Cisco Systems Uses Its Culture for Competitive Advantage
Manny Rivelo, a senior vice president at Cisco Systems, belongs to more internal company teams than he can count on both hands. "I'm on a litany of them—three councils, maybe six boards, and five working groups," he says.
They're part of an organizational web dreamed up by CEO John Chambers—a structure so complex that it takes 15 minutes and a whiteboard to fully explain. Chambers, however, uses just three words to describe the benefits of the San Jose networking giant's manage-ment system: "speed, skill, and flexibility."
It seems paradoxical that a multilayered organi-zational model would actually speed things up. But ...view middle of the document...
As Cisco has entered new lines of business (the router company now makes thousands of products, including high-end teleconferencing systems and cable boxes), its teams and councils have multiplied. Today there are at least 10 boards and more than 30 councils, says Rivelo, who admits that he doesn't know the exact number.
The total is hard to pin down because it's constantly evolving. Padmasree Warrior, Cisco's new chief tech-nology officer, belongs to the enterprise council—teams at that level target $10 billion-plus market opportuni-ties. She recently saw a chance to deliver services over the Internet and formed a smaller working group to re-search the idea. Four months later that group evolved into a board, which is a subset of a council.
Although the system has been in place for years, its success is difficult to quantify. Cisco says the team approach helped it figure out in only eight days that it should acquire Web-conferencing company WebEx, for example. But Yankee Group analyst Zeus Kerravala says he's still waiting for productivity metric. "Nothing will show success more than proof," he says.
Technology chief Warrior says that she was skeptical when she first came to Cisco in March from Motorola (MOT, Fortune 500). But she became a believer when she and others from different divisions forged a part-nership with an outside company in a single council meeting. What would have required multiple meetings at other firms "took the four of us on a phone call," she says.
Such quick decision making could help Cisco ex-ecute some key acquisitions in the current slowdown. For many big companies, belt-tightening usually means putting off big decisions until conditions improve.
Cisco, with $26 billion in cash, has the coffers—and apparently the management structure to immediately start shopping.
The Pay-for-Performance Program among Denver Teachers Hits a Roadblock
The Denver Public Schools' pay-for-performance plan to motivate teachers was hailed as a model for the rest of the country when it took effect three years ago. It now stands on the verge of collapse after months of contract negotiations have stalemated.
Some teachers have staged sick-outs: others plan to welcome families back to school this week by handing out fliers denouncing the district's contract offer. There is even talk of a strike.
National education experts are dismayed. If merit pay can't work in Denver, "future initiatives are destined to fail," said Matthew Springer, director of the National Center on Performance Incentives at Vanderbilt Uni-versity in Tennessee.
The breakdown stems from a philosophical disagree-ment between the school district and the union.
The district is offering large increases in incentive pay, but the biggest rewards will go to early and to midcareer teachers—and to those willing to take risks by working in impoverished schools or taking jobs few others want, such as teaching middle-school math. Yearly bonuses for...