Cisco's CEO takes center stage

CEO John Chambers may lack the star-power of Oracle's Larry Ellison or Apple's Steve Jobs, but that hasn't stopped him from taking center stage to further the aims of his high-flying company.

5 min read
It is less than an hour before the leader of one of the most highly valued companies on Wall Street is scheduled to give a speech he has delivered on numerous occasions, but Cisco Systems' John Chambers wants to go over the material one more time.

In a dark, empty conference hall in downtown Los Angeles, Chambers recites his speech on the changes the Internet has wrought with the help of two members from his technical staff, while nervously pacing the stage.

Chambers, 49, may lack the star-power of Oracle's rambunctious Larry Ellison or Apple Computer's Steve Jobs, but that hasn't stopped him from taking center stage as an industry spokesman to further the aims of his high-flying company, and the Internet as a whole.

Cisco, now measured to a large degree in lofty Internet terms, has never been the center of the technology spotlight in part because of what it does: provide the esoteric networking systems that allow computers to talk to each other. In other words, few would care if Cisco packaged their routers in an iMac-like tangerine.

But as the technology world becomes more networking-oriented, Cisco has found itself at ground zero of a connection-related boom. It has also become one of the most highly valued businesses in the world, with a current market capitalization approaching $190 billion.

Yet at the same time, it has become one of the most scrutinized. When the company failed to announce a stock split this past February--barely six months after its previous split--its stock dipped.

That scrutiny has also increased the pressure on Cisco and its chief to maintain momentum in a fast-paced business, where companies can be left behind just as quickly as they can succeed. Chambers, who joined Cisco as executive vice president in 1991, has been thrust to the fore to lead that charge.

Some would argue that a company can mask its deficiencies through an adept understanding of marketing, public relations, and the media. But, in the case of Chambers and Cisco, the company has competed successfully even before it started a dedicated marketing drive.

"There are larger-than-life people that have emerged in the technology industry," noted Don Valentine, founder of venture firm Sequoia Capital and vice-chairman of Cisco. "I think John, given his preferences, would just like to visit customers."

"His appearances have ulterior motives and they're to advance the cause of the company, not John Chambers," Valentine added.

But Chambers' profile within industry circles and beyond is largely a function of the times. Cisco increasingly finds itself at war with much larger rivals as it drives to take a chunk of the market for equipment that can handle voice, video, and data needs.

Chambers' recent speech at Spring Internet World '99 in Los Angeles is only the latest in a string of unexpected appearances for the chief executive. He has also spread Cisco's gospel at such consumer-focused industry gatherings as the Consumer Electronics Show and at the mother of all technology conferences, Comdex.

"It shows you how things have changed," Chambers said in a recent interview.

Cisco's competitors are increasingly large multinational telecom equipment firms like Lucent Technologies, Nortel Networks, and Siemens, as well as more traditional foes such as 3Com and Cabletron Systems, among others.

While some competitors have fallen by the wayside, others have set their sights on Cisco--and vice versa. And with networks expected to converge, the San Jose, California-based firm is not viewed as the powerhouse it once was when it first conquered the data networking world, according to analysts.

"I think Cisco really wants to elevate itself in the market," says John Armstrong, analyst with market researcher Dataquest. "Now Cisco's competition are companies that are much larger than it is. They don't want to get lost in the shuffle.

"They have a real challenge on their hands," Armstrong noted.

Changing roles
Chambers said he now spends two-thirds of his time focused on "high-visibility" situations. A difficult position, granted, for an executive that shied from public speaking as a West Virginia youth. "I originally did not ever think it was a requirement for the job," he said.

Cisco and Chambers realized times were changing about two and half years ago when the company was invited to speak at a CEO retreat in Napa Valley, California. "Why would they want someone to talk plumbing at dinner?" Chambers wondered.

It turns out he spoke to the group for an hour and a half, longer than Chambers originally expected. That planted the seed that has flowered into a coordinated marketing campaign, highlighted by television ads that ask the question, "Are you ready?" and a number of public appearances and visits with foreign dignitaries.

"One of the least expensive ways is to use your CEO as an elevated spokesman," said John Morgridge, chairman of Cisco and the former chief executive who brought in Chambers. "For as much success as we've had, we were kind of a quiet company.

"Fortunately or unfortunately, I think it's indicative of business in general and the [Silicon] Valley in particular," Morgridge said.

In this manner, Chambers and his predecessor are very much alike: Neither wants to take too much credit for their roles. In this vein, Chambers has been successful in continuing a culture that was developed by Morgridge. "I don't like the president getting too much attention," Chambers said. "You win and lose as a team."

Star status
Before his speech in Los Angeles, Chambers is notified that a story has hit the wires concerning the departure of one of his key executives. He wants updates on the Wall Street reaction, he says, then quickly returns to his final preparations.

Chambers takes the stage to a filled hall and gives a familiar treatise on how the health of the global economy will increasingly be determined by how quickly countries invest in Internet and networking technologies. It is a self-serving mantra Chambers has come up with, to be sure, but it is a message that resonates with the crowd.

The executive surprises the camera crew, as well as the audience, by wandering through the aisles as he delivers his Net-friendly message.

At the close of Chambers' speech, a small crowd gathers. Normally one would think the small mob would consist of the ever-present media, poised to ask about the latest moves by one of the most closely watched companies in technology.

But on this day, most of the people are conference attendees, desperate to discuss the potential for networking as an educational tool and the possibilities for Internet growth, among other topics. Chambers politely answers the inquiries and hands out business cards, stopping to pose for a picture.

Then a woman approaches him with a piece of paper. "Thank you for securing my future," she says as she shoves a stock certificate toward Chambers. The executive signs the document and moves on, noting later that it was the first time he has been asked to sign such a piece of paper.

Just another day for Chambers, an executive who may be the first, if not reluctant, star of networking.