A lesson on 'the power of collaboration' from Cisco

By Kay Plantes

Cisco, a large company that provides Internet networking and communication equipment, faces multiple market changes, any of which can significantly disrupt its market.

One example is the growing use of Voice over Internet Protocol, or VoIP, networks. To maintain its leadership, Cisco needs to recognize market transitions early and develop new product platforms to address changing customer needs.

To accomplish this, John Chambers, Cisco's CEO, knew that he and his leadership team would need to change first. He surrendered his top-down, command-and-control style of leadership to build a collaborative culture in which cross-functional teams lead change.
"It's not possible for an organization to scale and take on more when only one person is driving all the strategy. When you're a command-and-control CEO, individuals impacted by your decisions can choose not to buy in and either slow, or even stop, the process," says Chambers in the November 2008 Harvard Business Review.

Furthermore, hierarchical leaders make poorer decisions than a collaborative team of leaders.

Cisco is now run through three levels of cross-functional teams: Councils at the top, then Boards reporting to Councils, then Work Teams that carry out tactical initiatives.

For example, a Council of nine Senior VPs, each responsible for an engineering division, runs engineering. There is no VP of Engineering.

An Operating Committee composed of senior leaders oversees the work of Councils.

Any new initiative must be presented to the Operating Committee for approval, accompanied by a business plan that articulates the initiative's vision, the strategy for securing a #1 or #2 market position, and the 12- to 18-month execution plan.

"The power of collaboration," he reflects, "is not in adding more people to the process but in getting immediate input from smart people and thinking through a problem as a group." Because team members speak for their entire functional organization and can therefore make decisions quickly, the organization is far more nimble. Fast decision making enables Cisco to lead market changes, rather than risk a new entrant displacing Cisco.

The more collaborative culture and management structure have expanded Cisco's capacity to execute change.

Before, the organization could handle three to four key initiatives a year; now, it handles 22 key initiatives.

The switch in operating structure was enabled by factors such as aggressive adoption of Web 2.0 tools that enhance collaboration.

At Cisco, employees can host virtual meetings with others across the globe at any time - top leaders even have video meeting cameras in their homes.

Chambers also measures and financially rewards leaders not on their individual performance, but on the success of the cross-functional groups to which they belong.

Finally, while decisions about what actions to pursue and how to pursue them are made collaboratively, individual execution leaders are assigned to drive agreed-to execution plans.

Chambers represents leadership on the cutting edge, a cutting edge that will become the norm for effective management in rapidly changing markets. Generation X and Y talent will flock to collaborative-culture companies, where they'll be able to make a difference.

Culture is observed in how the leadership team resolves its conflicts.

Does the CEO rule? Do leaders take turns winning? Does the loudest voice win? Or do leaders use conflict to learn and then unearth better decisions?

No one person has the best answer. Remember this and you'll be collaborative.

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