Getting Its ACT Together

From its inception in 1984 until the mid-1990s, Cisco Systems was strictly a router and switch vendor. Company founders Leonard Bosack and Sandy Lerner, members of Stanford University’s computer support staff, were two of the first people to sell commercially successful routers supporting multiple networks when the company went public in 1990.

But over time, industry demands pushed Cisco to move from making gear for data networks to providing equipment for voice communications and video systems. The company has since become focused on creating software to make networks better for communicating, collaborating and entertaining.

Ken Presti, a technology consultant and former journalist who has been covering Cisco since 1995, said the company’s tradition is not to stay stuck in the past but to use the past as the starting point for its future. This pertains to its business operations as well. When the company’s rapid growth in the 1990s was threatening to outstrip its sales capabilities, it created a reseller partner program, allowing independent sales partners, such as technology integrators, consultants and distributors, to aid the company’s sales and let the organization maintain its growth without being weighed down with a massive sales staff.

For years the company built a positive reputation around its evolving technologies, entrepreneurial spirit and growth, boosting its operating margin and cash flow year after year. But as the economy started to slow as a result of the global recession, Cisco’s business began to slide, and the company created an internal committee, Accelerated Cisco Transformation, or ACT, to address the opportunities the business had to drive out waste and maintain growth.

“ACT was a clearinghouse of ideas, opportunities and investments to really get us jump-started on how to not just behave as a growing company, but a growing company that delivers value by driving productivity,” said Don McLaughlin, vice president of employee experience at Cisco.

He said that while the global economy slowed the company’s overall growth, it intensified leaders’ focus on growth and productivity. It pushed them to improve the user experience of Cisco’s workforce to keep employees engaged and productive while reducing operating expenses.