The press adores Cisco and for good reason.
$33.5 billion of cash, cash equivalents and investments on its balance sheet.
66,558 employees worldwide.
Ranked #1 on 2009 Fortune List of most admired networking communications companies.
Ranked #6 on 2009 Fortune List of 100 best companies to work for.
Its Chairman and CEO John Chambers ranked #28 on the 2009 TIME 100 List of the world's most influential people, just ahead if you can believe it of #29 ranked Kate Winslet, even more remarkably ahead of #30 ranked Britney Spears, however most importantly and perhaps most scandalously, ahead of #41 ranked Miley Cyrus (i.e. Hannah Montana).
Ranked #31 on 2009 Fortune List of most admired companies.
Ranked #57 on the Fortune 500 List in 2009.
Cisco just oozes the image of success. A company that the adoring press considers to be at the top of its game. Heck just this week, Cisco announced its new pursuit of building out smart grid utility networks, a $100 billion opportunity according to Cisco.
Earlier this month, Business Week published a book excerpt written by author Jim Collins:
How the Mighty Fall: A Primer on the Warning Signs
Watch Video - 5 Stages of How the Mighty Fall
After reflecting on the video and studiously examining the 5 page book excerpt, I'm thoroughly convinced that Cisco has entered the 5 Stages of How the Mighty Fall.
Stage 1: Hubris Born of Success
Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.
An Example of Cisco Hubris:
Fast Company December 2008: Taken to its ambitious conclusion, Chambers wants customers to remake their companies in Cisco's image, a prospect possible only because of their dependence on Cisco technology. "Without changing the structure of your organization," Chambers told the analysts in September, "I would argue that [innovation] will not work."
Stage 2: Undisciplined Pursuit of More
Stage 2 leads to more scale, more growth, more acclaim, more of whatever those in power see as "success."
"We're so great, we can do anything."
An Example of Cisco's Pursuit of More:
Business Week May 2009: Chambers tells BusinessWeek that Cisco likely will hit a total of 50 fresh markets within a year. "We're moving into new [areas] with a speed nobody has ever attempted," he says.
Stage 3: Denial of Risk and Peril
As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to "explain away" disturbing data or to suggest that the difficulties are "temporary" or "cyclic" or "not that bad," and "nothing is fundamentally wrong." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data.
An Example of Cisco's Denial of Risk and Peril:
Starting with a 2007 sales base that was $22 billion less than Cisco's 2007 sales base, Huawei grew its 2008 sales $880 million more than Cisco grew its 2008 sales. For the first 9 months of its FY09, Cisco net sales plummeted $1.59 billion while simultaneously Cisco net income sank $985 million.
Stage 4: Grasping for Salvation
The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.
Stage 5: Capitulation to Irrelevance or Death
The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future.
I believe Cisco has entered Stage 3 of How the Mighty Fall, what's your opinion?
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I would say "Stage 2"
I used to run this annual poll for Network World for the Power Issue which asked users to name the most powerful companies. Five, six years ago, their users loved, loved, loved this company. Cisco was the champion of Internet standards and interoperability in the days when high priced IBM had previously ruled the networking scene with proprietary gear.
Now, however, that has switched (excuse the pun). The tide of user frustration is rising and still Cisco preaches itself as a one-stop shop -- which is exactly what users who fled to Cisco didn't want back-in-the-day.
I don't know that the company is headed for a fall (we'll see if that happens if Chambers ever leaves), but I can see how it might be on this five-step path.
Julie Bort
Online community editor
You so nailed this on the
You so nailed this on the head. I feel like I'm sitting in an Amway presentation everytime our Cisco SE's roll in. It feels more and more like a cult.. like pipe dreams.. and for any of it to work you have to be Cisco top-to-bottom, front-to-back, side-to-side.
This is why we are deploying other vendors in our network now. Adtran, Juniper, and HP are all approved vendors for us now, and we are definitely throwing some seed down to see what grows...
Stage 3 sounds about right
Hopefully Chambers stays out of politics and keeps everyone focused. He seems to be exploring at the expense of 66K workers.
Chambers keeping everyone focused?
Obviously, Cisco CEO John Chambers is the "poster boy" for keeping everyone at Cisco focused:
Just think, should American voters elect John Chambers as President of the United States, we could fight 50 wars simultaneously!
Sincerely,
Brad Reese
BradReese.Com Cisco Refurbished
Linking war to Sales?
A new low Brad.
For someone who loathes Cisco yet maintains Cisco Subnet, who takes every chance to bash them yet makes money on Cisco refurb equipment, I don't see what your deal is.
One thing I find funny is how you try to sell Adtran products on your website, yet your core business is reselling Cisco.
http://www.bradreese.com/cisco-vs-adtran-savings-comparison.htm
Are you really that confused about everything in life. Don't answer, we don't care.
Guess Your Right
Perhaps I need to enter 50 markets simultaneously to become unconfused.
Sincerely,
Brad Reese
BradReese.Com Cisco Refurbished
Wow
You said the same thing again? Is there an Echo in here?
I guess maybe you realized someone else other than yourself may have a valid point. Good on ya.
Check out
THE BIG BRAIN ON BRAD!!
Agree with you, I'm totally brainless
Hi Ksmutra,
Agree with you, I'm totally brainless.
Meanwhile, the brainy Cisco is losing market share across the board:
Cisco expected to be more aggressive after Q1 share losses
Oh well, being brainless has had its advantages for me, I can slip my shoes and sneakers off easily because they don't have shoelaces, as I never could figure out how to tie a darn shoelace!
Sincerely,
Brad Reese
BradReese.Com Cisco Refurbished
So Many Lessons to Be Learned
Cisco has always said it listens to its customers, the issue here is they are highly selective about which they listen to.
Internally and externally the company suffers from both a lack of "truth to power" and any mechanisms to translate that to action. It's become a "true believer culture" where personal politics, rather than true achievement or contribution determines who is put in a position to make important decisions.
Its "culture of collaboration" is a farce, meant only to promote the use of its associated products, WebEx, TelePresence, etc., since its bread and butter (switching and routing) are no longer differentiated from the competition except by the proprietary attributes that lock its customers into its orbit.
Moving a $40B company forward at any substantive pace is hard, and even harder these days, so perhaps it was unavoidable that the company moved from growth through innovation and true technological advancement to a focus on "brand" growth and "advanced technologies" (a thin layer of flash atop a foundation of routers and switches that enables "category" definitions to be changed and numbers reorganized).
That Chambers will be an effective and attractive educator when he leaves the company is inarguable. Whether or not he will be able to bring an honest assessment of the rise (and inevitable pending fall) of the company that he created to bear on that experience is the real question. If so, that may be he his greatest contribution yet and the real keystone to his legacy.
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