© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential01 30 08 1 The Changing Face of Leadership at Cisco Randy Pond Executive Vice President

© 2008 Cisco Systems, Inc. All rights reserved. Cisco Confidential01 30 08 1

The Changing Faceof Leadership at Cisco

Randy PondExecutive Vice PresidentOperations, Processes, and Systems

January 30, 2008


Network Changes Way We Work / Live / Play / Learn Network Becomes the Platform… IIN All Forms Communication / IT into Network Enabling New…

Business ModelsProductivityEntertainment

Network Changes Way We Work / Live / Play / Learn Network Becomes the Platform… IIN All Forms Communication / IT into Network Enabling New…

Business ModelsProductivityEntertainment

Market Transitions… Customer Driven Innovation… Build / Buy / Partner Collaborate Technology and Business Architecture Cross Functional Teamwork / Prioritization

Market Transitions… Customer Driven Innovation… Build / Buy / Partner Collaborate Technology and Business Architecture Cross Functional Teamwork / Prioritization

#1 Product Leadership Lead Layers 1-7 Convergence… Leader in All Customer Segments Quad Play Everywhere… UC Leader in Collaboration / Web 2.0

#1 Product Leadership Lead Layers 1-7 Convergence… Leader in All Customer Segments Quad Play Everywhere… UC Leader in Collaboration / Web 2.0


Enterprise Line of BusinessEnterprise Line of Business

Service Provider Line of BusinessService Provider Line of Business

Commercial Line of BusinessCommercial Line of Business

Leadership Defined – Mini Silo-ed Cisco’s

Consumer Line of BusinessConsumer Line of Business

Dedicated Marketing, HR, IT, Engr, NPI, Finance Teams Cause Duplication

… But Allowed for Quick Movement and Enormous Scaling Power

Dedicated Marketing, HR, IT, Engr, NPI, Finance Teams Cause Duplication

… But Allowed for Quick Movement and Enormous Scaling Power


Business IssuesBusiness Issues ExamplesExamples

Duplication Across the Business

146+146+ Quality Council Product Quality Systems Steering Comm. BU-Specific Quality Councils Etc.

Quality Council Product Quality Systems Steering Comm. BU-Specific Quality Councils Etc.Product QualityProduct Quality

44+44+

CA Bus Ops Entitlement IOS Entitlement Product Evolution Program (PEP) Product IQ Etc.

CA Bus Ops Entitlement IOS Entitlement Product Evolution Program (PEP) Product IQ Etc.EntitlementEntitlement

10+10+ Channels Gray Market Project Brand Protection Remarketing Etc.

Channels Gray Market Project Brand Protection Remarketing Etc.Gray MarketGray Market

7+7+ Deals Desk Automation (DSA) Oracle 11i Advance Pricing BU Policy Update Etc.

Deals Desk Automation (DSA) Oracle 11i Advance Pricing BU Policy Update Etc.PricingPricing


Cisco’s Business Transformation History

Bust Buildout

Pre-Tax Profit (Pro Forma)Pre-Tax Profit (Pro Forma)

$K

FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080

2

4

6

8

10

0

100

200

300

400

500

600

700

800

Boom$B$B

RevenueRevenue


Today1980’s 1990’s 2000+

Production Transactions InteractionsWeb 2.0

Collaboration

Company

Web 2.0 Collaboration… The Next Market Transition

3%

5%

10%

15%

1%

Country

3%

5%

1%

PRODUCTIVITY

PRODUCTIVITY


Operating CommitteeOperating Committee

Functional LeadershipMarketing / Sales / CDO / OPS / CA / Finance

Functional LeadershipMarketing / Sales / CDO / OPS / CA / Finance

Shift to Functional Leadership Model

Cross Functional TeamsCross Functional Teams CQCCQC SPBCSPBC EBCEBC CBCCBCBPOCBPOC

Process forProcess(DMAIC,

RACI,SIPOC)

Corevs.

ContextProcessDefinition

(Levels1, 2, 3)

PortfolioManagement

MasterBlack Belts

andBlack Belts

Foundational Project

Management


Business Process Operations Council (BPOC)

Enforcing Decisions with Attention to Execution and AccountabilityEnforcing Decisions with Attention to Execution and Accountability

BPOC Is a Cross-Functional Operations Leadership Team Focused on Driving Enterprise-Wide Productivity through…

Making Key OperationalPolicy DecisionsMaking Key OperationalPolicy Decisions

Developing and Deploying Cisco’s Corporate Business Process FrameworkDeveloping and Deploying Cisco’s Corporate Business Process Framework

Aligning Similar Initiatives and Coordinating InvestmentsAligning Similar Initiatives and Coordinating Investments


John ChambersJohn Chambers

Randy Pond(Chair)

Randy Pond(Chair)

Cross-Functional Team of Executive Leadership

Business Process Operations Council (BPOC)Business Process Operations Council (BPOC)

Kim Marcelis

(OPS)

