ChannelTrends: John Chambers and Cisco, a Lesson in Executive Succession

The departure of Cisco CEO John Chambers, as well as the recent high-profile changes in other channel vendor organizations, illustrates the value of management transition strategies.

To no one’s surprise, one of the IT industry’s most visible and longest serving CEOs announced earlier this week that he will be stepping down in late July. While Cisco’s John Chambers will stay on as Executive Chairman and Chairman of the Board, the company’s former channel chief Chuck Robbins will be promoted to fill the CEO vacancy.

The networking vendor’s leadership succession has been in the making, and a key topic of industry interest, for years. With almost 20 years at the helm and having just reached the industry-standard mandatory retirement age of 65 last summer, few were surprised to hear Chambers would be leaving soon. But, as with any Fortune 500 company (Cisco is currently ranked No. 55), the transition had Wall Street, investment experts and the business community at large abuzz.

Of course, those conversations have been very active in the IT channel community this week. Many solutions providers, vendors and distributors have significant partnership and alliance investments with Cisco. While IBM, Microsoft, HP and other vendors have similar relationships, Chambers’ long tenure created a rather unique situation. It was hard to think of Cisco without immediately seeing its CEO’s image.    

The Transition Strategy

In the share price-driven business environment where many of the large vendors sit, change can be disconcerting — especially when the affected organization appears to be doing quite well. No one want’s to rock the boat when seas are calm and the course seems true.

In Chambers’ case, he presided over one of the great runs in the IT industry. When he assumed the CEO role in 1997, Cisco was No. 332 on the Fortune 500 list with annual sales of approximately $1.2 billion. With 2015 annual revenue projected to reach $49 billion, a smooth transition is surely a concern for stockholders, as well as the organization’s 70,000+ worldwide employees.   

No one disputes that Robbins has big shoes to fill. Industry observers and analysts said the same thing about Ginni Rometty when she took over Samuel Palmisano’s role at IBM, and when Oracle announced that Mark Hurd and Safra Catz would become Co-CEOs upon Larry Ellison’s departure last fall. Each successor inherits her (or his) own challenges, whether revenue is at an all-time high or the company is near insolvency. Every organization’s situation is unique and the thought process behind filling key management roles can be formidable.

Succession Planning Isn’t Just for the Fortune 500

Chambers’ departure, as well as the recent high-profile changes in other channel vendor organizations, illustrates the value of management transition strategies. Whether your company has 10,000 employees or less than 10, do you have a succession plan in place? If you were to get hit by that proverbial bus or simply have to take an extended period of time off, is there someone ready, willing and able to take on your responsibilities? 

Just as every business needs a disaster recovery plan, it should also have a management continuity strategy. If you were no longer able to handle day-to-day operations, do you have a backup manager or management team in place to ensure your clients are taken care of, the bills get paid and your employees still have a job?

The keys to the kingdom for small businesses include simple steps such as extending admin rights to certain accounts and systems, and developing organization charts and job descriptions to confirm roles and responsibilities. Do you have someone who can make key decisions in your absence? Perhaps a trusted family member, business manager or your accountant? Just be sure to review your options with an experienced business attorney to ensure your company and its stakeholders are properly protected.

The other succession plan is more positive. Even if you enjoy what you do each day, chances are you hope to retire or at least minimize your responsibilities when you reach a certain age or mindset. Who will take over? Whether the intention is to sell the business or hand off the reigns to someone else, those intentions need to be addressed in your company’s strategic plan.     

The good news: CompTIA offers a variety of resources to help IT entrepreneurs and executive teams develop strategic plans and address a multitude of business-transformation concerns. Regardless of how you do it, be sure your team has the processes and decision makers in place to ensure everything goes well in your absence — no matter how long that may be.  

Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian atBsherman@techsuccesscommunications.com.

Email us at blogeditor@comptia.org for inquiries related to contributed articles, link building and other web content needs.

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