Connecting the Dots: Leadership Lessons in a Start-up World. John Chambers

$95 million for one that was barely selling $10 million a year. It was a bold bet. Cisco stock took a hit. Many of the board members didn’t like it, either, and I put my job on the line to make it happen. If the deal had fallen through, as it nearly did, I almost certainly would not have stayed on to become Cisco’s next CEO, as planned.

      I don’t bring this up as proof of my skills in spotting winners, though I’m happy to pretend I have a sixth sense for this stuff. I bet my career on four people I didn’t know and a technology I hadn’t tried because we shared a bold vision for how together we could transform an industry, and I could see they had the talent, brain power, and audacity to achieve those goals. While Mario and I may have different strengths, both of us focus relentlessly on outcomes and try to maximize the conditions for achieving those outcomes. When I take bold bets, I never make rash moves or think in individual transactions. Everything is connected. It’s how my brain works. It also happens to be effective.

      To me, vision, strategy, and execution are like a chess game—a multidimensional, multiplayer chess game that’s being played with tremendous speed and interdependencies. Before I make a move, I play out the entire game in my head, and then I replay it under different scenarios, forward and backward, in order to anticipate not only my moves but the moves of others in the game. If you do that, you learn to anticipate the hurdles and see different ways to achieve the outcome you want. You also learn to recognize when an outcome is no longer achievable and make a decision to either change your strategy or even to concede the game and move on to another opportunity. To do that, you need to have first played out the game to the end, learn as much as you can about the other possible players to anticipate their actions—your possible countermoves—and build your strategy around the outcome you desire.

      For Mario and the Crescendo team, this approach also inspired an unusual concept known as the “spin-in.” That’s an independent startup, launched with seed money from Cisco, that would enable the MPLS team to recruit and incentivize top talent to work on a breakthrough technology and turn it into a developed product that would be sold back to Cisco, assuming it was successful. We did this three times, the first one delivering a billion-dollar-a-year product and subsequent ones each delivering multibillion-dollar-a-year products that were transformative for our portfolio and enabled entrance into adjacent markets. Could these products have been developed through the usual research and development channels? Maybe, but I don’t believe the pace would have been as fast or the ambitions as bold. Could Mario, Prem, Luca, and Soni have left to launch their own startup and made much more money? Definitely. Then we might not have had technology focused on filling our needs or first dibs on the results. What mattered to all of us was the outcome. To achieve big dreams, you have to take bold bets and focus on clear outcomes.

      In the previous chapter, I talked about the power of crowdsourcing multiple data points to get a better picture of patterns and trends. The most powerful source of data for me is always my customers. Further, the most powerful incentive for taking any bet is the customer. If my customer is interested in something new, I immediately become interested, too. Crescendo wasn’t even on my radar until Ford Motor Company started talking about how this little company had developed a “Fast Ethernet” technology that let you send large amounts of data over copper telephone wires at really high speeds. I had never heard of Fast Ethernet, but I knew about switches. These were the devices that connected computers, printers, and servers into a local area network that our more complex routers would then connect to the internet. As technology was evolving and networks became more interconnected, I felt the two product lines would either become more integrated or one would displace the other.

      A few weeks later, I was with a customer at Boeing who started to talk about the switching technology of the future. “Let me guess,” I said. “Fast Ethernet.” My customer was surprised that I was already aware of the new technology. As with any good sales call, I then asked what we had to do to secure a $10 million order that we were trying to get. It could be mine, the Boeing executive said, if Cisco bought Crescendo and included their technology in the deal. Now, I was really motivated to find out more—and fast.

      As the signals of a market transition increase, the need to take action becomes more urgent. As I thought about how this race to get scale would end up—essentially writing our own press release on the desired outcome—it became clear to me that acquiring Crescendo would not only break us away from the pack but also serve as the foundation for Cisco’s growth for the next decade. This was a market transition that, if we executed right, would allow us to leave our competitors and even our peers behind, and represented potentially a once-in-a-lifetime chance to lead the industry for the foreseeable future. As networks were becoming more complex, customers were struggling to connect a large number of vendors with different strategies and products that were not designed to work together. Suddenly, we would be able to provide the best router and the best switches, both designed to work together from one vendor. If we did this the right way, it was truly game over, although it clearly would require solid execution to make this vision and strategy work. This was clearly my decision with strong input from other members of the leadership team, one that, if it worked, would make the CEO position a given. If it didn’t, I would be held accountable for the results, as I should be. While this was clearly risky in most people’s opinion, once I’d played out the chess game in my mind, I had no doubt that it would work and was committed to making it happen and leading the industry.