Cisco's CEO on Staying Ahead of Technology Shifts

In his youth Chambers had no interest in technology--until an IBM recruiter suggested that he think of it as a tool for helping customers transform their businesses. Then stints at IBM and Wang taught him that even great companies are imperiled if they miss a market transition, such as the shift from mainframe computers to minicomputers or from minicomputers to PCs. In the 20 years since he became Cisco's CEO, a whole series of transitions have occurred in the kinds of technology companies rely on and in how organizations consume solutions. Anticipating those transitions and getting ahead of them has driven Cisco's evolution from routers and switches to mobile and video technology to application-centric infrastructure and cloud computing. The company has three ways to adapt: (1) If it sees a shift early enough, it develops the new technology in-house, as part of the traditional R&D process. In addition, its Entrepreneurs in Residence program financially supports and mentors early-stage entrepreneurs working in areas where Cisco sees huge potential, such as big data analytics and enterprise security. (2) It may make an acquisition--as it has done 174 times. (3) It may use a "spin-in," assembling some engineers and developers to work on a specific project outside the company, as if they were at a start-up. "You have to be bold," Chambers writes. And you need "a resilient culture with an appetite for change."

• Digital transformation
• Market analysis
• Disruptive innovation
• Competitive strategy
• Leadership styles