Cisco CEO says to change or ‘get left behind’
The chief executive of Cisco Systems Inc. said a decision to cut 4,000 jobs despite fourth-quarter profit growth was the most “difficult decision,” but necessary to help the company transition for the future in an inconsistent market.
John Chambers, the CEO of California-based Cisco Systems, spoke about company strategy, his perspective on leadership, his view of the future of the role of the Internet and about the pace of market change at a gathering of business leaders in Raleigh on Thursday.
“You can imagine how difficult that was,” he said of the move to cut the workers, one of a series of reductions for the company in the past several years. Attempts to determine the impact of the recent cut on the company’s Research Triangle Park operations were unsuccessful.
The network technology company is one of the largest employers in Durham County, with about 6,000 employees in North Carolina. In the fourth quarter of its fiscal year, the company reported year-over-year profit growth of 18 percent for a total of $2.27 billion. The company’s revenues grew more than 6 percent.
Chambers called the current economic environment “inconsistent” and said the direction of the economy is the hardest to read that he’s ever seen. Change is coming at an exponentially growing rate, he said, adding that he expects only three of the six top high-tech information technology companies to exist in a meaningful way in the next five years.
States also must grow, Chambers said, and their education systems have to create jobs or they’ll fall behind. He said he believes education systems must take advantage of social networking, large-scale classes and other technology to allow students to learn and collaborate.
“We as leaders must know when to stay the course, when to adjust and when to reinvent ourselves,” Chambers said. “If you miss that pace of change … in a company or in a state, (you’ll) get left behind.”
He said the next transition in the evolution of the Internet will be a move toward more involvement of Internet in every day life, with computers and the Internet allowing for more data in the health care field, in education and even in industries such as agricultural biotechnology. He described a vision of sensors implanted in fields of growing crops to measure and track water, fertilizer and plant growth.
The first stage of the evolution of the Internet changed how people communicate, the next was in online commerce and the third was in the growth of social networks.
He said this next stage is the “biggest of all.” It has the potential to change business logistics and the way companies bring product to markets.
He used the example of the application of the Internet for Wal-Mart Stores Inc. He said computer technology could be used to track when companies buy, where they hesitate and then to directly advertise to them with messages.
“This is where I think the future is,” Chambers said.