Podcasts

Expert Insights: Former Cisco CEO John Chambers on Leadership

A widely recognized leader in the world of tech, John Chamber has been called the “Best Boss in America” by ABC news program 20/20 and has been included in Time Magazine’s “100 Most Influential People”. Chambers is probably best known for being the CEO of Cisco for 20 years. He is currently the founder and CEO of JC2 Ventures—a company which helps to develop startups around the world—and has recently published a book on leadership entitled Connecting the Dots: Lessons for Leadership in a Startup World.

In his interview with CT Expert Insights, Chambers talks about his leadership philosophy, what lessons startups and large companies can learn from each other, and why businesses of all sizes need to embrace the concept of a “startup nation” in order to thrive in today’s economy.

 

TRANSCRIPT

Greg Corombos: Hi, I'm Greg Corombos. Our guest this week on Expert Insights is former Cisco CEO, John Chambers. He is also the founder of JC2 Ventures, which is aimed at helping the next generation of tech leaders. He's also the author of the brand new book, Connecting the Dots: Lessons for Leadership in a Startup World. And John, thank you very much for being with us,

John Chambers: Greg, it's gonna be a lot of fun.

Greg Corombos: Well, let's start with your story at Cisco. Cisco is obviously a huge company. Most people are certainly familiar with it. Some perhaps know more than others. Startups generally, obviously, begin quite small. So in what ways do you approach running them the same? And in which ways do you have to approach them differently?

John Chambers: You know, it's a great question. I've never been asked that directly. And I'll try to put some specifics with each of the questions you ask. In terms of running them the same, the CEO’s job is the same— it's just skilled differently. Vision strategy for the company is number one. Develop, recruit, retain the leadership team, and periodically change them to implement that vision and strategy is number two. Number three is communications. And number four is culture.

And in the startups, it's the same for issues. Very often the startups don't get culture as quickly, and you need to work with them on the communications. Often they're brilliant on the vision and strategy. And of course, they're building a leadership team with it.

So the characteristics are very similar. There are a lot of things that startups can learn from the bigger companies, especially around process, as long as it's not bureaucracy and does so with speed. And there are things the big companies need to learn from the small companies, a big company who does not act like a startup will not survive today.

So, for example, a great company like Boeing, as good as it gets in aviation. And they partner with one of my startups called SparkCognition out of Texas. A brilliant young CEO, probably one of the top world leaders on artificial intelligence, that they did a strategic joint venture with 230 people in Texas. Again, 50/50 ownership of developing the next FAA architecture for unmanned aircraft. So what you see is big companies—in order to be innovative, etc.—half to act like small companies and move with speed, and the two can learn from each other. So a lot of similarities, more than people realize.

If your audience is big companies, and you feel that you're not acting like a startup, you probably need to change.

Greg Corombos: So that kind of explains the answer to my next question, I guess, is how you went from this massive corporation to really focusing and being passionate about the startups? What triggered that evolution?

John Chambers: Well, probably a series of things. I had an advantage in writing the book in that I've met with almost every political leader in the world multiple times because of the role the internet plays. Credit 180 companies at Cisco, 12 of them bigger than a billion dollar acquisition. We went through ups and downs that other companies did not survive. And while we weren't perfect, we did extremely well versus anyone else. And we recreated innovation in terms of how you change...use technology to really change outcomes, change the way the world works…

So as you think about it, and look at the startups that already acquired 180, which means I've looked at 1000, and I believe that startups will be the primary job creator of the future, the primary innovation engine of the future, and the primary determinant of GDP growth. I don't think large companies....at headcount over the next decade in total due to digitization automation. In fact, probably 40% of them won't exist in a decade. So our future in this country is startups and we're behind. We aren't getting enough IPOs, initial public offerings. And we're running about a third the pace that we were in the 90s when we created 25 million jobs. So I think we got to become a startup nation again. And it can't be Silicon Valley, Texas and New York. It's got to be a growing all 50 states. And that's one of my goals, both with the book, but also the 16 startups I've invested in are in seven different states. And I would like to see a replicable model, much like I'm trying to do with

West Virginia University and the state of West Virginia becoming a startup state.

Greg Corombos: We’re talking with former Cisco CEO, John Chambers, now founder of JC2 Ventures. The book is Connecting the Dots: Lessons for Leadership in a Startup World. And one of the things I found most fascinating, John, is you are so successful leading Cisco, and you're not really a tech guy. You’d figured out leadership principles. And obviously, I'm sure you studied well and figured out the best ways to move forward with Cisco. But explain how it not only worked for you but how it can work for others, that you don't have to be an expert necessarily walking in the door to be successful?

John Chambers: Well, I had spent nine-and-a-half years in college. I had a great understanding wife and I love playing basketball, and I love the student and learning environment. And I had no and tension of going to work for a company like IBM, especially in sales after nine-and-a-half years, multiple degrees. And I got an offer to watch a basketball game. And if I did that and did the interview with IBM, we were even.

So I did it purely out of curiosity. And I learned there from the IBM leader, that technology wasn't something that the geeks did in the back room, technology was changing business. And here's how you did it. And I fell in love with the concept.

So can I learn about technology to deep level? Yes. Do I really enjoy it? No.

