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The Changing Face of Leadership at Cisco

The Changing Face of Leadership at Cisco. Randy Pond Executive Vice President Operations, Processes, and Systems January 30, 2008. Network Changes Way We Work / Live / Play / Learn Network Becomes the Platform… IIN All Forms Communication / IT into Network Enabling New… Business Models

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The Changing Face of Leadership at Cisco

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  1. The Changing Faceof Leadership at Cisco Randy PondExecutive Vice PresidentOperations, Processes, and Systems January 30, 2008

  2. Network Changes Way We Work / Live / Play / Learn • Network Becomes the Platform… IIN • All Forms Communication / IT into Network • Enabling New… Business Models Productivity Entertainment • Market Transitions… Customer Driven • Innovation… Build / Buy / Partner Collaborate • Technology and Business Architecture • Cross Functional Teamwork/ Prioritization • #1 Product Leadership • Lead Layers 1-7 Convergence… • Leader in All Customer Segments • Quad Play Everywhere… UC • Leader in Collaboration / Web 2.0

  3. Enterprise Line of Business Service Provider Line of Business Commercial Line of Business Consumer Line of Business Leadership Defined – Mini Silo-ed Cisco’s Dedicated Marketing, HR, IT, Engr, NPI, Finance Teams Cause Duplication … But Allowed for Quick Movement and Enormous Scaling Power

  4. Quality Council • Product Quality Systems Steering Comm. • BU-Specific Quality Councils • Etc. 146+ Product Quality • CA Bus Ops Entitlement • IOS Entitlement • Product Evolution Program (PEP) • Product IQ • Etc. 44+ Entitlement • Channels Gray Market Project • Brand Protection • Remarketing • Etc. 10+ Gray Market • Deals Desk Automation (DSA) • Oracle 11i Advance Pricing • BU Policy Update • Etc. 7+ Pricing Duplication Across the Business Business Issues Examples

  5. Boom Bust Buildout Revenue Pre-Tax Profit (Pro Forma) FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 Cisco’s Business Transformation History $B $K

  6. PRODUCTIVITY Web 2.0 Collaboration… The Next Market Transition Web 2.0Collaboration Production Transactions Interactions 1980’s 1990’s 2000+ Today 5% 15% 10% 3% 5% 3% 1% 1% Company Country

  7. Operating Committee Functional Leadership Marketing / Sales / CDO / OPS / CA / Finance CQC SPBC EBC CBC Cross Functional Teams Process for Process(DMAIC, RACI, SIPOC) Core vs. Context Process Definition (Levels 1, 2, 3) Portfolio Management Master Black Belts and Black Belts Foundational Project Management Shift to Functional Leadership Model BPOC

  8. Aligning Similar Initiatives and Coordinating Investments Developing and Deploying Cisco’s Corporate Business Process Framework Making Key Operational Policy Decisions Enforcing Decisions with Attention to Execution and Accountability Business Process Operations Council (BPOC) BPOC Is a Cross-Functional Operations Leadership Team Focused on Driving Enterprise-Wide Productivity through…

  9. John Chambers Randy Pond (Chair) Business Process Operations Council (BPOC) Kim Marcelis (OPS) Rebecca Jacoby (IT) Manny Rivelo (Sales) Andy Starr (Sales) Frank Calderoni (Finance) Karl Muelema (CA) Rob Redford (CMO) Jim Miller (Mfg) Don McLaughlin (HR) Pete Rukavina (Eng) Internet Capabilities Group • Increase Cisco’s productivity • Support BPOC operations Business Process Development Group • Accelerate Cisco’s process transition (frameworks, metrics, tools, training) Cross-Functional Team of Executive Leadership

  10. Evolution of the Business Process Operations Council (BPOC) Strategic Operations End to EndBusiness Processes • Coordinate requirements with business segment councils • Focus on corporate operations strategy Corporate Initiatives • Establishprocess infrastructure • QTC launchesas first level 1 process • Process improvement projects Foundational Projects and Quick Wins Planning • Fund initial PMOs • Resource prioritization • Accountability Obtain agreement to address: • Resource alignment • Resolution of escalations • Accountability for progress • Priority trade offs • Roadmap alignment and sequencing • Policy decisions • Executive mgmt attention to key issues Identify and Sponsor Aug 2002 Dec 2002 2003 2007+

