Good for business, good for society?

Cisco CEO John Chambers talks about working with start-ups and charities, plus using Cisco gear to teach tech skills.

NEW YORK--Corporate social responsibility has become a buzzword as multinational companies focus not only on increasing their bottom lines, but also on issues of social importance, such as education, health and combating poverty.

Cisco Systems' CEO John Chambers is at the forefront of these efforts. Earlier this month, he was one of four recipients honored with the Inaugural Clinton Global Citizen Award.

The award was presented by President Bill Clinton as part of the Clinton Global Initiative program, a nonprofit endeavor started by Clinton in 2005 that brings together a diverse group of leaders to formulate innovative ideas for solving the world's pressing issues. The Clinton Global Initiative meets every year in September during the United Nations General Assembly in New York.

Chambers was selected for the award for spearheading a diverse portfolio of programs, primarily focused on using technology to meet basic needs such as food, water and shelter, and enhance global education and socio-economic development. CNET sat down with Chambers while he was here to receive his award. He discussed his philosophy of corporate social responsibility and how it fits into the profit-driven world of corporate America. The following article is an edited version of the interview.

What role should corporations play in making the world a better place?
Chambers: I believe that those who have been successful are obligated to give back to those who have been less successful. That's what my family believes. That's what I believe. That is what Silicon Valley believes. When Cisco first started, Hewlett-Packard helped us a lot. I was a little company then, and after a year and a half I finally had the courage to ask (because I was afraid that if I asked they might stop): "Why are your top executives spending time with us?" And they said, "Because it's the right thing to do."

Was it really just that it was the "right thing to do" or did they think it would benefit them in some way?
Chambers: They did not believe it would benefit them at all. And I asked them what I could do to give back to them. And they said, "Help the next generation."

And that's what I am doing. In Silicon Valley and around the world, I spend time with new start-up companies. For example, Randa Ayoubi, CEO of the educational company Rubicon in Jordan, is someone I have mentored. She developed a curriculum for math in both English and Arabic based on computer games. Children in first, second and third grade can learn math in a way that we can and ought to be following in the U.S. What was exciting is (that) her companies revenues have gone up 40-fold since we started working together. She was named Arab entrepreneur of the year in 2005.

Companies should only do what is in the best interest of their shareholders, employees, customers and society as a whole. It's a balancing act.

One of the things that made me most proud is that she grew her company from a couple dozen employees to 180 employees, and she gave back to them. She said, "John, that is what I have learned from you all, that it isn't just about the leaders or the owners doing well, but it's about the whole company sharing in it too. And I wouldn't have done that if hadn't been for Cisco." And all of a sudden you have people getting cars that never could have afforded (them) otherwise.

But this speaks to the fact that, whether on a small scale or large scale, it's important to give back.

The Networking Academy Program program is another example. We went into Afghanistan and started with about two dozen students who had not been in school for six years. Within six months they were making identical scores to students in top U.S. schools. Women were scoring at the very high end of that, too. And it shows that if you give people a chance to participate in the economy, they can achieve regardless of gender, geographic region or age.

The Networking Academy Program essentially trains potential IT managers to use Cisco equipment. So in many ways it benefits the company directly. It's the same with other initiatives like the one on reducing carbon gas emissions. The proposal submitted for the Clinton Global Initiative reads like a marketing brochure for Cisco's telepresence products. Where do you draw the line between "doing good" and simply serving your own interests as a company?
Chambers: I would word it differently. If you don't go into an area where you have expertise it's very difficult to provide the efficiency that I believe you should provide. So when Cisco goes into an area, we try to relate it to networking so we have a leverage factor of 10 to 1 in terms of dollars spent. For example, in the 21st Century Schools program we made an investment of $40 million, but we expect to leverage that 10-fold in results. We have statistics that say that 96 percent of the teachers in that program believe their students are better prepared now than they were before Katrina.

And in the Network Academies, 90 percent of the student say they use the skills they learned on a regular basis. And 70 percent of students say they have gone on to higher education because of the network academies.

But the Networking Academies also produce a work force ready to buy and use Cisco equipment, which benefits your business, right?
Chambers: Well, there's a shortage of trained networking professionals. About 600,000 networking professionals are needed today and by 2012 the number will be 1.1 million. So the program trains people to be involved in the Internet and participate in the economy. But it makes sense for us to stay in our area and contribute what we understand and where we have expertise. Might it benefit us in the long run other than just doing the right thing? Yeah.

So you admit Cisco's social responsibilities are also good for business, and you think that's acceptable?
Chambers: Companies should only do what is in the best interest of their shareholders, employees, customers and society as a whole. It's a balancing act. And so I am a believer that you should do what's right, because it is the right thing to do. But it's also good for business. And it's important for business to understand that.

I have had a number of government leaders and a number of business leaders say, "Part of the reason we do business with you is that we trust you, we like you and you give back."

When we went into the Middle East King Abdullah said, "John, thank you for helping, you'll make a lot of money in Jordan and the Middle East." And I said, "Your Majesty, I will definitely not make money in Jordan and probably never will in the Middle East."

Jobs will go where there is the best-educated work force, the right infrastructure, and a focus on innovation and supportive governments.

And I was very wrong. Our revenues in the Middle East are growing 70 percent. But the key message here is that doing good is not only right, it's the right thing for business.

You've said that broadband and the Internet are society's great equalizers. But how does broadband eliminate poverty or provide better-quality health care?
Chambers: Broadband is only a piece of the solution. You have to address problems like an algebraic equation. Education alone will not fix poverty. Infrastructure alone will not fix poverty. Catching market transitions and creating environments of innovation alone will not fix poverty. And supportive governments will not. But all of these working together can. And you've got to address all of them at the same time.

Broadband enables health care to be brought to remote locations whether it's fixed or wireless. It allows education to be brought to remote locations. It allows farmers and teachers and others to participate in a global society regardless of location.

Jobs will go where there is the best-educated work force, the right infrastructure, and a focus on innovation and supportive governments. I think many people look for a silver bullet to solve a problem, but it has to be a joint approach. And it can't be solved with a one-year mentality; (instead,) it will probably take five to 10 years.

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