Cisco’s push to keep innovating

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John Chambers had seen firsthand what happens when a technology company doesn’t keep up. He’d been a line manager at Wang Laboratories when the company collapsed after CEO and founder An Wang failed to adapt to new computer technologies sweeping the market.

john chambersMaybe that’s why Chambers survived both the Internet bubble burst in 2000 and the financial bubble burst in 2008, when so many of his colleagues did not: He refused to let the huge computer company stagnate.

For example, Chambers pushed Cisco to innovate in:

Videoconferencing. Cisco has unleashed TelePresence, a high-definition video system so clear that users can read the body language of videoconferencers halfway around the world. In an era of reduced travel budgets, TelePresence has been a hit, despite its $300,000-plus price tag.

Idea generation and sharing. Waiting for ideas from 65,000 employees spread throughout the world to bubble to the top would take too long, Chambers decided, so he set up Ciscopedia, the equivalent of Wikipedia for internal use. Now, Cisco employees can share ideas and build knowledge from a central database, from which some 500 senior managers make product decisions. The “entire leadership team, including me, had to invent a different way to operate,” Chambers says.

Acquisitions. Chambers acquired about 10 companies in each of his first 10 years as Cisco’s CEO. To choose the right targets, Chambers relies on a management team that provides him with fast and frank evaluations of high-risk purchases.

The result: Cisco, now a $46 billion company, replaced General Motors  as a component of the Dow Jones industrial average. About three-quarters of the world’s digital information flows through Cisco equipment.

— Adapted from The Eye of the Storm: How John Chambers Steered Cisco Through the Technology Collapse, Robert Slater, HarperBusiness.

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