Viewpoints

Leadership Lessons from John Chambers


November 19, 2018 –

What makes a great leader? Some would say it’s experience, or perhaps charisma.

When I hosted a fireside chat with John Chambers, former chairman and CEO of Cisco Systems, he highlighted another attribute: the ability to adapt. Throughout his career, Chambers was known as someone who quickly assessed situations, figured out what changes needed to be made, and took swift action.

Chambers joined Cisco in 1991, when it was still a small networking company. Over the next 25 years, he would grow it from hundreds of employees with only $70 million in annual revenue to more than 70,000 employees and $50 billion in annual revenue.

Over the years, Chambers took pride in recognizing market transitions and reinventing his own leadership style to suit the times. Being adaptable and actively looking for situations that demanded change allowed him to stay in his position for more than two decades, even as rivals came and went.

Chambers exemplifies another key attribute of top business leaders: He rarely takes a break. After leaving Cisco, Chambers has launched his own VC firm, JC2 Ventures, and captured his leadership advice in his new book, Connecting the Dots: Lessons for Leadership in a Startup World.

He and I spoke at an event celebrating World Economic Forum’s Young Global Leaders program. Here are some takeaways from our conversation.

Have a replicable playbook

 As companies scale, it becomes harder for them to move quickly. But now more than ever, that’s what business demands. One thing that slows companies down is people not knowing what to do in certain situations. Chambers says that when your company is good at something, focus on documenting the steps involved and refining it to the point where it’s replicable.

In Cisco’s case, Chambers says, the thing the company became expert at was making and integrating acquisitions. Under his leadership, Cisco acquired some 180 companies. About two thirds of those acquisitions were successful in an industry where most fail.

Cisco worked hard to develop and hone a process to identify and build relationships with promising companies, and execute deals faster than competitors. The company had acquisitions down to a science: get it in front of the board, brief the employees and prepare for the press. Then do it again.

“No company could do that,” Chambers said.

Have a near-death experience, and learn from it

 At the height of the dot-com boom, Chambers was a superstar CEO and Cisco was the most valuable company in the world. Jack Welch, the legendary chairman and CEO of General Electric told him he was doing a good job, Chambers recalls. The emphasis was on good, not great.

In December 2000, Cisco was still riding a high—70 percent growth in orders year over year. The numbers were solid, and it was hitting its forecast for the year. But by January 2001, purchases dropped to a negative 30 percent and customers stopped coming. “Twenty-five percent of my customers disappeared,” Chambers said at the event. “We were in free fall.”

He quickly and decisively restructured the entire company, and changes were announced by end of business day and instituted by day 51. By day 52, around the time competitors were first feeling the slow down, Cisco was gaining market share.

At the end of 2001, Welch congratulated him on his best leadership year ever.

“The key takeaway is you’re more a product of how you handle your setbacks and your mistakes, than you ever are of your successes,” Chambers said.

Make bets nobody else will

 Sometimes taking the right risk comes back to reward us, even if it seems an unpopular decision at first. Soon after assuming the CEO job at Cisco in 1995, Chambers made the decision to double down on investing in China. He was the only non-Chinese person to run a business in that part of the world.

This was during a time no high-tech American companies were interested in working there. Going against the grain, Chambers cultivated relationships with Chinese leaders and began some manufacturing there. Cisco thrived there over the next 20 years.

Later, he had the same goal of working with the Indian government, when other companies paid little attention to it. With 1.3 billion people, Chambers saw India going from follower to innovation leader in coming years.

More recently, he’s formed a strategic partnership with France—a European player few look to as a digital and entrepreneurial leader. After meeting with then-Minister of Economy Emmanuel Macron, Chambers knew in an instant he had found a partner who was willing to invest in change.

With decades of industry knowledge, Chambers has seen almost everything there is to see in business. His advice to startup founders: Don’t try to relive someone else’s story, create your own.

When thinking about your company, he said, write the press release you’d want to see three to five years from now. Define what success looks like, and list the three to five things you need to get there. It’s the first step to controlling your own destiny.

 

Originally published on LinkedIn.