Cisco’s apparently going to try to simplify its sales, services and engineering organizations in the next 120 daysBy Maureen O'Gara
Faced with a nasty loss of credibility, a string of poor financial results, shrinking market share in its core business, an unwieldy and alienating bureaucracy blamed for the top executive exodus it been experiencing, and a stock price that's plunged into the toilet Cisco, once an economic bellwether, is promising to do more than simply kill off its once-popular Flip video camcorder business and lay 550 people off, an admission that its foray into the consumer segment had largely failed.
It said in a press release issued Thursday morning that it's going to a "streamlined operating model" focused on five areas, not apparently the literally 30 different directions it's been going in although it did say, come to think of it, something about "greater focus" so maybe it's not really cutting back.
These focus areas are, it said, "routing, switching, and services; collaboration; data center virtualization and cloud; video; and architectures for business transformation."
Nobody seems to know what that last one is and the Wall Street Journal criticized Cisco for not being able to explain in plain English what it's doing and Barron's complained that it needed a Kremlinologist to decrypt the jargon in the press release.
Anyway Cisco's apparently going to try to simplify its sales, services and engineering organizations in the next 120 days or by July 31 when its next fiscal year begins. Well, maybe not everything, it warned, but sales ought to be reorganized by then.
This streamlining seems to mean that:
- Field operations will be organized into three geographic regions for faster decision making and greater accountability: the Americas, EMEA and Asia Pacific, Japan and Greater China still under sales chief Robert Lloyd;
- Services will follow key customer segments and delivery models still under its multi-tasking COO Gary Moore;
- Engineering, still reporting to Moore, will now be led by two-in-a-box Pankaj Patel and Padmasree Warrior and aside from the company's five focus areas there will be a dedicated Emerging Business Group under Marthin De Beer focused on "select early-phase businesses" "with continued focus on integrating the Medianet architecture for video across the company."
- Lastly, it's going to "refine" - but apparently not dismantle its hydra-headed, decision-inhibiting Council structure blamed for frustrating and running off key talent - down to three "that reinforce consistent and globally aligned customer focus and speed to market across major areas of the business: Enterprise, Service Provider and Emerging Countries. These councils will serve to further strengthen the connection between strategy and execution across functional groups. Resource allocation and profitability targets will move to the sales and engineering leadership teams which will have accountability and direct responsibility for business results."
It's unclear whether any of this means layoffs.
Cisco piped in a quote credited to Moore saying. "Cisco is focused on making a series of changes throughout the next quarter and as we enter the new fiscal year that will make it easier to work for and with Cisco, as we focus our portfolio, simplify operations and manage expenses. Our five company priorities are for a reason - they are the five drivers of the future of the network, and they define what our customers know Cisco is uniquely able to provide for their business success. The new operating model will enable Cisco to execute on the significant market opportunities of the network and empower our sales, service and engineering organizations."