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A Cisco engineer says changes at Cisco are good

From one long-term employee's view, the old Cisco is on its way back to town.

While attending the Cloud Leadership Forum in Santa Clara this week, I had lunch today with a Cisco engineer who has worked for the company for 11 years. He was strikingly optimistic about the company, telling me that it feels like the old Cisco from about eight years ago is coming back. "Crises is good," he told me and then recounted a whole list of positive changes as a result of Cisco's recent reorganizations. He says he feels the company is becoming less scattered on experimental markets for growth, and more focused on its core routing/switching, network engineering roots (although he remained candidly critical about some aspects of the company).

I'll summarize the points he made.

Chambers isn't perfect but is making some good leadership choices. Whereas Chambers was previously surrounded by yes men/women and lots of high-level managers with Titanic-sized egos, many of them have left. The CEO has now implemented a "no submarine" policy. His senior leadership is free to discuss any decision before it is made, but once it's made, all of them have to be on board. No more agreeing to decisions in meetings and later badmouthing, or undermining the plan. Interesting! About a year ago, I wrote about ShoreTel CEO John Combs, who famously practices the very same policy. It's a good idea for Combs and for Chambers -- and every other manager.

Managers are no longer quibbling about "if" more resources should be reallocated from some areas or departments to core networking products and services, though they may still be arguing over how much they will lose. This is hopeful. They all understand that at its roots, Cisco is a network gear company.

Groups are being better aligned. The people that should have always worked together are now being shifted so that they do. Better late than never, but it's having a positive effect on the workforce.

It's good that Cisco is making these much-needed changes, but this engineer felt (and I agree) that Cisco suffered from overreaction. The stock has been bottom feeding (undervalued?) for years. But the poor results that caused Cisco to shout fire weren't all that bad. The company posted 3Q profits of $1.8 billion and was sitting on about $40 billion in cash in March (encouraging it to pay out its first-ever cash dividend of 6 cents a share).

On the other hand, it's not all roses either. No one understood why Chambers closed Flip, but when I mentioned that 500-plus people lost their jobs, this gentleman was not concerned. "They have the skills that Apple wants," he noted. Score one for Apple and hopefully for the employees. We both agreed that it seemed as if Chambers was trying to prove a point that he was capable of making hard decisions.

Now that the company seems to be righting itself, this engineer would like to see the following changes be made:

Internal IT systems are in sad shape. Cisco employees used to have access to IT systems that were the envy of Silicon Valley. But a couple of years ago, the bean counters got a hold of it. They drove costs from it by making it cheap and not investing in the latest, greatest. While I think it's not bad for Cisco to have gone through a process that more closely resembles the typical enterprise, this employee notes that the company has brilliant engineers designing world-class network systems on aging PCs and infrastructure. Private clouds? Not yet.

This gentleman felt that Cisco took its eye off the ball with Juniper, giving up more market share to its rival than it should have. I'm sure Juniper doesn't feel the same.

I left the conversation feeling better about the direction of Cisco, the bellwether of the network industry. I hope that Cisco's customers and channel partners start feeling the love, too, but it all begins with the employees.

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