Cisco has been in the news this month as chief executive, John Chambers, admitted in a memo to employees that Cisco has lost its way (http://blogs.wsj.com/deals/2011/04/05/read-cisco-ceos-mea-culpa-no-excuses/). To show shareholders he’s serious, Cisco shut down the Flip video camera business and promised to undergo an organizational restructuring. Chambers promised “tough decisions in the wake of recent lapses in execution,” as The New York Times reported.
In a recent article in the Wall Street Journal, Cisco says that it will “exit aspects of its consumer business.” The announcement comes just one week after Cisco’s CEO sent out a memo confessing to severe issues with slow decision making and a lack of “discipline” at the company.
One can’t help wonder, what happened? Shareholders may report loses at Cisco and unsound or slow leadership, however I’m wondering if we are looking in the right places. Perhaps in Chambers memo there lies a clue…”Our strategy is sound. It is aspects of our operational execution that are not. We have been slow to make decisions, we have had surprises where we should not, and we have lost the accountability that has been a hallmark of our ability to execute consistently for our customers and our shareholders.”
In 2009 according to the Wall Street Journal, Cisco Systems Inc. posted a 46% drop in quarterly profits. While that news would make most managers faint, Chambers took action and promised to get Cisco back to double-digit growth. His strategy involved moving the company into more businesses. The report states, “He (Chambers) has decided to replace Cisco’s top-down decision making with committees of executives from across the company. Some teams provide strategic advice and evaluate the progress of these projects. In total, Cisco now has 59 internal standing committees.”
At the time Chambers stated, “We are moving to collaboration teams, groups coming together that represent sales, engineering, finance, legal, etc. We now do that with 70 different teams in the company. So we’ll have a sales leader go run engineering. A lawyer go run business development. A business development leader go run our consumer operations. We’re going to train a generalist group of leaders who know how to learn and operate in collaboration teamwork.”
At the time, what seemed slightly nuts to many were innovative to the rest. In 2009 I wrote that this was either the most brilliant plan ever devised or the most insane. Either way Chambers created the platform necessary for responsibility and change. And so he did.
Now Chambers finds himself in a position where his consumer business has not fared well and as he said, “We have disappointed our investors and we have confused our employees.” Was this from poor collective decision making by 59 or more standing teams or more run amuck; or was this Chambers and his senior teams’ leadership that has put the company in such jeopardy?
Only the annals of history will prove whether or not Chambers has either been a wonderful risk taking CEO who has taken responsibility for his actions, or a poor executive who has made a flurry of choices that has put the company in great jeopardy.
What is bothersome about Chambers memo is not once does he apologize for putting the company at risk. He does not say that as the leader of this organization it was actually his responsibility to lead well and strong without shutting down divisions, laying people off and now undergoing a corporate restructuring.
This is emblematic of Nokia CEO’s Stephen Elop’s “Burning Platform” memo, which took severely to task the company’s growth and direction without providing concrete steps on how to get to a destination plus without taking proper accountability.
Let’s go back to leadership basics. One of the cornerstones of leadership is responsibility. Even if you close the company at the end of the day, if you took responsibility for the doors closing then you are indeed a leader.
As renowned author Jim Collins said in his leadership book, “Good To Great,” about stellar leaders, “They look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.”
How do you take responsibility:
1. Say I'm sorry
2. Stay clear of excuses
3. Acknowledge your part
4. Control your reactivity
5. Be accountable - you have chosen your behavior and now you must live with the consequences
6. Learn from your mistakes
7. Take proactive steps to change your behavior
8. Don't beat yourself up - this does nothing to change the situation or bolster your self esteem
I'm extolling a basic leadership virtue – responsibility and advocating for every person who reads this to take it and do so with gusto. Taking responsibility is not pretty, however you will sleep better at night if you do.
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