Cisco: Integration of Innovation and Operation

229 Pages·2023·3.197 MB·English

by  Xiaoying Dong, Yan Yu, Jiali Zhou

Xiaoying Dong 
Yan Yu 
Jiali Zhou
Cisco
Integration of Innovation and Operation
Cisco
· ·
Xiaoying Dong Yan Yu Jiali Zhou
Cisco
Integration of Innovation and Operation
Xiaoying Dong Yan Yu
Guanghua School of Management School of Information
Peking University Renmin University of China
Beijing, China Beijing, China
Jiali Zhou
Department of Information Systems,
Business Statistics and Operation
Management
Hong Kong University of Science
and Technology
Kowloon, Hong Kong
ISBN 978-981-19-7869-2 ISBN 978-981-19-7870-8 (eBook)
https://doi.org/10.1007/978-981-19-7870-8
Jointly published with Peking University Press
The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the
print book from: Peking University Press.
Translation from the Chinese language edition: “Cisco’s Business Practices” by Xiaoying Dong et al.,
© Peking University Press 2014. Published by Peking University Press. All Rights Reserved.
© Peking University Press 2023
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Preface
The improvement of internationalization and innovation is a new challenge and
opportunity that Chinese enterprises face in the process of economic globalization.
The question of how to build enterprises with global competitiveness, innovative
spirit and transformational ability is a subject that scholars, entrepreneurs and policy-
makers have considered and explored for a long time. In this process, the continuous
study of internationally competitive enterprises is one important way of expanding
knowledge in these areas.
In 2008, Guanghua School of Management, Peking University, and Cisco estab-
lished the Guanghua-Cisco Leadership Institute. Among the institute’s educational
research activities, SASAC selected senior executives of state-owned enterprises
study at Peking University then train leading talent for China’s development of world-
class enterprises Cisco headquarters. In the four years from 2010 to 2013, the SASAC
selected four sessions of nearly 50 senior leaders of state-owned enterprises to partic-
ipate in this training course. The author had the privilege of participating in these four
courses and engaging with the chairman and president of Cisco Corporation, as well
as senior leaders in human resources, marketing, operations, information technology,
supply chain, risk control, innovation systems, social responsibility, cooperation and
strategic alliances. During lecture sessions, leaders of the central enterprises raised
many high-level questions about Cisco’s practice, and the summit dialog between the
two sides fully reflected the insight of the business leaders, conveying their aspirations
in management.
The book is derived from a case study that occurred over a four-year period
and fully recreates the sessions and refines the essence of the experience, providing
a unique opportunity for readers to gain insight into how Cisco has successfully
transformed and continued to innovate in a competitive market. The author hopes
to provide knowledge of best practices from world-class enterprises to potentially
address the real problems faced by Chinese enterprises. Thus, we have written a book.
In the process of our research, we adopted a three-tiered pyramid structure: the first
part is a study and summary of the Cisco case, which focuses on how Cisco can
be both separate and collaborative in innovation and management dual ability; the
second part is the main body of the book with nine chapters that explore the specific
v
vi Preface
practices and methods of Cisco’s innovation and management activities; the third part
is a problem-oriented dialog that complements the second part with more in-depth
detail, further presenting questions and solutions on innovation and management in
an impromptu question-and-answer session. Each of these three parts has its own
focus, providing a step-by-step process for improving innovation and management
from practice to theory.
Throughout the writing process, we paid careful attention to three principles.
First, we focused our attention on first-hand information. Our project aimed to: (1)
record all teaching processes (including Chinese conic interpretation) and relevant
videos; (2) simultaneously document all Chinese content in written text to verify
English audio recordings or videos of important but uncertain content; (3) integrate
text materials from the perspective of practitioners, organizing them by practical
problem topic in enterprise innovation and management; (4) refine valuable ideas
and practices under the two propositions of innovation and management; and (5)
ensure fresh activity and scenario reproduction of the case study. The third part of
this book specifically retains high-level dialog between the leadership of the central
enterprise and Cisco senior management, whether it is the immediate question of the
leadership or the on-site responses by senior Cisco leadership sharing wisdom and
management experience. On-site questions and answers are specific and targeted
and are closely related to business practice, so they have special value.
