jodi krause - organization design...

Jodi Krause

© 2009 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID

For Thousands of Years


mass distribution

and

long distances

Building a network of human connections...

The Evolution of Organization Structure

Wave 2

Centralized“Command & Control”

CEO

Div SVP

VP VP

Div SVP

VP

Corporate Hierarchy

Wave 3

DynamicNetworked

Organization

Decentralized“Collaboration”

Wave 1

Independent“Disconnected”

Small Businesses

Adapted from Thomas Malone, “The Future of Work”

Cisco’s Transformation

Culture of Competition

Culture of Collaboration

01 02 03 04 05 06FY00 07 08 09 10

Lines Of

Business

CEO

EnterpriseSP Commercial Small

DynamicNetworked

Organization

Components of the Model

Keys to Successful Implementation

Cisco’s Journey to a Dynamic Networked Organization

Discussion Topics

• Social networking andinternet technology

• Globalization

• Economic uncertainty

• Quickly changing markets

• Mergers, partners &joint ventures

• Gen Y (Millenials)

Why Collaboration?

© 2009 Cisco Systems, Inc. All rights reserved. Cisco Confidential 10

Source: Cisco Workplace Resources Work Profile Survey, 2008

63% of time is spent communicating and collaborating

Collaborative work is more often virtual (35%) thanface-to-face (28%)

Why Collaboration?

56% of work is done away from their office desk

24% of work is done from home

40% are not located in the same city as their manager

85% telecommute part of the time

Technology Enables Mobile, Collaborative Work “Styles”

How Employees Work Is Changing

“A great wind is blowing that gives you

either imagination or a headache.”

– Catherine the Great

Operational Excellence

Innovation

Productivity Redefined

Agility of a Small Organization

Economic Benefits of a Large Enterprise

The Power of the “And”


Where Cisco’s

BeganJourney

$1 OPEX =

Revenue

Net Income

1997-2001

$2.06

$.18


Crisis is the

Mother of Invention

Creating Structural Agility

Fin

an

ce

Mark

etin

g

Serv

ices

Engin

eerin

g

Sale

s

Com

munic

atio

ns

Op

era

tion

s



Evolution of Cisco’s Dynamic Networked

Organization: The Big Picture

2001–2005Command / Control

2006-2008Councils

2009+Councils/Boards/

Working Groups

4 Councils 6 Councils

4 Boards

10-50 people 500-1500+ people50-100 people

9 Councils

48 Boards

~100 Working Groups

Why Collaboration?

Productivity Gains$1 OPEX =

1997-2001 2002-2010

$2.06 $2.42

$.18 $.46

2Categories

9Categories

Revenue

Net Income

Market ShareLeadership

Discussion Topics


Cisco’s Journey to Collaborative Management


Critical Elements of a Collaborative

Organization Design

Shared Goals

TeamStructure

EXECUTIONCisco’s Evolving Value Proposition to Customers

STRATEGY

VSEM Communication Template

How CiscoSustains Differentiation

Top 3-5 initiatives in support of Your Strategic Priorities

5+ Years

2-4 Years

12-18 Months

How you aremeasuring success

12-18 Months

METRICS

VISION

Cisco Confidential© 2010 Cisco and/or its affiliates. All rights reserved.


V Cisco’s Value Proposition to Customers 5+ years

SHow Your Council, Board, Function or Work Group Sustains Differentiation

Strategic Priority X(e.g., grow or improve

competitive advantage)

Strategic Priority Y(e.g., grow or improve

productivity)

Strategic Priority Z(e.g., drive growth)

2-4 years

2-4 years 2-4 years 2-4 years

List of critical initiatives, programs or actions in support of Strategic Priority X (above).

List of critical initiatives, programs or actions in support of Strategic Priority Y (above).

List of critical initiatives, programs or actions in support of Strategic Priority Z (above)

12-18 months 12-18 months 12-18 monthsE

Define the quantitative metrics

used to measure execution

progress and accountability,

and what success looks like.

Example Metrics:

• Y:Y Share of Wallet

• Y:Y Contribution Margin





Example Metrics:

• Y:Y Expense-to-Bookings

Ratio

• Y:Y Results per Employee





Example Metrics:

• Y:Y Growth

• Y:Y Market Share

• Y:Y Customer Satisfaction

12-18 months 12-18 months 12-18 months

M

Transparent Decision-Making Drives Alignment Prioritization


V

S

E

Cisco’s Value Proposition to Customers 5+ years

How Your Council, Board, Function or Work Group Sustains Differentiation

Strategic Priority X(e.g., grow or improve

competitive advantage)

Strategic Priority Y(e.g., grow or improve

productivity)

Strategic Priority Z(e.g., drive growth)

2-4 years

2-4 years 2-4 years 2-4 years

List of critical initiatives, programs or actions in support of Strategic Priority X (above).

