Chambers, CEO of Cisco Systems, Inc., was forced to recognize the worst technical decline in history for large companies. In a special report entitled "Cisco's Comeback" written for Business Week, Peter Burrows explains how Chambers realized he had to turn the company around, after a period of denials. Chambers came to this decision after an around-the-world business trip where he saw first-hand what was happening to other companies. He realized that the world had changed, and that Cisco would have to adjust in order to survive. He had to rethink every aspect of the communications company. Chambers states, "At times like these, you have to analyze what you did to yourself vs. what the market did to you." Chambers and Cisco's philosophy of "re-growth at any cost" had to be changed to hands-on organization. Chambers began to manage by thinking of the profit margin. He believed he had to rethink the "downturn" and take appropriate action; therefore, getting the company ready for the "upturn.".
Chamber devised a six-point plan for turning the company around:.
1. Imposed operating discipline on entrepreneurial staffers.
2. Engineers had to work on technologies approved by a newly appointed engineering czar.
3. Midlevel managers were placed on budgets.
4. Executives had to become part of a team to earn a bonus.
5. Personal accountability was enforced for all employees.
6. Buying binges were stopped, as well as purchases of other smaller networking companies.
Chambers" reputation received negative feedback when he announcing his new policies. Chambers attacked the company's management with zeal and determination to get his company through turbulent times.
Critique.
Cisco Systems, Inc., a leading networking computer company in 2001 is located in the Silicon Valley of California. Chambers, the CEO of Cisco, had to make major decisions for a massive overhaul as technical business declined after years of a computer boom.