The second principle focused on problem orientation. In the process of writing
the case study, the basic principle includes organizing the content by problem area
at the core and constructing the knowledge system through the internal logic relative
to the problem. The author conducts a targeted investigation and analysis of Cisco’s
case and aims to understand Cisco’s experience and methods in practice based on the
teaching experience of entrepreneurs and senior managers in Guanghua School of
Management of Peking University, the observation and judgment of China’s enter-
prise development, and based on the perspective and needs of Chinese entrepreneurs
and senior management. This book focuses on the dual capabilities of innovation
and management, and the second part describes Cisco’s innovation and management
capabilities in nine chapters. The author acknowledges that the length of the book
makes it challenging to present a complete and in-depth analysis of the key elements,
breadth and depth of information, and the level of analysis may also have limitations.
However, the book provides a framework for further discussion of innovation and
management strategies.
The third principle involved highlighting areas in need of further attention for
research and analysis. Based on systematic combing of the information related to the
case, the author tries to excavate the key elements of Cisco’s success from the perspec-
tive of innovation and management dual capacity-building and paradox management.
We chose the perspective of ambidexterity because some internationally renowned
successful enterprises have been in decline in recent years, prompting academic
institutions and businesses to consider that, in a rapidly changing and uncertain
competitive environment, enterprises should have both innovation and management
capabilities through investment in technological innovation, market transformation
and disruptive business models to build future-oriented capabilities. In addition,
Preface vii
bringing stable benefits to enterprises may ensure survival and sustainable innova-
tion and management development. We wanted to determine how Cisco’s case study
was able to do both. Thus, this book differs from news or other cases in that we
hope to summarize and extract from the case study the common topic of enterprise
development, that is, how to resolve the issues of dynamic balance of innovation
and management, system design and resource allocation in the information age,
technological innovation and disruptive business transformation. In the four levels
including enterprise learning, belonging, structure and performance, through effec-
tive paradox management of dynamic construction of dual capabilities, organizations
can better resolve the dynamic balance of innovation and management, system design
and resource allocation. The National Natural Science Foundation of China projects
(No. 72172155, 71371017) supports the research and translation of this topic.
I would like to thank the Guanghua School of Management of Peking Univer-
sity for the platform and learning opportunities provided to us, the leadership of
Guanghua-Cisco Leadership Research Institute and colleagues for their support, the
trust of SASAC and the leaders of the central enterprises--your insights into the
dialog and discussion have benefited me greatly, the senior leadership of Cisco for
their openness and frankness in the course of teaching and dialog, and the project
leader for the careful design and organization of the course of this study. All of
this support has been invaluable to our case study, and your wisdom and practical
experience have provided the foundation and material for this book.
In the course of writing this book, Wang Qixian, Liu Wei, Luo Yinglin and Cui
Yanyu from the Department of Information Management of Peking University partic-
ipated in the data collection and collation work, and Yang Hanyan, Ying Chenguang,
Wang Xueying, Liu Rongkun and Huo Haiping from the School of Information at
Renming University of China participated in the English translation work, expressing
their heartfelt thanks. Finally, I would like to thank my family for their love and care
which enabled me to move forward in difficult times.