List of critical initiatives, programs or actions in support of Strategic Priority Y (above).

List of critical initiatives, programs or actions in support of Strategic Priority Z (above)






Example Metrics:

• Y:Y Share of Wallet

• Y:Y Contribution Margin





Example Metrics:

• Y:Y Expense-to-Bookings

Ratio

• Y:Y Results per Employee





Example Metrics:

• Y:Y Growth

• Y:Y Market Share

• Y:Y Customer Satisfaction


M

De

gre

e o

f C

olla

bo

ratio

n

High

Low

Are We on the Same Page?

AGREEMENT

Who is Responsible for Success?

ACCOUNTABILITY

Are Our Resources Creating

Sustainable Differentiation?

ALIGNMENT

Transparent Decision-Making Drives Alignment Prioritization

Emerging Solutions Council

Connected Architecture Council

Connected Business Operations Council

Emerging Countries Council

Fin

OPS

CMO

Service

CDO

Sales

Operating Committee

5 SegmentCouncils

Ent Small ConsComm SP

Organizational Structure:

Cisco Councils

4 Cross-SegmentCouncils

CustomerRelevance

Operational Excellence

Innovation

Cross-Functional collaboration delivering Cisco’s technologies and

services to Small Businesses

Small Business Council

Members and Mission

*Council Lead

Business DevelopmentManufacturingChannels Europe Sales

Engineering ServicesWebEx


Role Hold budgets

Execute Company Strategy

Business Goals Contribution

MarginAccountability/

Metrics

Productivity Expense /

Bookings

Accountabilty/

Metrics

9 Corporate Councils

Leader Commitment: 30% of Their Time

7 Corporate Functions

Leader Commitment: 70% of Their Time

Role Set Strategy

Establish Strategic Priorities

(shared goals)

Expectations of Leaders

Participation: Increased Breadth & Depth

110 Working Groups(1232 People)

Operating Committee(15 People)

9 Councils(117 People)

49 Boards(557 People)

Discussion Topics


Cisco’s Journey to Collaborative Management


Critical Elements for a Dynamic

Networked Organization

Process

Technology

Culture

SustainableAdvantage

Portfolio of Collaboration Technology

Enterprise

Social

Software

Mobile

ApplicationsIP Voice &

VideoMessagingConferencingTelepresence

Cisco’s Journey

4 Levers of Cultural Change

DecisionMaking

LeadershipPassive-Aggressive

Constructive/Authentic

AccountabilitySiloed Shared

Culture of Competition

Culture of Collaboration

From… …To

ResourcesVertical Alignment

PortfolioManagement

Opaque Transparent

Disciplined Collaboration

W E E E E E E E E E E…


Speed, S

cale

, F

lexib

ility

and R

eplic

ation

Evolution of a Dynamic Networked

Organization: Where are We Now?

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Phase One:We Built a Culture of Collaboration

OrganizationalStructure

Shared Goals

V ES

Phase Two:Drive Alignment and

Accountability

Build Repeatable Process

Organization Role Accountability

Cisco VSE

Segment

Councils Segment VSE

Functions Function VSE Productivity and Performance

Holds Councils and Functions Accountable

Segment Performance (Growth, CSAT, Share, Contribution Margin)

+ Market Adjacency Performance (CPAD)

X-Segment

Councils

X-Segment

VSE

(Innovation/

Op Excellence)

Incubation Performance + Operational Excellence across segments + Market

Adjacency Performance (CPAD)

Operating

Committee

Accountability Guiding Principles

Council or Board Leader Role• 51% of the vote

Council or Board Member Role• Makes commitments on behalf of their

function – does not have to ask for “permission”

Clearly Defined Roles

Which Councils or Boards are more effective, and why?

How do we measure effectiveness?

What are the best practices in Councils & Boards?

How do we improve the effectiveness of the model?