  11. Growing Business Volume Increasing Complexity Escalating Risk “Continued Chaos” at Cisco Different Leadership Competency Needed to Succeed in Chaos

  12. Operating Committeeand Segment Councils BPOC and Functions Segment Councils and BPOC New Role for BPOCTighter Alignment to Market Strategy Company Business Plan • Governance • Metrics • Prioritization • Decision making Enablement (Policy, Rules) Market Segment Strategy Business Capabilities

  13. Process Re-engineering Touches Every FunctionCross Functional Integration and Partnerships Key Process Functions Customer Advocacy Engineering Marketing Manufacturing Finance Idea to Offering Customer Service Sales Market to Order Quote to Cash HR Forecast to Delivery Issue to Resolution Support the Business Simplify, Standardize, Globalize, Align to Priorities Commerce Transformation Optimization SOX Compliance Single Source of Truth (Financial, Employees, Products, Customer, Quality) Services / Software Entitlement / CA Unified Foundation

  14. SALES HR MANUFACTURING FINANCE BUSINESS PROCESS ERP E-SALES STORAGE IPT CORE SUPPLY CHAIN MGMT E-LEARNING SECURITY WIRELESS APPLICATIONSAND SERVICES NETWORKEDINFRASTRUCTURE Building Cisco’s Business Architecture for Productive Interactions Re-Engineering Processes Strategic Initiatives Tactical Execution Investing in Systems

  15. Risk Differentiation Core vs. Context Model Core Process Creates Differentiation That Wins Customers Context All Other Processes Mission Critical Process Shortfall Creates Serious And Immediate Risk Major Challenge Non-mission Critical All Other Processes

  16. The Cycle of Innovation Core Context Manage Mission-critical Processes at Scale Deploy Differentiation at Scale 2. Deploy 3. Manage Mission Critical 1. Invent 4. Offload / Repurpose Non-Mission-Critical Extract Resources to Reinvest for Core Invent Differentiated Offering

  17. Operations Gold Mine Growth Investments Innovation Operational Excellence Productivity Productivity Opportunities Lie in Context Core Context Consolidate Standardize Optimize 2. Deploy 3. Manage 1. Invent 4. Offload / Repurpose Resources Needed Here Resources Available Here

  18. Consolidate, Standardize, Optimize Non-SellingRepurpose Resources to Selling Core Context Non-Selling Context Work Consolidate Standardize Optimize Sales OPS 2. Deploy 3. Manage Mission Critical 1. Invent 4. Offload / Repurpose Non-Mission-Critical Repurpose Resources to Selling

  19. Customer Cisco Order Management Process Cisco Inside Channel Account Manager Cisco Account Manager Partner Purchasing Cisco Inside Sales Account Manager Credit Check Partner Account Manager Cisco Customer Service Cisco Field Sales Administrator Cisco Sales Credit Specialist Distribution Inside Sales

  20. Cisco Suppliers Partners Customers Idea to Offering Market to Order Quote to Cash Forecast to Delivery Issue to Resolution Support the Business Driving Productivity Across the Value Chain Inter-Enterprise Opportunities for Productivity

  21. What and how customers want Invest for customer Optimize for Cisco Collaborate to accelerate Cumulative portfolio approach Prioritize and deprioritize Customer-Centric Cisco-Centric Global mandate Cisco 3.0 Requires Fundamental Shift in Leadership Mindset

  22. Blueprint for Collaborative Leadership Discipline of Continuous Improvement Total Cisco Experience Customer-Centricity Operational Excellence Collaborative Leadership Employee Commitment Leadership Alignment Communications and Collaboration Change Leadership

  23. Cope with complexity and drive predictability • Effectively deal with change • Plan and budget • Set direction • Fit people to jobs • Fit people to vision • Transform people into new roles • Develop employee skills • Focus on controlling tasks and outputs • Focus on inspiring Don’t Confuse Leadership with Management

  24. In Closing • Opportunity lies in taking advantage of tremendous global opportunities • Process will help to lay a solid foundation • Collaborative Leadership will enable this new growth

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