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I love a good committee as much as the next guy. But Cisco currently boasts nearly 60 internal committees to help steer its strategy, according to a Wall Street Journal article on the tech giant’s new management structure. Mull that over.

And while you could call such groupthink a more democratic way of doing things, the danger is that it will only serve to create a bureaucracy. And as Albert Einstein said, “Bureaucracy is the death of all sound work.”

The sheer number of committees may not be the scariest part, but rather the demand they put on executives. The Journal points out that it’s not unusual for top Cisco executives to serve on 10 or more committees and spend 30% of their time dealing with issues raised there.

On top of that, Cisco plans to expand the number of people involved in those meetings from 750 senior employees to 3,000 as it adds businesses. I hope that’s enough for the super-acquisitive company: Cisco has acquired more than 130 companies since 2001.

Chambers argues that big companies slowdown because they don’t get out of their primary markets fast enough. That’s why Cisco has gone from targeting two markets in 2007 to 26 today with plans to eventually hit 50.

The Cisco Kid is no doubt a very smart guy and I’m not quite ready to wonder if he is too smart for his own good. But for now, while everyone adjusts, the company's new management structure has at times slowed its response to rivals' moves, the Journal reported, citing people familiar with the matter.

Now, it’s awfully early in the game, but it’s probably worth noting that Cisco’s revenue has declined year-over-year for the last three quarters, including an 18% decline in its fiscal fourth quarter reported yesterday. (So as not to look like I’m cherry-picking numbers, I’ll also note Chambers said orders increased sequentially in the quarter for the first time in a year.)

Of course, because it is so early, the revenue declines are a likely justification of the radical change in management structure. But it will remain an easily criticized one until it bears fruit, especially when Chambers says he is purposefully spreading those who report to him thin in order to get them to delegate better.

In the meantime, Cisco execs will have to re-jigger schedules and get used to more time in the office. Good thing the company produces top-of-the-line teleconferencing services.

 

Comments (1)

	1. 08-07-2009 14:38
	I was looking for more of an update on Cisco's unified computing strategy out of the results, but for now it doesn’t have much to report. For one thing, the company was a month late out of the gate with its so sales won’t start showing up on the books until next quarter. As a recap, Cisco has begun selling a set of unified computing products – a combination of computer servers, storage device and networking gear – putting it in direct competition with former partners like IBM, HP and Dell. Cisco Chief Executive John Chambers did make an interesting statement about how he sees competition shaping up. “There are times when you move into new markets, like the data center, and the incumbents view that as a challenge,” Chambers was quoted as saying. “IBM is a partner – we’ll see how tight the partnership develops . . . HP is clearly a competitor.” Registered

Mel Duvall

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