Council & Board Effectiveness Study

Council & Board Effectiveness

Framework

31% 31%

16%

8%12%

1%

0%

20%

40%

60%

80%

100%

Sit on 1 Council

or Board

Sit on 2 Councils

orBoards

Sit on 3 Councils

orBoards

Sit on 4 Councils

orBoards

Sit on 5or moreCouncils

orBoards

Don’t know

Council and Board Membership(From Board Survey only)

*Top 2 Box Reported (Those that are somewhat or much more effective)

Base size: Total Base = 148

Number of Council and Board

Memberships

Perc

ent

Average number of

Council or Board

Memberships = 3

Research Notes:

88%81%

0%

20%

40%

60%

80%

100%

Perc

ent

Impact of Council and Board

Membership*

Somewhat/ Much

more effective at your

functional role

Somewhat/ Much

more effective at your

role on a Board

88%

20%

68%

11%1%

Don’t know

I’m on the right

number

I’m on too many

Perspective on Council and Board

Membership

I’m on too few

68%

Statement Boards Councils

The personal investment I make in this Board/ Council’s activities is

rewarding94% 91%

Increased strategic alignment between Board/ Council priorities and the

business functions86% 89%

Increased Cisco's ability to differentiate itself in meeting the needs of our

customers/ partners83% 84%

Improved the quality of the decisions that are made within the Board/

Council83% 82%

Overall, this Board/ Council has been effective in achieving its VSE 80% 80%

Created new sources of growth for Cisco which will be realized in the next

12 to 18 months80% 71%

Increased the speed with which decisions are made within the Board/

Council72% 67%

Celebrated the achievement of important milestones related to the Board/

Council’s progress70% 58%

Effectively identified when to phase out a (Board or) Working Group 46% 49%

Acquired the necessary resources (headcount or budget) to support the

Board/ Council’s priorities43% 44%

Collaboration Effectiveness Index


Improvement Focus for FY11 and Beyond

Data & Metrics

Goal & Reward Alignment

Portfolio & Investment Management

Meeting Effectiveness & Decision-Making

UESTIONS

1. How to Get Started on this Journey

2. Leadership Expectations

3. Developing Next-Generation Leaders

4. The Lifecycle of a Team

5. Conducting Effective Meetings

6. Creating Goal & Reward Alignment

7. Measuring Success

8. Creating Community Through Technology

Menu of Collaborative Management

Practices

End

Case Study:

How to Get Started on this Journey


Developing a Dynamic Networked

Organization

Are you ready for it?

How does the journey

begin?

Transformation case

studies


Are you ready for it?Developing a Collaborative Management Model

Is there an influential executive sponsor who’s bought

into the concept?

Is there a need for the organization to come together

differently in order to be successful in the future?

Are there some key leaders who already exhibit

collaborative behaviors and can become role models?

Does the organization hold people accountable for

shared goals?

Is there basic collaboration technology available (e.g.

voicemail, email, conferencing, and shared document

spaces)?

Process

Technology

Culture

Scope of impact

Experiment

Org

an

izati

on

al valu

e f

rom

DN

O

Transform

Chasm

Workgroup

Ecosystem

Individual

Another Chasm

Evolution to a Dynamic Networked

Organization

Scale

Return

Case Study:

Leadership Expectations

C-LEAD at a Glance

C Collaborate

• Working Across Boundaries

• Engaging Others

• Earning Trust

L Learn• Developing Self

• Developing Others

E Execute

• Demonstrating Passion

• Empowering Teams

• Achieving Results

A Accelerate• Shaping Strategy

• Building Capability

D Disrupt• Promoting Innovation

• Leading Change


C-LEAD Leadership Transformation

Reward

Educate

Measure

Enable

Managers’ Meeting, Senior

Leader Calls to Action, Website

Self-Assessment,

Development Resource

Guide, 360 Feedback Tool

Integration into

Performance

Management

Alignment

with

Rewards

Return

Case Study:

Developing Next-Generation Leaders

Developing Leadership and Innovation

Simultaneously

• Hogan assessment

• Individual coaching sessions

• Leadership platform videos starring you(?)

Baseline assessment debrief with coach?

