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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 News.com 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.

Through Cisco's Leadership Fellows, you lend nonprofit groups, school systems or charities people from your staff while you pay their salary. This project was conceived of during the downturn in 2001 when Cisco had to lay off hundreds. Tell me more about why Cisco started this program.
Chambers: The Cisco fellows program went into charities and really streamlined their operations using their knowledge of networking to make them dramatically more productive. Some places saw efficiencies of 10-fold--not 10 or 20 percent but 10-fold--in terms of the number of people the charities could serve.

It's a very successful program which we have carried over to the 21 Century Schools initiative, a program to bring technology to schools rebuilding in Mississippi and Louisiana after Hurricane Katrina. So it allows people to take time off to go do good for society. But they are working on programs that are related to our expertise and that are programs related to Cisco's corporate approach. While I commend people for giving for any reason, we don't use a shotgun approach. We try to be very focused on doing a couple of things extremely well.

You've mentioned the 21st Century Schools initiative a couple of times already. Can you explain how that idea came about?
Chambers: Two years ago after Katrina, one of our people in a major meeting who was from Mississippi, said, "John, can't you all do something for us?" I was proud, because we were already raising a lot of money. So I said, "We're raising money." And she said, "No, you all have an ability to change the world. Can't you help us in a major way?"

I turned to (Corporate Affairs Vice President) Tae Yoo and her team and said, "I want results back and within a couple of weeks." They came back with the whole 21st Century Schools Systems proposal. And then they said they needed $40 million. "I said 'that's a lot of money.'" And Tae said, "Well, we're also going to ask you and (Chairman Emeritus) John Morgridge for $12 million of it." So John gave $10 million, and I gave $2 million.

Last September after the upheaval in Lebanon, Cisco was one of five U.S. companies that teamed up to form the

Chambers: For one, countries need you the most not during good times, but during their most challenging times.

Secondly, if you can't address these issues in a country with over 7 million people that has a history of great education, has been the gateway between Europe and Asia, and has an ability to support multiple cultures, then where can you ever make it work?

The third reason we went there is that the President of the United States asked us to lead the presidential delegation. He asked business to do it, not government, because he knew we'd approach it with a very creative idea. And he said, "I'm not sure what your answer is going to be, but come back and give us recommendations." But honestly, if you can't address these issues in Lebanon, how do you ever address them in Palestine?

You think economics is the way to fix problems in the Middle East?

Chambers: Economics, education and basic needs. And you have to work together in groups. We are working with Intel, Microsoft, a bunch of NGOs. And you need to work with countries, whether it's Turkey, Jordan, Saudi Arabia, France, Germany or the US.

The power is in collaboration. This is what I've become a believer in, that what you see in the business world in terms of collaboration, you will now see in charity. The Clinton Global Initiative has got it right. They don't understand yet how to use technology in a way that will help, but President Clinton is probably the smartest political leader I have ever met, and he understands that there is a way to make this go.

Cisco has seen some success with many of its "socially responsible" endeavors. Is there a common thread among all these programs?
Chambers: Yes, they have all been a combination of public and private efforts often with NGOs and often with groups that you wouldn't think of working together. They have all been not a one-year commitment or even two, but they are usually five-to 10-year commitments. They start with a vision of what is possible. And a question about how you are going to address the problem differently. And finally, we have a fanatical approach on measurement, whether it's the number of students advancing or the number of houses built or student satisfaction.

We can use the network academies as an example. This program was started by one person's idea in Arizona. Ten years later, there are 2.3 million graduates, 575,000 people in the program, and 10,000 academies making the difference everywhere in the world.

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