Opening Case TEAMS AND INNOVATION AT CISCO SYSTEMS . Gee ane CEO ob Chambers ar wel naw for imcvaton Why are teams important and nv calaboration tecinclogie. for innovation? Cisco Systems was ranked 17th on Fast Company magazine's st of the 50 “World's Most Innovative Companies" in 2010." A global leader in networking solutions for the Interet, Cisco designs and manufactures Internet Protocol (P) based networking services, products, and solutions for businesses, acedemic institutions, consumers, and governments? Cisco stives 10 increase the speed and effiiency on Internet data transmission, colaboration, and video applications. Operating in a dynamically changing industry, Cisco is well known for innovation? For example, on March 9, 2070, Cisco introduced the Cisco®CRS-3 Carrier Routing System which allows for very rapid broadband communication of data, voice, and video transmission On November 9, 2008, Csco announced more than 60 new calaboration technologies? A major objective of Cisco isto innovate in existing markets and expand into new markets around the globe During the 2000s, Ciscos CEO and Chaitman of the Board, John Chambers, realized that for Cisco t0 remain innovative in 2 quickly changing industry during tough economic times, he would need to alter the way that decisions had traditionally been made at Cisco. A large company with over 60,000 employees.® decisions at Cisco were typically made in a top-down manner ty Chambers and other high-level managers. Realizing that it is extraordinary diffcut for 2 limited number of top managers to speathead large-scale innovation in multiple and complex markets atthe same time, Chambers recognized that far more employees needed to be involved in the decsior-making process.” Chambers developed a system of teams at Cisco that perform all kinds of tasks ranging from planning the future direction of the company as 2 whole to completing individual projects. The overall diection of the company is charted by Chambers and a team of 15 other top managers called the Operating Committee ® Nonetheless, the Operating Committee does not make all the important decisions at Cisco. Councils ate {d-member teams that can make decisions on prospective opportunities in the range of $10 bilion. Two members of each council are executive or senior vice presidents. Boards have around 14 members and are teams that can_make decisions on prospective opportunities in the range of $1 billon. Tivo members of each board are either senior vice presidents or vice presidents at Cisco, Numerous smaller teams having between 2 and 10 members are formed on a temporary basis to focus on specific issues or work on certain projects. When one of these working groups uncovers or develops an opportunity, the ‘roup presents the opportunity to one ofthe Boards for their consideration, This system of teams serves to involve more employees in the decision-making process with the aim to promote innovation in multiple business areas? As Chambers suggests, “When you have command and contro by the top 10 people, you can only do one or two things ata time. ‘The future is about collaboration and teamwork and making decisions with e replicable process that offers scale, speed, and flexibility. "!? ‘Councils and boards are formed with members from different businesses, functional areas, and sometimes even counties $0 a5 to have a variety of perspectives and points of view on opportunities and issues."" Organized around major intatives or product groupings, employees who have skills and experiences that could be valuable to the teams are asked (end required) o join them"? Ron Rice, a Cisco vie president formed a Board of sports fansto explore how Cisco could become more connected to the sports field. His 16-member board worked intensely together to create a new product that sports venues can use to provide fans with access to multiple high-definition video screens for customized live videos of games, promotions, advertising, programming, and other up-to-date and relevant information called StadiumVision."> Working with Cisco marketing and sales teams, the Board won contracts with major sports venues and teams for the launch of a multi-million dollar business in less than four months. '4 At Cisco, teams not only collaborate for innovation, but also respond to problems that arise. For instance, after China was struck by a devastating earthquake in 2007, teams helped Cisco quickly respond with aid. ‘= Headquartered in San Jose, California, Cisco also uses teams to expand into emerging markets. Wim Elfrink, Cisco’s Executive Vice President and Chief Globalization Officer, opened a second headquarters in Bangalore, India to aid in the staffing of teams striving to develop and sell products in emerging markets. '© From Bangalore, Elfrink recruits highly qualified engineers from emerging markets to work in teams that develop infrastructures and ne:works for businesses and governments in a number of different countries such Chile and Russia. After a team has developed a product for a business or government in another country, the team returns to Bangalore to modify the customized solution they developed to meet a specific customer's needs into a more generalized product that can meet customers’ needs in a variety of other countries. '7 Cisco uses financial incentives to promate collaboration both within teams and across teams. Accordingly, team members are motivated to have both their own teams perform well and also to contribute to the success of other teams for the overall benefit of Cisco. Teams are dearly a key aspect of Chambers’ goal to have Cisco excel in innovation around the globe. "®