Beijing, China Xiaoying Dong
Contents
Chapter 1 Integration of Innovation and Operation: The Way
Multinational Companies Survive ...................... 1
1 Background and Motivation ........................ 1
2 Explore and Use the Difficulties of Dual
Integration and Countermeasures .................... 3
2.1 Explore and Utilize the Approaches
to the Construction of Dual Capabilities ......... 3
2.2 Explore and Utilize the Thinking Method
of Constructing Dual Ability ................... 4
2.3 Explore and Utilize the Separation
and Integration Mechanism Built by Dual
Capabilities ................................. 5
3 Research Method and Process of the Cisco Case ....... 9
3.1 Research Methods ............................ 9
3.2 Research Process ............................. 11
4 Exploring and Utilizing Dual Integration: Cisco’s
Approach ........................................ 11
4.1 Explore the Separation Mechanism Between
Activities and Utilization Activities ............. 13
4.2 Explore the Integration Mechanism
of Activities and Utilization Activities ........... 17
5 Case Study Findings: From Dual Integration
to Dual Strategy Implementation .................... 25
References ........................................... 30
Chapter 2 Strategic Leadership .................................. 33
1 Introduction ...................................... 33
2 The Leadership of Cisco ........................... 34
3 The Core Responsibilities of Global Business
Leaders .......................................... 37
4 CEO’s Forward Thinking and Decision-Making ....... 40
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x Contents
5 How Does the CEO Shape the Corporate Culture ...... 41
6 Cultivation and Character of the CEO ................ 42
7 How Does a CEO Lead a Global Company? .......... 44
8 How Do Leaders Promote Corporate Change? ......... 46
9 Summary ........................................ 48
Chapter 3 Enterprise Transformation and Change
Management ......................................... 51
1 Introduction ...................................... 51
2 Outstanding Enterprise Is the Result of Continuous
Transformation ................................... 53
3 External Driving Forces of Strategic
Transformation ................................... 55
4 Internal Driving Force of Strategic Transformation ..... 58
5 How to Grasp the Opportunity of Strategic
Transformation? .................................. 63
6 Guiding Enterprise Transformation and Reform
with Strategic Direction ............................ 64
7 Stages and Methods of Transformation ............... 69
7.1 Define the Transformation Objectives ........... 69
7.2 Diagnostic Stage ............................. 70
7.3 Implementation Phase ......................... 71
7.4 Evaluation Phase ............................. 71
8 Cisco’s Digital Transformation ...................... 72
9 The Role of Leaders in Strategic Transformation ....... 83
10 Summary ........................................ 85
Chapter 4 Innovation System .................................... 87
1 Introduction ...................................... 87
2 The Main Obstacles of Innovation in Large
Enterprises ....................................... 89
3 Three Pillars of Cisco’s Innovation System ............ 91
3.1 Independent Research and Development ......... 91
3.2 Strategic Alliances and Partners ................ 92
3.3 Mergers and Acquisitions ...................... 92
4 How to Match Innovation with Business Model ........ 95
5 Judging the Value of Innovative Projects .............. 97
6 How to Speed up Innovation ........................ 99
7 Establish an Efficient Innovation Process ............. 101
8 How to Match Innovative Projects with Market
Maturity ......................................... 104
8.1 Innovative Strategies in the Growth Market ...... 104
8.2 Innovative Strategies in Mature Markets ......... 106
8.3 Innovative Strategies for Declining Markets ...... 107
9 Summary ........................................ 109
Contents xi
Chapter 5 M&A Strategy and Management ...................... 111
1 Introduction ...................................... 111
2 Evolution of Cisco’s Merger and Acquisition
Strategy ......................................... 112
3 Strategic Objectives and Value of Mergers
and Acquisitions .................................. 113
4 Search for Radical Technology and Inward-Style
Mergers and Acquisitions .......................... 115
5 Six Principles of Mergers and Acquisitions ........... 116
6 Acquisition Process and Methods .................... 118
7 Cultural Integration and Business Integration
After Mergers and Acquisitions ..................... 121
8 Keys to the Success of Mergers and Acquisitions ...... 124
9 The M&A Cases in Cisco .......................... 128
10 Summary ........................................ 132
Chapter 6 Strategic Alliance and Partnership Management ........ 135
1 Introduction ...................................... 135
2 Value Orientation of Strategic Alliance ............... 136
3 Evolution of Cisco’s Strategic Alliance ............... 138
4 Main Types of Partners ............................ 139
5 Evolution of the Evaluation Mechanism of Sales
Partners .......................................... 140
6 Treatment of Partners’ Interests ..................... 140
7 Construction of Partner Ecosystem .................. 142
8 Impact of Partners on Cisco’s Value Chain ............ 143
9 Summary ........................................ 144
Chapter 7 Build Highly Adaptable Corporate Culture ............. 145
1 Introduction ...................................... 145
2 Core Values in the Cultural System .................. 146
3 Build Innovation Culture ........................... 151
4 Use Culture to Build Sustainable Competitiveness ..... 152
5 Shaping Highly Adaptable Enterprises Through
Culture .......................................... 153
6 Five Levers for Establishing a Highly Adaptable
Corporate Culture ................................. 154
7 Principles for Promoting the Implementation
of Culture ........................................ 156
8 Summary ........................................ 157
Chapter 8 Corporate Governance and Risk Management .......... 159
1 Introduction ...................................... 159
2 Corporate Governance Structure and Wind Control
System .......................................... 160
3 How to Manage Risks Facing Global Markets? ........ 163