Pond floats Cisco's boat
"During the downturn we've taken a good hard look at ourselves," said Pond, in the opening keynote to Cisco Networkers 2004, in Brisbane, on Tuesday. "We've become more inverted than we used to be, considering we've been an externally focused marketing organisation for our first 18 years. In the downturn, as the waterline went down we saw a lot of rocks we hadn't seen before. It's axiomatic that a rising tide floats all boats, but unfortunately, as the tide came back in we realised that some of our boats weren't floating as well as we would have liked.
"Productivity was not a theme that Cisco resonated with as an organisation. Over the years I would describe Cisco as a highly effective business if you looked at market share, revenue growth, profitability, asset management people growth but if you peel the covers back and look at the business we did not consider productivity - that was sort of the next step for us," said Pond.
As a result Cisco began to look at three focus areas, innovation, growth and the reduction of operating expenditure. This became known as The Drive to 35, or the company wide initiative to get operating expenditure as a percentage of revenue to below 35 percent from its current level of 37.5 percent and a high of 42 percent. Allied with this is the goal to lift productivity per employee from its current US$632,000 per head to US$750,000 and then to US$1 million, to be the high tech industry benchmark for revenue per employee.
From a productivity perspective there were many things that Cisco was already doing well, said Pond. -We had the benefit of good ERP, a world class network and driving applications and work to the Web is fundamental to how Cisco does business every day. We also do a reasonable job of data management. But when we looked at the other side, looked at process and alignment, we discovered we'd woefully underinvested. We did not measure business processes by a standard set of metrics, there was no report card on business processes at Cisco".
"Cisco's got a lot of stuff it has to do as an organisation. Culturally, the whole set of policy and business rules is very new to us. We don't like rules or policy, we're an organisation that could barely deal with guidelines. We've got to step up, this is a different level of maturity and mutual accountability that we've got to drive through the business to yield the impact on productivity it's going to have through the organisation," said Pond.
Darren Baguley travelled to Brisbane courtesy of Cisco Systems.