Kim Marcelis

(OPS)

Rebecca Jacoby

(IT)

Rebecca Jacoby

(IT)

Manny Rivelo (Sales)

Manny Rivelo (Sales)

Andy Starr

(Sales)

Andy Starr

(Sales)

Frank Calderoni (Finance)

Frank Calderoni (Finance)

Karl Muelema

(CA)

Karl Muelema

(CA)

Rob Redford (CMO)

Rob Redford (CMO)

Jim Miller(Mfg)

Jim Miller(Mfg)

Don McLaughlin

(HR)

Don McLaughlin

(HR)

Pete Rukavina

(Eng)

Pete Rukavina

(Eng)

Internet Capabilities Group Increase Cisco’s productivity Support BPOC operations

Internet Capabilities Group Increase Cisco’s productivity Support BPOC operations

Business Process Development Group Accelerate Cisco’s process transition

(frameworks, metrics, tools, training)

Business Process Development Group Accelerate Cisco’s process transition

(frameworks, metrics, tools, training)


Coordinate requirements with business segment councils

Focus on corporate operations strategy

Coordinate requirements with business segment councils

Focus on corporate operations strategy

Policy decisions

Executive mgmt attention to key issues

Policy decisions

Executive mgmt attention to key issues

Establishprocess infrastructure

QTC launchesas first level 1 process

Process improvement projects

Establishprocess infrastructure

QTC launchesas first level 1 process

Process improvement projects

Fund initial PMOs

Resource prioritization

Accountability

Fund initial PMOs

Resource prioritization

Accountability

Foundational Projects and Quick Wins

Foundational Projects and Quick Wins

Corporate InitiativesCorporate Initiatives

End to EndBusiness Processes

End to EndBusiness Processes

Strategic OperationsStrategic Operations

Evolution of the Business Process Operations Council (BPOC)

Aug 2002Aug 2002 2007+2007+20032003Dec 2002Dec 2002

PlanningPlanning

Identify and SponsorIdentify and Sponsor

Obtain agreement to address: Resource alignment Resolution of escalations Accountability for progress

Obtain agreement to address: Resource alignment Resolution of escalations Accountability for progress

Priority trade offs Roadmap

alignment and sequencing

Priority trade offs Roadmap

alignment and sequencing


Different Leadership CompetencyNeeded to Succeed in Chaos

“Continued Chaos” at Cisco

Growing Business Volume

Growing Business Volume

Increasing ComplexityIncreasing Complexity

Escalating RiskEscalating Risk


Segment Councils and BPOCSegment Councils and BPOC

BPOCand

Functions

BPOCand

Functions

Operating Committee

andSegment Councils

Operating Committee

andSegment Councils

New Role for BPOCTighter Alignment to Market Strategy

CompanyBusiness Plan

CompanyBusiness Plan

Market Segment Strategy

Market Segment Strategy

Business CapabilitiesBusiness

Capabilities

Enablement (Policy,Rules)

Enablement (Policy,Rules)

Governance Metrics Prioritization Decision making


SOX ComplianceSOX Compliance

Single Source of Truth (Financial, Employees, Products, Customer, Quality)Single Source of Truth (Financial, Employees, Products, Customer, Quality)

Commerce TransformationCommerce Transformation

Services / Software Entitlement / CA Unified FoundationServices / Software Entitlement / CA Unified Foundation

FunctionsFunctions

Simplify, Standardize, Globalize, Align to PrioritiesSimplify, Standardize, Globalize, Align to Priorities

Process Re-engineering Touches Every FunctionCross Functional Integration and Partnerships Key

