Doing both

Doing both - How Cisco Captures Today's Profits and Drives Tomorrow's Growth by Inder Sidhu Senior Vice President of Strategy and Planning for Worldwide Operations at Cisco is an excellent and a must-read book for any mid-sized to a large company executive who often is forced to choose between two opportunities or two choices with opposing principles.

One example is when a company is looking to expand into new markets and business models. The challenges faced in growing a company from a startup to a mid-sized company are completely different from taking the company from mid-size to the next level. The key difference is that a startup or an early growth company has the flexibility to change and adapt the business model and organizational structure without much distraction to the existing structure whereas, bigger companies set up for a specific business model cannot change without significant distraction. For example: an organization well set up to sell high priced/high margin, low volume product to enterprise customers cannot diversify to sell low priced/low margin, high volume product to consumer market. On the other hand, a company cannot afford to ignore adjacent markets. The author of the book cites an example where Cisco which was selling $500,000+ equipment to enterprises just could not afford to ignore the consumer networking equipment market which was due to grow from $24b to $70b. To expand into this market, Cisco acquired Linksys and let Linksys run as a seperate business unit with its own sales, development and marketing divisions. When the next opportunity to sell highly customized product to telecom service providers came along, Cisco again found that it did not have the required expertise to customize and service the highly demanding service providers. Cisco acquired Scientific Atlanta which had significant expertise in providing set top boxes to telecom service providers. The next opportunity that Cisco did not want to ignore but on the other hand did not have the expertise was SaaS. To enter into this market, Cisco acquired Webex. Through these acquisitions, Cisco has successfully expanded to adjacent markets and has built a great internal model for recognizing, acquiring and integrating companies.

The author also talks about the strategies adopted to enter into emerging markets while continuously growing in established markets. Unlike most other US companies looking at emerging markets for only cheap labor, Cisco opened their global center of excellence in Bangalore, India and made this their second head quarters.

Cisco while emphasizing on excellence in their products and services, provides an equal importance on the relevance i.e does the product or service help customers achieve their own goals? This is key for any Product Manager or technologist to remember as it is not uncommon to see many companies launch products that do not take off since they are not relevant to the users. Lesson is focus on both relevance and excellence not one or the other.

The other topics covered in the book include how companies need to ensure customer satisfaction while also ensuring that partners (eg. resellers) are happy, reward super star performers while also promoting team work and supporting decision making while authoritative leadership is enforced when required.

Reading this book has provided me new approach to solving problems, at both work and personal life. However, it does not mean "Doing both" is the approach for every problem. It provides a new framework to think through and may be useful in a lot of situations.