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John Chambers, virtual-world master

November 19, 2007 | Chris Payatagool

9_Chambers_John.jpgJohn Chambers has seen boom, bust and boom again, as he remodels Cisco to take pole position in the digital age. And its new TelePresence device is an absolute wow

THE screens glow into colour and there opposite me, large as life, is John Chambers, chief executive of Cisco, one of America’s biggest technology companies. He sits at a table, the continuation of mine, as if we are sitting at one vast, round desk that starts in my room and finishes in his. He gives me a very welcoming smile.

“This, Andrew, is a glimpse of the future,��? he drawls. “You’ll have this capability not in 10 years, but in three to five years at home. I already have it in mine.��?

It’s 5pm in London for me and 9am in California for Chambers, where he has taken 90 minutes out of his day to meet me in “TelePresence��? – Cisco’s new networking device which, the company hopes, will revolution-ise communication, cutting a chunk out of business travel, as we move to a virtual-reality world.

It is extraordinary stuff, light years ahead of conventional video conferencing. I am in Cisco’s TelePresence room in the City of London. Three, 60-inch screens cover the wall six feet away, showing a mirror image of the room I am in, at Cisco’s base in San Jose, California, where Chambers sits.

He is life-size, pin-sharp, short and sandy-haired, responding with no delay and fuzz-free clarity. When someone walks through right to left and hands him something, the sound trails across. It’s like watching a very personal performance. I can lean over and almost flick through his notes, which include a very nice picture of me.

“Great to see you have a photo for your column that doesn’t make you look 10 years younger than you are,��? jokes Chambers, giving me a wink.

Born in West Virginia, part of America’s mining belt, Chambers has a folksy, preacher-man style, passionate about the benefits that technology can bring, and how companies can lead sudden step-changes in innovation.

He says internet-based TelePresence was inspired by Star Trek. “I told our engineers: ‘Beam me up, Scotty!’,��? he laughs. Cisco has already developed a hologram version, demonstrated at a conference in India last month.

TelePresence can even mix in groups from different places in one session. You really could soon have all your relatives, from anywhere in the world, sitting round your table at Christmas.

That’s part of the reason why Cisco, with revenues of $35 billion (£17 billion), is on a roll right now. It has been there before. Founded in 1984, floated in 1990, Cisco boomed pre2000, selling routers and switches, then crashed in the stock-market collapse of 2001. This time it is growing with a broader array of innovative networking devices for business and home users, linking voice, video and data in the digital world’s next big leap.

That includes TelePresence – its fastest-growing, internally developed new business ever. Prices start at £40,000 for one screen, £150,000 for a three-screen room. Cisco has already installed 150 TelePresence rooms across key markets, and sold it into giants like SAP, BT and NTT. It is also cutting deals with Regus to put them into rental offices in cities worldwide.

Rivals like HP have competing systems and the battle for sales is fierce, but Chambers claims Cisco’s version is the simplest and most effective. The equipment will save his company $150m in travel costs this year. “And our emissions are 10% lower per employee��?.

Multinationals, he says, want savings like that to burnish their green credentials. By the time a home version comes – at a much lower price – Cisco hopes to be a widely known consumer brand.

It’s already one of the bellwethers of US business: when it hesitates, the whole country catches its breath. That happened a fortnight ago when Chambers, announcing another set of record quarterly results with rapid growth in emerging economies, added that tech spending by large American companies had declined.

Not just Cisco but the whole stock market fell – leaving Chambers looking rueful. “We got caught in a riptide,��? he says. “We thought our stock was going to go up, we were feeling pretty good. But there was a rapid change going on.��?

As for whether America is going into recession, don’t believe it. “Very few business leaders expect a recession,��? he says. “A soft landing is more likely. But it’s how you handle the surprises that counts.��?

That has been central to Chambers’s career at three large tech multinationals, cutting his teeth at IBM, rising to senior management at Wang, and joining Cisco in the No 2 slot in 1991, becoming chief executive in 1995.

Now, at 58, he has seen boom, bust and boom again – making him one of the most durable chief executives of any major American company. Add in the fact that he is open about his severe dyslexia, arguing that his inability to read reams of printed data makes him see patterns others don’t, and you can understand why some suggest he has a better feel for markets than most bosses a generation younger.

Characteristically, he gives his dyslexia a folksy spin. “Once you understand it’s a curve ball coming towards you, and it’s the same curve ball every time, then you can hit it out the park,��? he says.

But you can’t run an aggressive multina-tional by homilies alone. Chambers is driven by numbers and Cisco has been relentless in its push to expand, competing ferociously for custom, and spurring executives on with evermore ambitious targets and rewards.

In recent years he has been championing a more “collaborative��? style internally, using a mesh of councils and boards, mirroring the internet’s growth of social networks within his own company and its 63,000 staff.