What I love is how it changes the outcome, how the internet changed the way the world works, lives, learns, and plays complex topics with complex products like routers and switches. And we combine them to change how business was done, and how we communicate. And in the process, broke away from all of our peers—both the big giants, who were many times our size and our power, and literally hundreds of startups, that came at us,

Greg Corombos: John, you were talking earlier about how vision and passion and culture and communication are some of the absolute pillars of any successful business, much less a tech startup. But you mentioned some are more difficult to master than others, particularly culture and communication. So dig a little deeper and explain what you mean by those two terms, and how you instill it in your company?

John Chambers: Well, I think out of the four areas the CEO has to own and sponsor, communications and culture are often the ones that are underestimated. You could be a great CEO. Jack Welch, from a generation in front of me was probably the best CEO of his time, the 70s and 80s. And he was good on vision and strategy, very good on developing the best leadership teams. And he held them to [a] very high strong culture. But he wasn't particularly a great communicator, at least not for the first couple of decades of his career.

In today's world, if you're not a good communicator, you can't navigate through the issues that come at you with speed that is so much different. How you handle an issue on social media can determine the market value of your company in terms of 10% gain or loss, depending on how the issue is handled. How well you listen, how well you communicate to your customers, your employees. How you outline that vision strategy is such a key area. So communications, I expect out of all the startups that I do, and with all the people at Cisco, we actually put us into competition is to make sure that every time we get in front of customers, how did the customer rate us.

Culture, even more important. Culture, some people say will eat strategy and vision for lunch. I'm not so sure I go all that way. But it's equally important to strategy and vision. You never have a strong company without a very strong culture. You may like the culture at Microsoft, or an Oracle or a Cisco, or a Walmart or JP Morgan Chase. But the key issue is they're very predictable and very strong. I try to teach that in the companies that I'm with, and take the culture issues and make it simple. You know, in culture values for us. Just do the right thing. Make innovation happen. Customers first. Treat others for respect and appreciation and encourage constructive disagreement.

Greg Corombos: We're talking with John Chambers. The book again is Connecting the Dots. And John, obviously, folks can study your book, they can study in a lot of different areas as you did in your years at the university. But oftentimes, of course, the best lessons are learned when you're in the middle of it. So what do you see as the most important lessons you learned either good or bad on the job, and what are you seeing in terms of either great decisions or bad mistakes from some of the folks you're shepherding now?

John Chambers: So it's always more fun to start with the good, so bear with me. Lessons learned. You don't focus on competitors, you focus on getting market transitions right. That's how we beat most all of our competitors. We combined technologies of routing and switching and security and wireless together in a way that our peers stayed in silos.

The second lesson is really be driven by your customers, and don't kid yourself about that. Every CEO says they have very good customer service. Yet less than 10% of their customers would say that they do. We lead in customer service. We had the highest margins in customer service and the highest satisfaction on it.

And the third is dream big and be bold. Easy to say. But by definition, you're also going to have failures. And you have to take risks or you don't survive in this world.

Biggest mistakes made, they're almost the reverse. Missed market transitions, too far away from the customers. Think you are entitled to your future. You're not. Forty percent of companies would disappear.

Mistakes for startups. Underestimating culture. Underestimating the important stuff, communications. But also with CEOs—and both groups and leaders in both groups—know what you know, and know what you, and realize they don't carry over. A startup, really engineering- backed CEO, a strong basis of it, he will do a terrible or she would do a terrible job picking out the head of sales because they would hire a business development person that talks a good engineering game. You got to have people around who complement your weaknesses and pull together as a team. You build a great team, great vision, customer driven, your odds are very high. You don't do that, your odds are failure or even higher, dramatically.

Greg Corombos: Last question for you, John, you've obviously been at the cutting edge of some of the most important advancements when you're at Cisco. And now you're helping some of these other folks who are going to break new ground in the tech world. If you can tell us, what concepts at least are you most excited about coming down the pike for all of us?

John Chambers: Well, I’m most excited that it's going to be a startup world, and that’s when the job creation will occur and at the possibilities of doing this, across all our 50 states, across France and India. And it shows you that countries that have traditionally not led might do it.

Key concept areas. Artificial Intelligence is going to be as big as you hear. You know, probably be one of the few technologies that will not be overhyped. One of the companies that is still in stealth mode in New York that I am coaching and investing in and helping them recruit a key person here this afternoon. Yet, they did a million in orders last year; they've done over 80 million this year. So huge upside.

I love setting impossible goals. World hunger, something I believe we have to address, and the environment, we have to address. We have crickets, perhaps the next form of protein for the world and the cleanest form you can get with one-tenth the damage that either the agriculture protein or the meat-type of protein generates.

And then security is a hot area. You see that again and again, in terms of opportunities.

Greg Corombos: Be fascinating to watch and, and how your clients and those who you partner with are going to be changing the world just as you did at Cisco. John, congratulations on the book. And thanks very much for your time today.

John Chambers: Greg, it was a pleasure. And last thoughts on leadership. Leadership is all about your track record, all about trust, and all about relationships. Nothing complex about it, making that happen. And you'll be a good leader

Greg Corombos: And you can expand on all of that in Connecting the Dots: Lessons for Leadership in a Startup World. It's written by former Cisco CEO John Chambers, who's now the founder of JC2 Ventures. I'm Greg Corombos reporting for Expert Insights.

 

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