Trends: The future according to Cisco

Normally, my focus is private businesses and non-profits, not public companies; however, The Economist’s profile of the network technology giant Cisco is applicable for all audiences:

Cisco, which had revenues of $36 billion in its latest financial year and employs more than 66,000 people, has been making headlines again for different reasons as well. “Cisco plans big push into server market,” read one in January. Another, in March, declared: “Cisco pushes further into consumer territory.” More recently a third said: “Cisco: smart grid will eclipse the size of internet.”

In other words, the plumber is branching out….[T]he company is tackling more than 30 “market adjacencies”, as new areas of growth are called in the corporate argot.

Cisco is moving everywhere it thinks networking will change how we live and how we work and that makes this article a fascinating lens into the future. I found the section on video particularly compelling:

Cisco believes [video] will in the long run account for a lot of communication among both businesses and individuals….To get an even bigger slice of the video pie, Cisco developed TelePresence, the first unit of which was sold in December 2006. It combines big, high-definition screens, spatially sensitive microphones, custom video-processing technology and networking equipment. What is more, setting up a TelePresence meeting is as easy as making a telephone call. Facilitators are no longer needed.

Cisco intends to push TelePresence into the home. This is the main reason why it bought Scientific Atlanta, a maker of set-top boxes, for $6.9 billion and, more recently, spent $590m on Pure Digital Technologies, maker of Flip, a range of hand-held camcorders. TelePresence at home will soon be combined with another project: sports and entertainment. The firm intends to turn stadiums into multimedia temples—and eventually to pump the match-day experience into living-rooms. Mr Chambers [Cisco CEO] hopes one day to watch North Carolina against Duke, archrivals in American college basketball, with his sister while they are linked by TelePresence.

Sports and entertainment might be the drivers, but one can envision this technology being transformational in virtual health care and education, or almost any consultative or knowledge-based transaction. UnitedHealth Group, Marriot, and Starwood Hotels are three companies making major investments in TelePresence centers.

In fact, Cisco is convinced that the network is enabling and defining a new organizational model based on “co-ordinate and cultivate” rather than “command and control.” A significant portion of the article describes Cisco’s restructuring initiative: to centralize and streamline functions like engineering, manufacturing, and marketing while replacing business units with “an elaborate system of committees made up of managers from different functions.” What comes to my skeptical mind is the old “when everyone’s responsible, no one’s responsible.” However, Cisco is hell-bent on overcoming the traditional shortcomings of cross-functional structures through a combination of collaborative technologies and organizational development strategies. It’s a fascinating read. I confess to a degree of skepticism, but John Chambers is highly regarded and if they make their structure work, it may soon be coming to an organization near you!

Topics: Health care, Innovation, Opportunity