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Why Cisco CEO Robbins Gets an 'A' Report Card After Five Years

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If one had to assign a letter grade to Robbins first five years, an A would certainly be in order. The stock has reached a high not seen since the dot-com-crazy late ‘90s, product gross margins are now in the mid 60% range, and the network business has seen a rebirth. How did he do this? There were five key accomplishments that lead to Cisco’s success in the Robbins era.
The date July 26, 2015 was a notable day in history for a number of reasons. President Barack Obama became the first sitting U. S. president to visit the East African country of Ethiopia. In the world of sports, Aussie Jason Day won the RBC Canadian Open, disappointing all of Canada as he beat Canadian David Hearn by two shots. In the IT business world, July 26, 2015 was the date Chuck Robbins became CEO of Cisco Systems, ending the 20-year tenure of John Chambers, who had one of the best CEO runs in history. Succeeding Chambers certainly was certainly not an easy task. “JC Superstar,” as he was known in some circles, had reached pseudo-celebrity status and was incredibly popular inside and outside of Cisco. The company had a number of people who were dubbed the heir apparent, but Robbins beat them all out and stepped into one of the most visible roles in the business world. When Robbins took over, the company was in need of its second act. The company wasn’t exactly struggling, because it was a near-$50 billion company with a ~60% gross margin. But it was seeing some significant challenges, including commoditization of the network, cannibalization by the cloud and a number of new start-ups that came to market as software-defined networking moved from a promise to reality. The company was certainly healthy, but its future was certainly in doubt. Evidence of this is that its stock price had hovered in the low-to-mid $20s for a couple of years. CSCO was selling at $47.67 on Aug.4. If one had to assign a letter grade to Robbins first five years, an A would certainly be in order. The stock has reached a high not seen since the dot-com-crazy late ‘90s, product gross margins are now in the mid 60% range, and the network business has seen a rebirth. How did he do this? There were five key accomplishments that lead to Cisco’s success in the Robbins era. 1. Culture change. Cisco has always had a strong culture of trying to make the world a better place, but Robbins has taken the company’s corporate social responsibility to an entirely different level. Historically, Cisco has been very active in trying to level the global playing field by bringing internet connectivity to third-world countries and through programs such as Networking Academy. During the past half-decade, Cisco has raised its visibility as a corporate citizen by getting involved or leading programs such as Global Citizen and Destination: Home. In 2016, Cisco set a goal of positively impacting 1 billion people by 2025, and hitting that lofty goal requires every employee to embrace this mission. In 2020, Cisco changed its purpose to be more reflective of its desire to make a significant societal impact. Until 2020, Cisco said its purpose had been to use the network to change the way we “work, live, learn and play” and the internet has certainly done that. During his opening keynote and virtual Cisco Live–the company’s annual end user and customer event–Robbins reaffirmed Cisco’s commitment with the new purpose statement of “To Power an Incluse Future for All.” The desire to change the world has created a focus for every employee. It’s not just corporate fluff, it’s real and that starts with the person on top–and that’s Robbins.

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