in retail, no industry is untouched by the disruptive power of new technologies. We’re not just coping with new products and competition from places like China or Mexico. Every company is becoming a digital company. Every person on the planet has the potential to compete against a multinational—and win. With digitization, anyone can innovate and leapfrog the competition at a scale and speed that’s unprecedented. Once mighty companies have failed. America’s dominant position as a center of tech innovation is coming under threat as other countries start to move ahead. Even Silicon Valley’s position as the world’s leading hub for disruptive innovation is far from assured. As everything becomes connected, the rules for success start to change. How you adapt will determine whether you win.
It’s a mindset that shaped how I led Cisco. If you were to ask our customers what we did better than our peers, many of them would say that we moved quickly, with a sense of urgency, to get ahead of market transitions. We absolutely got knocked back on our butts a few times, but in each case, we came back stronger, as our competitors went bankrupt or got consumed. I’d like to say that we were smarter, faster, nimbler, more advanced, and perhaps even better looking than our rivals (you’ll get used to my sense of humor, or lack thereof, as you read this book), but the reality is that we recognized what was happening, responded, and learned to better spot what was coming and get ahead. We were one of the first companies to bet big on China in 1995. We were pioneers in outsourcing manufacturing because it made sense for our customers and enabled us to keep up with rapid growth. We’ve moved from selling routers to partnering with governments that wanted to transform their economies through digital innovation. A lot of people are scared by the next wave of innovation. They can see the threat. What’s less clear is how to respond.
It’s not unlike the challenges that hobbled West Virginia. The difference is that what I saw play out over the course of two generations there can now happen within a few years. I’ve been lucky to spend my career on the front lines of the tech revolution, seeing entire industries get disrupted and building a company that became the backbone of the internet. Now, I believe we are on the cusp of a revolution that will take the impact of the internet and multiply it—possibly by a factor of three to five—and play out faster than seems conceivable from the vantage point of today. The coming era of digitization represents an inflection point like no other in our history. The individual trends may sound familiar: artificial intelligence, virtual reality, Big Data, cybersecurity threats, drones, the Internet of Things, driverless cars, block chain technologies, and more. Put them together and the market shift will be profound. We’ve gone from connecting 1,000 devices to the internet when Cisco was formed to more than 20 billion today. Within a decade, some 500 billion cars, fridges, phones, robots, and other devices will be communicating online. The digitization of just about everything will force us to rethink all aspects of our lives—from our business models to our education system. If we don’t get it right, entire industries and even countries could be left behind. A few years ago, I predicted that the disruption would be so brutal that 40 percent of businesses probably wouldn’t exist in 10 years. I got a lot of pushback for that. In retrospect, I think I was being too conservative.
As I first learned in West Virginia, no person, company, industry, or place is immune from disruption and no one factor is to blame when it happens. And when it does happen, incredible opportunities are always created—both for emergent players and for incumbents. I’ve talked in these first few pages a lot about disruption from the lens of the incumbent. I am equally enthralled with the role that startups play in driving the disruptions and then growing, and the lessons they can take away to increase their odds. I believe that a thriving startup environment is critical to every country, and that tomorrow’s leaders will be those who nurture a healthy set of disruptors to move us forward. Over the coming pages, I will lay out a set of lessons—based on a lot of scars, moments of genius, and episodes of failure—that apply to any individual and leader in business today. If the lessons of my last few decades help even a few leaders, pioneers, dreamers, and change agents more successfully navigate the digital world in front of us, this book has served its purpose.
LESSONS/REPLICABLE INNOVATION PLAYBOOK
Disrupt, or be disrupted. Embrace digitization and new technologies that are transforming how you live, work, and do business. The pace and scale of disruption are increasing. Look for industry innovators, startups, new technologies, and—most important—shifts in customer behavior. You can’t plan for a world ahead if you are not investing in imagining it.
Keep learning. Education is the great equalizer. Make time to update your skills as well as your technology prowess by learning about innovations in your industry and beyond. If you are an employer, create opportunities for people at all levels to learn and innovate in the digital world.
Change before you have to. The worst mistake is to do the right thing for too long. The time to pivot is when your business is still healthy and you’ve earned customers’ trust. Try out new technologies, and embrace a philosophy of constant change.
Take risks and move fast. Better to stumble first than arrive last. First movers face the biggest risks but get more attention, opportunity, and leeway to make mistakes.
Be a magnet for talent. As an individual, be the person who’s known for embracing innovation and promoting change. And remember the adage, “People won’t remember what you say, but they’ll remember how you made them feel.”
Seek diversity in colleagues, neighbors, customers, and local industries. Company towns can die when the company goes away and like-minded people tend to reinforce existing points of view. Diversity breeds resilience and innovation.
Anchor on your core values and strengths, even as you question conventional wisdom. You can disrupt what you do and what you know, but always stick to who you are and what you value. Build on what you know, and use your expertise to guide you into new areas.
Anticipate failure. At times you will fail. Get up, dust yourself off, learn from your mistakes, and move on. How you handle setbacks is as important as how you handle success.
ACT LIKE A TEENAGER AND THINK LIKE A DYSLEXIC
(How to Spot Market Transitions)
One of the advantages of being a CEO in Silicon Valley for 20 years is that I got to see a lot of leaders when they were just starting out. Their businesses and their personalities are all quite different, but they share some common characteristics with a lot of the startup founders that I’m betting on today. If you think that they all came in with an impressive track record or flawless communications skills, you’re wrong. In fact, some of them were so green and lacking in those areas that it was easy for critics and competitors to write them off as inarticulate, naive, or even immature. What struck me was not their inexperience, but rather their insatiable curiosity and ability to handle multiple random data points at once. Along with possessing a bold, almost dreamlike vison for where they want to go, they have this distinct talent for moving from one topic to another with lightning speed, and possessing a bold, almost dreamlike view for their company. It’s the kind of nonlinear thinking that someone who is dyslexic, like myself, will find familiar. The most consistent similarity across every age and area of expertise was the mindset of these entrepreneurs: They came across as fearless, curious, and hungry for new ideas, with a desire to disrupt a segment of the industry. They were all about the future and determined to do things differently from the people who were in charge. Some seemed almost too impatient to stand still and none of them were satisfied with the present. In short, they acted and thought like teenagers—with all the enthusiasm, bold dreams, and ambition that most of us had at that age. Teenagers don’t believe in incremental change and the best leaders don’t either. They want to disrupt the status quo and are frankly audacious in believing they can change the world. I’ve seen that quality