Newsmaker: What makes Cisco run?

Does Cisco Systems CEO John Chambers know something about his company that continues to elude most of Wall Street?

Given the investment community's propensity for herd behavior, Cisco may be one of the most underestimated big-name technology stocks out there. The networking giant finished last week trading near its 52-week low, even though it continues to rack up record sales and earnings.

But after living through the go-go days of the bubble and the desperation of the post-dot-com recession, Chambers remains convinced about the best way to manage the company through good and bad.

Taking his managerial cue from former General Electric CEO Jack Welch, Chambers, who took over as chief executive in 1995, has been at the helm as Cisco's annual revenue has soared from $1.2 billion to its current run rate of close to $24 billion.

Chambers recently sat down with CNET reporters and editors to talk about his management philosophy as well as his plans for steering Cisco through the latest round of consolidation in the technology industry.

Cisco keeps talking about being a growth company, but shareholders haven't been as impressed. The company hasn't grown the way they would have hoped. How do you address those concerns?
Chambers: It's hard to grow faster than your segment of the industry. Yet, year in and year out, we've grown faster than our segment of the industry in each category.

We've been growing pretty consistently in terms of our orders, and we think we will grow at 10 percent to 15 percent. Our order rate has been in that range for the last six quarters in a row.

But Cisco isn't that little scrappy start-up anymore, is it?
Chambers: No. But if you look at it mathematically, we have six advanced technologies, which we've gone into, where we lead. To the best of my knowledge, there has never been a major IT company that

I think what you're seeing now is just a period of uncertainty about growth rates and then a period of uncertainty about the economy overall.

is the leader in more than one or two product areas. Each time we move into the market, we become the No. 1 player, almost without exception. That has never been done before.

If we were a start-up with those types of growth numbers, with three of these groups approaching the billion-dollar-a-year run rate, the stock would be a different value. So that's pretty good.

Why do you think Wall Street is not getting the message?
Chambers: I think Wall Street always gets the message. The issue is, at the present time, there are a lot of people looking at what the most recent quarter might be. But we don't run our business on a quarter by quarter or month-by-month basis. We run it for the long-term.

Time will tell if our growth rate is in the high single digits, where the market clearly has us, or if it's in the 10 percent to 15 percent range--or potentially, even slightly above that.

One quick follow-up question: Will stock-option reporting affect Cisco?
Chambers: No one really knows...We deal with the world the way it is. We'll adjust either way, and we'll adjust based on what the

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You go JC!!

From a Cisco employee's perspective, I really appreciate what John Chambers has done for the business and for the company culture.

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You go JC!!

From a Cisco employee's perspective, I really appreciate what John Chambers has done for the business and for the company culture.

A Great Leader

I have worked under Johns leadership for 10 years. He is an inspiration.

I find it interesting that he mentioned his admiration for Colin Powell. I read General Powells A Leadership Primer a few years ago and thought John Chambers leadership style really fit his description of a great leader.

Fitting excerpts from the primer:
Strategy equals execution. All the great ideas and visions in the world are worthless if they can't be implemented rapidly and efficiently. Good leaders delegate and empower others liberally, but they pay attention to details, every day.

"Fit no stereotypes. Don't chase the latest management fads. The situation dictates which approach best accomplishes the team's mission."

"Perpetual optimism is a force multiplier."
"The ripple effect of a leader's enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a "what, me worry?" smile. I am talking about a gung-ho attitude that says "we can change things here, we can achieve awesome goals, we can be the best." Spare me the grim litany of the "realist," give me the unrealistic aspirations of the optimist any day.
Thank-you John for your excellent leadership!

A Great Leader

I have worked under Johns leadership for 10 years. He is an inspiration.

I find it interesting that he mentioned his admiration for Colin Powell. I read General Powells A Leadership Primer a few years ago and thought John Chambers leadership style really fit his description of a great leader.

Fitting excerpts from the primer:
Strategy equals execution. All the great ideas and visions in the world are worthless if they can't be implemented rapidly and efficiently. Good leaders delegate and empower others liberally, but they pay attention to details, every day.

"Fit no stereotypes. Don't chase the latest management fads. The situation dictates which approach best accomplishes the team's mission."

"Perpetual optimism is a force multiplier."
"The ripple effect of a leader's enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a "what, me worry?" smile. I am talking about a gung-ho attitude that says "we can change things here, we can achieve awesome goals, we can be the best." Spare me the grim litany of the "realist," give me the unrealistic aspirations of the optimist any day.
Thank-you John for your excellent leadership!