Transformational platform

• Skip level development meeting

• Robust development plan update

“There's almost nothing a leader cannot

accomplish if they do not care who gets

the credit.”- John Chambers, Cisco Chairman & CEO

Cisco Executive Action Learning Forum Activities

Leadership Innovation

Enterprise-level mind set

Disruptive innovation

framework

Robust development

(Assess, plan, discuss)

Collaborative decision

making with peers

Executive coaches

$1B+ business opportunities

Residential Workshop

Business partnership

Top executive stakeholders

Enterprise transformation

Return

Case Study:

The Lifecycle of a Team

Return

Work: Reach agreement on vision, leadership, membership, shared goals, roles and responsibilities

Work: Translate shared goals into the organizationalengagement needed to execute on priorities

Work: Develop bold strategies and the organization’s capability to achieve both operational excellence and innovation

Work: Promote change and innovation to support Cisco strategy and set Cisco apart in the global marketplace

Work: Assess completion of goals against current strategy and choose to reconfigure or disband

Sign of Success: ClearPurpose

Sign of Success:Committed Resources

Sign of Success: EffectivePrioritization

Sign of Success: Positive Disruption

Sign of Success: Healthy Evolution

Sign of Distress: Disengagement

Sign of

Distress:

Stagnation

Distress:

Overwhelm

Sign of

Distress:

Critical Failure

Sign of

Distress:

Irrelevance

Start Up Align Accelerate TransformReinvent or

Retire

Council & Board Lifecycle Model

Case Study:

Conducting Effective Meetings

Optimize Executive Meetings

Inform Engage Exchange

• Update

• Address issues

• Educate

• Discussion

• Build consensus

• Make a decision

• Share expertise

• Brainstorm / debate

• Reach agreement

30 minutes 1 hour 1-2 hours

Goals

Timing

Interaction75% Presentation

25% Discussion

50% Presentation

50% Discussion

25% Presentation

75% Discussion

What format is best

for the following types of meetings?

Make Strategic Decisions

PlanChallenge Thinking

Course Correct

Educate InspireMeasure Progress

Inform25%

Discussion

Engage50%

Discussion

Exchange75%

Discussion

Speaker Expectations

Discussion Type Type of discussion (Exchange, Engage, Inform)

% time presenting and % time discussing

Allocated Time # Minutes or Hours total

Recommended # of slides

Speakers Speaker Name

Key Discussion Points Include the Following Slides

Project Overview

Update from prior meeting

Project details

What decisions do we need to make?

Risks/Challenges

Purpose and Desired Outcomes

Project Overview/Update

Details related to xxx

Presentation Deadlines

When due

Where to send Return

Case Study:

Creating Goal & Reward Alignment

People Drive Accountability

A Council or

Board strategic

priority or

execution

activity must

have at least

one EVP/SVP/VP

accountable to it

VSEM Publishing Process

Priorities Centralized in Performance Management Tool

Transparent Goal Alignment

Return

Case Study:

Measuring Success

SPEED SCALE

FLEXIBILITY REPLICATION



VisionAgreement

ExecutionAccountability

StrategyAlignment

Speed

Oct08

Nov09

Internet Routersin Space

Oct08

Launch of firstsatellite router

Data, Voice, Videobetween satellites

Smart GridSept08

Jan09

Apr09

Florida Power &Light/GE

End-to-End Grid Comm & Control System

Apr09

Feb 09

Smart + Connected Communities

Aug08

Gale International/SongdoIBD

Blueprint Announced

Sports &Entertainment

Sept07

July08

StadiumVisionWins:Yankees/Cowboys

IP-enabled SportsBusiness Model

Nov09

Speed of Innovation:

~ One Year from

Vision to Execution

Switching 70%

Scale

WebConferencing

50%

Voice 30%

Security 35%

Storage: Area Networks

24%Wireless:LAN

61%

43%NetworkedHomeRouting 58%

Digital Video:IPTV 65%


Faster, Better, “Stickier” Decisions

Passive Aggressiveness

Flexibility

November 2008 - January 2009

$500 Million Re-Aligned

90 Days

February 2008 - August 2008

$500 Million Re-Aligned

180 Days

Fiscal Year 2009

$1.5 Billion Cut from

Cisco’s Run Rate

180 Days

ReplicationExpansion into New Markets

FY07 2 Adjacencies

FY10 30 Adjacencies 15X

Increased Breadth and Depth of Participation

FY07 100 Executives

FY101300 Executives13X

FY07 60 Days

FY10 55 Days1X

No Increase in Sr. Executive Time


VSEMAlignment &

Accountability

Council LeaderMBOs

Metrics

VSEM:“4-Page” Dashboard

Case Study:

Creating Community Through Technology


Virtual Community Spaces:Council & Board Connection

Return

UESTIONS

“While hierarchies are not vanishing, profound

changes in the nature of technology, demographics,

and the global economy are giving rise to powerful

new models of production based on community,

collaboration, and self-organization rather than on

hierarchy and control.”

– Opening to Wikinomics by Tapscott & Williams, 2008

Thank you!

jodi krause - organization design...

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