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Cisco's restructuring embeds operating committee, councils, boards and working groups deeper into Cisco's new management structure Update: 5-26-2011 Brian Schipper senior vice president of human resources bolts Cisco My take is that Cisco's convoluted Councils and Boards just got even more convoluted and will perhaps this time prove lethal to Cisco, causing a much more rapid deterioration in Cisco's business prospects!
Today, Allegis venture capital founder - Robert Ackerman, spoke about Cisco in the following Bloomberg article: Cisco Reins In Management System That Spurred Exodus at Top "They've got a culture that frustrates talented people. They've got a lot of talented people feeling like they're beating their head against the wall."
Cisco's Councils and Boards Councils and Boards Update: 5-12-11 Amazingly in my opinion, Cisco announced a major new restructuring that further embedded Cisco's convoluted operating committee, councils, boards and working groups deeper into Cisco's new management structure:
For example, Cisco's new management structure will now have the following 3 customer-facing Councils deeply embedded:
"Each Council will have two leaders, empowered through their functional roles with investment capability. We are aligning budget control to investment decisions, and Council leaders are accountable for the execution within their respective functions, and across the company." Moore continued, "Decisions on go-to-market strategies and customer value propositions to these markets will be made by the Council leaders in the context of Cisco's overall portfolio opportunities. "These Councils will determine which Boards are needed to support execution and alignment. Boards will focus on informing decisions and accelerating the execution of decisions through cross-functional alignment. Many of the Boards have made significant contributions to our business and will continue to play a critical role in our go-to-market and architectural direction." Moore added, "Only Cisco's three customer-facing Councils will have Boards. The charter of all remaining Councils and Boards should now be clearly in the scope of functional organizations, and will be absorbed into their respective functions." Moore concluded, "The organizational changes announced today allow us to simplify the Council and Board model to dramatically reduce the number of touch points and interlocks required to get things done." Update: 5-11-11 (Cisco's Q3'FY11 earnings call transcript)
"Yes, councils. So you went from 5 to 3. So you are streamlining them, but do you think -- are you contemplating perhaps eliminating them all together? Do you think more of a direct line management structure might be a better structure for the firm to get more direct accountability to the various divisions?" John Chambers "Let me have Gary go through it in just a second, but let me be very explicit. We went from 9 councils to 3 councils. And we went from 42 boards to 15 that we've moved the decision-making clearly into engineering and into sales for the decisions. We used the councils by customer segments, which are enterprise, service provider and emerging, and that's to connect our strategy to connect it with our operations. Clear decision-making is back in the functional groups and Gary has just done an amazing job here. So Gary, take us down one more level." Gary Moore "So I mean, at the high level, John hit it quick. So to come at it a different way, the key message here is we moved to functional leadership driving the 3 councils we have left. So Padmasree Warrior, who is one of the co-heads of all of engineering along with Pankaj, the 2 of them own the number along with -- Rob's organization that he announced. Nick Adamo, aligned to Pankaj, drive our customer-facing business with service providers globally. They make the decision, and they own the number so it's not a group thing anymore. That group, that council is there so that we can stay close to those customers, collaborate across the different functions that support them, but more importantly, get that feedback into engineering from a product point of view, as well as when we talk to you about our Service Provider business. We have to be aligned and competitive in the Service Provider business. Same thing in Enterprise. And so Padmasree Warrior and Paul Mountford will co-lead that council and they both have decision-making responsibility for both sales and engineering. The third council that we left in place is also customer-facing from the point of view. It is our emerging countries council, and that council is, again, helping to drive the transformation we're doing. We're setting up legal entities. We're doing a lot of work at Cisco to get things done to be able to operate in countries where we haven't had the infrastructure. I felt it was important to let that work continue on, and there's a lot of good people that are driving that. So again, we're holding the country leadership accountable to drive that, but we're giving them a forum to reach into. So elimination of 6 councils and 31 boards that we did is not the headline here. The headline here is the way we've changed the way we're operating to drive simplicity and agility into the organization. As John said, we're going to drive our earnings faster than our revenue. This is the way we have to do it." John Chambers "So simple takeaway in summary, we simplified the organization and operating model. That's what we just did, and we did it both with engineering, sales and also our services. We are using the councils and board purely as how you connect the strategy to the execution which, by the way, you need architecturally. We also recognize that the strength during one stage of your development, i.e. developing the visual products to compete with each other during the 90s becomes your weakness later. Councils and boards, we didn't evolve quickly enough where we needed to go on that. It allows us to align cost structure, it allows us to make better decisions in terms of who has ownership on divesting of underperforming assets the way we're set up, and bottom line it brings more value to our shareholders. That's what we're really focused on short and long term." Cisco's updated corporate organizational chart:
Worldwide Field Operations Cisco reorganized its Worldwide Field Operations team into three geographic regions to drive faster decision making with greater accountability and alignment:
Cisco Services The Cisco Services organization will continue to be led by Gary Moore. For greater customer focus, Services will have the same structure as the Worldwide Field Operations team.
This alignment includes:
Three Geographic Sales Regions
Delivery:
Advanced Services:
Technical Services:
Strategy Remains the Same:
Services Marketing and Communications:
Cisco Engineering Cisco's Engineering team will now be organized functionally to drive technology innovation, accountability, and alignment across all five of Cisco's priority areas (1. routing, switching, and services; 2. collaboration; 3. data center virtualization and cloud; 4. video; and 5. architectures for business transformation), and Cisco will no longer have a Development Council (CDO).
Within Cisco Engineering, a dedicated Emerging Business Group, led by Marthin De Beer, will focus on new and emerging businesses including TelePresence, Emerging Technologies, and Consumer. The Cisco Engineering organization under Patel and Warrior will continue to report to Gary Moore.
The changes across Cisco Engineering are effective immediately. The week of May 16th, Cisco Engineering will announce its next level of organizational structure. Resource allocation and profitability targets will move to the Cisco sales and engineering leadership teams, which will have accountability and direct responsibility for the business results. Over the next 90 days, Cisco will be announcing adjustments to support functions to align to changes across key functions, including operations, marketing, legal, human resource, finance, along with Council and Board focused roles. Related stories: Rifts between management and engineering appear to be depressing Cisco's stock price Cisco's FY11 global workforce reduction appears to have specifically targeted the United States California law firm warns Cisco employees: Do not sign severance agreement 1,826 Cisco WebEx and collaboration employees guillotined by Tandberg executives Cisco insight series: Expendable Cisco business units and employees Discord between Cisco engineers and Cisco technical marketing appears rampant Brian Schipper senior vice president of human resources bolts Cisco Cisco's 2011 voluntary enhanced early retirement program (EER)
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