of cross-company initiatives it has launched and executed. The collaborative structure allows members to make decisions in real time and get things done faster and deeper. Innovation and integrated knowledge-sharing have been critical by-products of this new cultural norm. An additional benefit of the new design is that it builds a much larger pool of leaders, the goal of so many human capital strategies in organizations.
If what is being written about Cisco is accurate, it appears to stack up well against the eight cultural characteristics that AMA and i4cp have recently identified as being associated with a positive corporate culture: being collaborative and cooperative; having a culture aligned with the company's strategy; encouraging innovation; reinforcing strategy execution; fostering trust throughout the organization; responding quickly to needed changes; bringing out the best performance in employees; and making decisions at all levels, not just top management. Relatively few organizations in our study scored high on all eight of these dimensions. Perhaps Cisco can serve as one of the prototypes for high-performance culture change in the future.
What kind of culture is the right one in a time of crisis? Chambers talks about installing collaboration as part of the company's DNA. He's taking Cisco through a radical reorganization that's full-scale and based on a networked model. The objective is to spread leadership and decision-making to large groups of executives and create a structure that supports collaboration at its highest levels. Cisco is now organized in cross-functional, collaborative "councils and boards," which mimic social networking groups. Supported by Web 2.0 technologies, these councils and boards include people with relevant experience who are charged with making and acting on key decisions. Organizational alignment with the strategy is key. Rewards come from achieving agreed-upon goals together and sharing resources, not competing for them. Compensation is structured around whether or not you collaborate.
Chambers admits that he was a typical "command and control" leader in the past. The crisis Cisco went through in 2001 with a down economy got him thinking about a different model, one that would be more scalable and responsive to change. In the Fast Company article, Chambers describes Cisco in 2001 as being like most high-tech companies, with one or two core products the company focused on and a decision-making structure that was top-heavy. Not everyone at Cisco adapted to the collaborative approach. About 20% of the executive team left. What's more, Chambers reports that he initially instituted "forced collaboration" since many in the company were uncomfortable with the model, including Chambers. There was no opt-out.
Cisco has dramatically expanded the number of cross-company initiatives it has launched and executed. The collaborative structure allows members to make decisions in real time and get things done faster and deeper. Innovation and integrated knowledge-sharing have been critical by-products of this new cultural norm. An additional benefit of the new design is that it builds a much larger pool of leaders, the goal of so many human capital strategies in organizations.
If what is being written about Cisco is accurate, it appears to stack up well against the eight cultural characteristics that AMA and i4cp have recently identified as being associated with a positive corporate culture: being collaborative and cooperative; having a culture aligned with the company's strategy; encouraging innovation; reinforcing strategy execution; fostering trust throughout the organization; responding quickly to needed changes; bringing out the best performance in employees; and making decisions at all levels, not just top management. Relatively few organizations in our study scored high on all eight of these dimensions. Perhaps Cisco can serve as one of the prototypes for high-performance culture change in the future.
Mary Key,
Executive in Residence
Author, speaker, and leadership expert, Dr. Mary Key heads the leadership practice for The Institute for Corporate Productivity (i4cp) and helps our member organizations improve workforce productivity. Key started Key Associates, Inc., an organizational transformation company that helps leaders and organizations grow. Among others, Key’s clients have included: Ericsson, Nokia, Nissan, Infiniti, Baycare Health System, Baptist Health Care, Bausch & Lomb, Trane, Wyeth Nutrition, CitiFinancial Retail Services, Circuit City, Dorn Technology, Georgia-Pacific, Media General, Quarterdeck Select, Metal Industries, Incarnate Word Health Systems and Lore International. Key has authored several books including CEO Road Rules: Right Focus, Right People, Right Execution and The Entrepreneurial Cat: 13 Ways to Transform Your Work Life. Key received her Ph.D. from the University of Virginia and her BS from the University of Massachusetts. She has won numerous awards and most recently was selected as a finalist for 2007 Business Woman of the Year in Tampa Bay. Key belongs to the OD Network, Society for Organizational Learning (SOL), National Speakers Association, Searchnet, SHRM, ASTD, Berrett-Koehler Authors Co-op Board and the World Future Society. She has lives in Tampa with her husband Lewis and their two cats, Jazzie and Groucho.