Cisco To Restructure Top Units, Cut Down On Internal Councils


Cisco on Thursday confirmed a number of changes to its organizational structure -- including the paring-down of its much-criticized internal councils -- as part of a promised series of moves in the wake of several quarters of disappointing earnings results.

Most notable among the changes is that Cisco is changing its council structure, paring down a larger collection of cross-company councils -- from nine, according to Cisco -- to three: enterprise, service provider and emerging countries.

The Service provider council will be led by Pankaj Patel and Nick Adamo, senior vice presidents or service provider engineering and service provider sales, respectively. Enterprise will be led by Padmasree Warrior and Paul Mountford, senior vice president/CTO and senior vice president, sales, respectively. Emerging countries will be led by Wim Elfrink, chief globalization officer and Edzard Overbeek, president, Cisco Asia Pacfic and Japan.

The move is a big change in direction -- much called-for by members of the analyst community -- from Cisco's decision to create councils to foster collaborative, rather than top-down, decision-making several years ago.

The moves follow a series of ongoing public relations headaches for Cisco, including a candid memo from Cisco Chairman and CEO John Chambers in early April that admitted Cisco had disappointed investors, confused employees and lost some credibility in the marketplace.

Cisco already made sweeping changes to its Consumer unit, including the mid-April announcement that it will shut down the Flip video camera business it acquired with Pure Digital in 2009.

Among other changes to Cisco are that its Worldwide Field Operations organization will now be organized into three regions: the Americas (including U.S., Canada and Latin America); Europe, the Middle East and Africa; and Asia Pacific/Japan/Greater China. According to Cisco, its business will still be managed by geographic regions, but there will be dedicated teams for large enterprise, public sector, commercial, small business, service provider and Cisco partners. Rob Lloyd, executive vice president, will continue to lead Worldwide Field Operations.

Elsewhere, Cisco Services will "organize around key customer segments and delivery models in alignment with Field Operations," according to Cisco. Gary Moore, who was named executive vice president and COO at Cisco in February, will continue to lead Cisco Services.

Cisco Engineering will now be co-led by Pankaj Patel, senior vice president, and Padmasree Warrior, senior vice president and CTO, both of whom report to Moore. Cisco is also launching a dedicated group within Engineering focused on emerging business, to be led by Marthin De Beer, senior vice president. According to Cisco, that group will focus on "select early-phase businesses" and De Beer will be tasked with continuing to integrate Cisco's Medianet architecture for video across all of the company's units.

A Cisco spokesperson told CRN that Cisco anticipates no workforce reductions based on the announcements.

A number of high-profile executives, including former collaboration chief Debra Chrapaty and longtime senior vice president Daniel Scheinman, have left Cisco in recent months.

Cisco's top executives said Wednesday's changes are needed to simplify Cisco.

"Cisco has driven transformational change before, and we are again transitioning to the next stage of the company's evolution," said Chambers in a statement. "Today the market is driving toward simplification and it's why the network matters. Our role as the leading network platform provider is strong, we have great customers, talent and expertise -- and we know how to bring innovators to every aspect of the network. It's time to simplify the way we execute our strategy and today's announcement is a key step forward."

"Cisco is focused on making a series of changes throughout the next quarter and as we enter the new fiscal year that will make it easier to work for and with Cisco, as we focus our portfolio, simplify operations and manage expenses," Moore said in a statement. "Our five company priorities are for a reason -- they are the five drivers of the future of the network and they define what our customers know Cisco is uniquely able to provide for their business success. The new operating model will enable Cisco to execute on the significant market opportunities of the network and empower our sales, service and engineering organizations."

According to Cisco, the changes will be made over the next 120 days, and its new Sales organization will be in place by the start of its fiscal 2012 on Aug. 1.