Cisco announced that its next CEO would be Chuck Robbins, a 17-year Cisco veteran who was leading the company’s global sales and partner team.
This is a surprise, but it shouldn’t be.
Two years ago, Cisco talked about the retirement of its long-time CEO, John Chambers, who is 65, saying it had about 10 candidates in mind and naming Robbins among them.
But the surprise is this: Rob Lloyd was widely considered to be Chambers’ heir apparent by those inside and outside the company. He ran worldwide sales before Robbins and his most recent title was president of development and sales, part of a promotion in 2012 which garnered him a finger into Cisco’s massive engineering efforts.
Every indication was that Chambers was grooming Lloyd, who was widely referred to as Cisco’s No. 2 man, even though Cisco had a COO, Gary Moore, who joined the company in 2001 and became COO in 2011, and was also said to be an internal candidate for the CEO job.
Lloyd had been making more public appearances, speaking on stage. In 2013, Chambers even towed Lloyd and Moore into a CEO meet-and-greet press conference and glibly talked about retiring, playing golf and saying “I can watch these guys run the company.”
On the other hand, Cisco has a long history of skipping over those heir apparent. Chambers has been talking about — and pushing back — his retirement plans for years and years. And heirs have either gotten sick of waiting and left, or were politically pushed out.
A few of the previous heir-apparent include Ned Hooper, formerly chief strategy officer, who left in 2012, Charlie Giancarlo, the former No. 2 to Chambers who left in 2008, and other names like Mike Volpi and Tony Bates, former senior vice presidents who left and had also been bandied about as possible CEOs.
The other surprise is that Chambers announced a retirement at all.
Chambers clearly loves his job at Cisco, where he flies around the world in his private plane, meeting with world leaders (charging back flight time to the company like a rank-and-file employee charges back car mileage).
Many inside the company believed that Chambers would more-or-less never retire, sticking around throughout his whole 60’s, maybe beyond.
Chambers is still keeping a solid foot in the game. He’s becoming “executive chairman” a title that indicates a lot of hands-on involvement with the company. This was always part of the plan, he said in 2012, the last time he talked about retirement.
At that time, he said he had agreed to stay on for 2 to 4 more years, which would have taken him through 2016. “The job of the board and myself is to make sure this next one goes really smooth,” he said. “Assuming the board wants me to and assuming the shareholders do, I’ll stay on as chairman after that.”
Of course, Cisco has also been going through some rough times stemming back to 2011, when the company went through a massive re-org and turnaround.
The company had also announced fiscal-year-end layoffs for the last four years in a row as of its most recent fiscal year, which ended in August 2014. Moore admitted to employees that annual layoffs are “the wrong way to do it.”
Last fall, the company went through another massive re-org, this time shuffling around the 25,000 people that worked in its engineer unit. That caused a lot of people to leave Cisco, either through job cuts or voluntarily looking for a new job, many sources told us.
Last June there was a fresh crop of rumours that Chambers would be officially announcing his retirement when the fiscal year ended in August. But like so many of those rumours before them, it didn’t happen then.
As for how Robbins will do as Cisco’s next CEO, after Chambers 20-years as CEO, we’ll see.
The company’s dominance in corporate networking is under attack by a new technology called “software-defined networking” that offers a whole new way to build networks, and makes them faster, cheaper and easier to manage. This new method is being backed by startups run by ex-Cisco engineers, as well as big internet companies like Facebook.
Chambers had been, for years, trying to diversify the company to rely less on networking but for now network technologies still make up the lion’s share of company’s $US47 billion in revenue.