This Case is about CUSTOMERS, ORGANIZATIONAL STRUCTURE, REORGANIZATION, STRATEGY EXECUTION, TECHNOLOGY
PUBLICATION DATE: January 06, 2009 PRODUCT #: 409062-HCB-ENG
In response to the 2001 market decline, a major restructuring that transformed the business from a decentralized to central organization was executed by Cisco Systems. While understanding that a central, practical construction was needed to prevent resource and merchandise redundancies, in addition, it risked making the business less customer-centric.
To mitigate this threat, Cisco executed a cross-operative system of executive-level councils that would bring leaders of distinct functions together to collaborate and focus on problems and the needs of particular customer groups. Each council uses a “Three-in-a-Carton” direction model comprising an executive leader from the engineering or technology business unit, an associate of the goto-market team, and an operations resource manager.
Each council is also accountable to the Operating Committee, which is chaired by CEO John Chambers and establish the long term corporate strategy and allocation of corporate resources. Several other firms have neglected at facilitating cooperation across functions-particularly large organizations-but the Cisco’s system has been triumphant because the company remained committed to the system, demanded a consistent infrastructure while also permiting for flexibility, gave members decision making ability, and used council leaders who flourish in collaborative environments. The success of the council system resulted in the development of 20 boards of “sub-councils” in 2007. The boards are charged with driving by addressing unique problems too narrow for the councils to address development efforts and customer reach farther into the organization.