ProcessProcess

Support the BusinessSupport the Business

Idea to OfferingIdea to Offering

Market to OrderMarket to Order

Quote to CashQuote to Cash

Forecast to DeliveryForecast to Delivery

Issue to ResolutionIssue to Resolution

OptimizationOptimization

HR

HR

Cus

tom

er S

ervi

ceC

usto

mer

Ser

vice

Eng

inee

ring

Eng

inee

ring

Mar

ketin

gM

arke

ting

Fin

ance

Fin

ance

Sal

esS

ales

Cus

tom

er A

dvoc

acy

Cus

tom

er A

dvoc

acy

Man

ufac

turin

gM

anuf

actu

ring


Building Cisco’s Business Architecture for Productive Interactions

Investing in Systems

Investing in Systems

Strategic InitiativesStrategic Initiatives

Tactical ExecutionTactical

Execution

Re-Engineering Processes

Re-Engineering Processes

BUSINESS PROCESS

BUSINESS PROCESS

MANUFACTURING

HR SALES

FINANCE

NETWORKEDINFRASTRUCTURE

NETWORKEDINFRASTRUCTURE

CORESTORAGE

SECURITYWIRELESS

IPT

APPLICATIONSAND SERVICESAPPLICATIONSAND SERVICES

ERP E-SALES

SUPPLY CHAIN MGMT

E-LEARNING


Core vs. Context Model

Ris

k

MajorChallenge

Non-mission Critical

All Other Processes

Non-mission Critical

All Other Processes

Mission CriticalProcess Shortfall

Creates Serious And Immediate Risk

Mission CriticalProcess Shortfall

Creates Serious And Immediate Risk

ContextAll Other Processes

ContextAll Other Processes

CoreProcess Creates

Differentiation ThatWins Customers

CoreProcess Creates

Differentiation ThatWins Customers

Differentiation


The Cycle of InnovationCoreCore ContextContext

Mission CriticalMission Critical

Non-Mission-CriticalNon-Mission-Critical

DeployDifferentiation

at Scale

DeployDifferentiation

at Scale

InventDifferentiated

Offering

InventDifferentiated

Offering

ManageMission-criticalProcessesat Scale

ManageMission-criticalProcessesat Scale

ExtractResourcesto Reinvestfor Core

ExtractResourcesto Reinvestfor Core

2. Deploy2. Deploy

1. Invent1. Invent

3. Manage3. Manage

4. Offload / Repurpose4. Offload / Repurpose


3. Manage3. Manage2. Deploy2. Deploy

1. Invent1. Invent

Productivity Opportunities Lie in Context


Resources Needed Here

Resources Needed Here

Operational Excellence

Productivity

Operational Excellence

Productivity

OperationsGold Mine

Growth Investments

Innovation

Growth Investments

Innovation

CoreCore ContextContext

Resources Available HereResources Available Here

ConsolidateStandardizeOptimize

ConsolidateStandardizeOptimize


Consolidate, Standardize, Optimize Non-SellingRepurpose Resources to Selling

CoreCore ContextContext

Mission CriticalMission Critical

Non-Mission-CriticalNon-Mission-Critical

2. Deploy2. Deploy

1. Invent1. Invent

3. Manage3. Manage


SalesSales OPSOPSConsolidateStandardize

Optimize

ConsolidateStandardize

Optimize

Repurpose Resources to Selling

Repurpose Resources to Selling

Non-Selling Context

Work

Non-Selling Context

Work


Cisco Order Management Process

Cisco Account Manager

Credit CheckCredit Check

Cisco Inside Sales Account

Manager

Cisco Inside Sales Account

Manager

Cisco Inside Channel Account

Manager

Cisco Inside Channel Account

Manager

Partner Account Manager

Partner Account Manager

Cisco CustomerService

Cisco CustomerService

Cisco Sales Credit Specialist

Cisco Sales Credit Specialist

DistributionInside SalesDistributionInside Sales

Cisco Field Sales

Administrator

Cisco Field Sales

Administrator

PartnerPurchasing

PartnerPurchasing

CustomerCustomer


Inter-Enterprise Opportunities for ProductivityInter-Enterprise Opportunities for Productivity

CustomersCustomers

Driving Productivity Across the Value Chain

PartnersPartnersSuppliersSuppliersCiscoCisco

Support the BusinessSupport the Business

Idea to OfferingIdea to Offering

Market to OrderMarket to Order

Quote to CashQuote to Cash

Forecast to DeliveryForecast to Delivery

Issue to ResolutionIssue to Resolution


Cisco-CentricCisco-CentricCustomer-CentricCustomer-Centric

Cisco 3.0 Requires Fundamental Shift in Leadership Mindset

What and how customers wantWhat and how customers want

Invest for customerInvest for customer

Optimize for CiscoOptimize for Cisco

Collaborate to accelerateCollaborate to accelerateCumulative portfolio approachCumulative portfolio approach

Prioritize and deprioritizePrioritize and deprioritize

Global mandateGlobal mandate


Blueprint for Collaborative Leadership

Operational ExcellenceOperational Excellence

Leadership AlignmentLeadership Alignment

Customer-CentricityCustomer-Centricity

Employee Commitment

Employee Commitment

Total Cisco ExperienceTotal Cisco Experience

Communicationsand

Collaboration

Communicationsand

Collaboration

ChangeLeadership

ChangeLeadership

Discipline of Continuous

Improvement

Discipline of Continuous

Improvement

Collaborative Leadership

Collaborative Leadership


Don’t Confuse Leadership with Management

Transform people into new roles

Transform people into new roles

Develop employee skills Develop employee skills

Effectively deal with change Effectively deal with change Cope with complexity

and drive predictability Cope with complexity

and drive predictability

Set direction Set direction Plan and budget Plan and budget

Fit people to vision Fit people to vision Fit people to jobs Fit people to jobs

Focus on inspiring Focus on inspiring Focus on controlling tasks

and outputs Focus on controlling tasks

and outputs


In Closing

Opportunity lies in taking advantage of tremendous global opportunities

Process will help to lay a solid foundation

Collaborative Leadership will enable this new growth

Documents

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential01 30 08 1 The Changing Face of Leadership at Cisco Randy Pond Executive Vice President