That, he admits, is partly defensive. “I don’t want it to be like a wheel where, if the hub is removed, it all collapses.��? But it is also done with an eye to innovation, and quicker, more collaborative decision-making.

“Over the next three to five years, the changes we’re going to make will be dramatic,��? he promises. “No-one’s doing collaboration and teamwork like we are.��?

How more collaboration leads to more decision-making – the opposite of what most would expect – will be worth watching. But Chambers is adamant, and so far his track record on strategy is good.

He sees Cisco becoming one of the world’s biggest companies as all communication switches to the internet. Colleagues cite long-term planning, along with energy and presentation skills, as his key strength.

“John is a visionary,��? says Rick Justice, Cisco’s senior vice-president for worldwide operations and an old Chambers ally. “So far things have unfolded exactly as he talked about them.��?

Others suggest hubris, combined with economic downturn and virulent competition, could yet trip up Cisco, but few doubt Chambers’s eye for opportunity.

Chambers himself puts that down to experience. Born the son of two doctors – “my dad was an obstetrician, my mum a psychia-trist, whatever went wrong, they could fix��? – he eschewed a career in medicine to follow business, and only joined IBM because a friend there asked him to attend an interview “to make him look good��?.

But what he learnt there has stuck. “First, technology is not about bits and bytes, it’s about how you change the business process and people’s lives. Second, when you get a major market transition wrong, you’re in major trouble. IBM never moved effectively from mainframes and minicomputers to PCs. It took decades to recover.��?

Hence his determination that Cisco should lead Web 2.0 – the term given to the second generation of internet-based communities and links that encourage collaboration between users.

“No matter how strong you are, if you don’t get ahead of a market transition, you get left behind,��? says Chambers. “Very few tech companies go beyond their initial leadership team.��?

That drive for expansion is not without controversy. Cisco’s readiness to sell technology to China has already drawn criticism. Yahoo’s chief executive, Jerry Yang, was recently dubbed a “moral pygmy��? by Congress in America after his company turned over information which led to the arrest of a dissident journalist in China.

Isn’t Cisco, whose technology can be used to keep surveillance over the internet, also guilty of putting profit first?

Chambers takes a moral stance on many issues – he pays for his own corporate jet and gives a proportion of his salary to charity – and you sense he is uncomfortable here.

“The way we approach China is no different to the way we approach the UK, the US, India or any other market. We do not enable any countries with unique capabilities, nor do we design products for them or give them material that we don’t give everyone.��?

But Cisco is still helping to prop up a totali-tarian regime. Actually, Chambers replies coolly, the long-term effect of the internet will help to democratise China. It inevitably encourages more people to exchange ideas and participate in government.

So does he envisage democracy in China in 20 years? “If the internet allows more people to participate in future, yes I do.��?

By then Chambers, tech’s great survivor, will be long gone – he has promised his board “three to five more years��? to see through changes, then he’ll step aside.

Can you successfully head a tech company for 17 years? “Larry Ellison at Oracle has served longer than me,��? he shrugs. But prophetically, that door stage right is twitching, as staff tell him he needs to get going.

You can’t shake hands in TelePresence, so we wave at each other, and he scoots off, leaving an empty chair. Will TelePresence take over? I don’t know, but if I ran an airline that was dependent on business travel, I’d start to get worried now.

JOHN CHAMBERS’S WORKING DAY

THE Cisco chief executive wakes at his home in Los Altos, California, at 6am. John Chambers drives to Cisco’s base in San Jose after 7am. “We don’t have parking spots, but you can tell who’s in first from where they park,��? laughs Chambers.

He will spend the day in meetings, many using TelePresence. “I have 16 direct reports, and manage two or three levels below that. This is where collaborative teamwork is more complex than hierarchy.��?

He also meets customers and shareholders. Despite TelePresence, he still travels too much. “I need more customer contact, but less travel.��?

VITAL STATISTICS

Born: August 23,1949

Marital status: married, with two children

School: Charleston High, West Virginia

Universities: Duke, West Virginia and Indiana

First job: sales rep at IBM

Salary package: $375,000 plus $3.5m bonus

Homes: Los Altos, Carmel and Hawaii

Car: blue Lexus

Favourite book: The World is Flat, by Thomas Friedman

Favourite music: 1970s pop

Favourite film: Gone With The Wind

Favourite gadget: Motorola PDA

Last holiday: Carmel

DOWNTIME

JOHN CHAMBERS loves all team sports, but has also recently taken up golf. He plays off a handicap of 15, but says: “If you saw my golf game, you’d buy my stock��?. He watches basketball and football with his family, and runs to stay in shape.

Chambers is building a holiday home in Hawaii, but says he also gives away as much as he spends. “My wife and I both come from relatively humble backgrounds, and I think it’s important to give back. Money is not my prime motivator. I love my family and I love my business, and what higher mission can you have than to change the world for the better?��?

[via Times Online]







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