Sunday, June 18, 2017

On Cisco Staying Ahead of Disruption

The “Cisco’s CEO on Staying Ahead of Technology Shift” reading this week was illuminating. Several things John Chambers said stood out. First, when he described IBM’s failure in efforts for the minicomputer he said: “That happened because IBM managers had quit listening to their customers.” I wonder how does a company such as IBM get to that point? Could it be a natural state for a large company or bureaucratic inertia? Looking at the 2017 Temkin Experience Ratings, the lowest rated organizations are primarily health care, cable, and Airlines. These are typically relatively large organizations. A key takeaway for me is that a customer experience strategy that is integrated across the enterprise is necessary. It doesn’t appear IBM did something in that arena. When describing implementing technology transitions Chambers said “The best indication of when to make the jump frequently comes from our customers. That’s been true in nearly every market transition.” For me, this emphasizes the need for a robust and operationalized customer experience strategy. Cisco has embraced this as Chambers goes on to say they are “putting customer outcomes at the center of everything we do.”

Second, Chambers said, “I learned what happens when companies lack the courage to disrupt themselves.” I think this is a very powerful point. While it is important to focus on and exploit competitive advantages, the idea that we must challenge our current assumptions is equally important. Could IBM or Wang have done better if the leadership had simply asked: “what are we going to do to transform our business?” Perhaps they did in some manner. However, based on what Chambers said and the results their efforts were not nearly enough. It is worth noting that he also points out disrupting yourself can be very difficult. This is something to keep in mind in strategic planning.

Finally, he ends with saying “By the time it’s obvious you need to change, it’s usually too late.” To avoid this, you must have customer intimacy, bold leadership, and an agile (“startup mentality”) culture. A question I have is, what if you don’t have those things? This article is a good argument that strategic planning can accommodate customer experience as well as organizational flexibility. Quickly adapting to change is a must in today’s IT market. The leadership gaps can be handled by bringing in new talent or focusing on culture. I also believe applying a simple “run, grow, transform” model to strategic planning could help organizations in these areas. By asking “what are we doing to run, grow, and transform our business” you can start the efforts Chambers discusses.

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