Cisco Board Names Chuck Robbins Next CEO; John Chambers to Become Executive Chairman


Three years ago Cisco CEO John Chambers said that his successor would be named within the next 2-4 years. Right on schedule, the Cisco Board of Directors after a 16 month process has announced that effective July 26, 2015 17 year Cisco vet Chuck Robbins will take the helm of the networking giant. Robbins was also elected to the Board effective May 1. Chambers for his part is not ending his affiliation with the company he was instrumental in turning into an industry heavy weight, as he will assume the role of Executive Chairman on July 26, 2015, and will continue to serve as the Chairman of Cisco’s Board.

A changing of the guard at Cisco

Chambers could not have been more effusive about Robbins and his abilities to guide the company through what both he and Robbins believe is going to be a tumultuous period, but one filled with significant opportunities for Cisco.  In making the announcement, Chambers commented that:

“This is the perfect time for Chuck Robbins to become Cisco's next Chief Executive Officer.  We've selected a very strong leader at a time when Cisco is in a very strong position. . .Today’s pace of change is exponential. Every company, city and country is becoming digital, navigating disruptive markets, and Cisco’s role in the digital transformation has never been more important. Our next CEO needs to thrive in a highly dynamic environment, to be capable of accelerating what is working very well for Cisco, and disrupting what needs to change. Chuck is unique in his ability to translate vision and strategy into world-class execution, bringing together teams and ecosystems to drive results. Chuck knows every Cisco segment, technology area, and geography, and will move the company forward with the speed required to capitalize on the opportunities in front of us. He is a champion of the Cisco culture and has an incredible ability to inspire, energize, and connect with employees, partners, customers and global leaders. Chuck’s vision, strategy and execution track record is exactly what Cisco needs as we enter our next chapter, which I am confident will be even more impactful and exciting than our last.”

The selection of a company insider after what was characterized as a long period of evaluation is not surprising.  Indeed, Robbins pedigree of having worked with an impressive track record in areas over the years that have touched almost every stakeholder was undoubtedly an important consideration; he knows firsthand the concerns of customers, employees and channel partners (who generate 80 percent of Cisco’s business), and obviously has intimate knowledge of the company vision, strategy and challenges.

He also is fully appreciative of what it means to follow in the footsteps of an industry legend, whose guiding hand will remain.  In fact, Chambers will be devoting his time to supporting Robbins and engaging closely with customers and governments around the world, with a focus on leading Cisco’s role in country digitization. 

Image via Shutterstock

Robbins most recently served as Cisco’s senior vice president of worldwide operations, leading the company’s global sales and partner team that drives $47B in business for the company. A self-proclaimed “numbers guy”, as noted in the announcement, he has helped lead and execute many of Cisco’s investments and strategy shifts, including building the key partner program which is now worth more than $40B. He was also a key architect of the company’s strategy for the commercial business segment, which grew 8 percent year-over-year last quarter, and now represents 25 percent of Cisco’s total business.  He has sponsored the security and collaboration businesses at the executive level and was a sponsor for the Sourcefire and Meraki acquisitions, and he was a member of the team that has led Cisco’s transformation over the last 3-plus years.

“I joined Cisco 17 years ago because I wanted to be a part of a company where I believed the possibilities were limitless. Today, I am even more convinced that Cisco is that company,” said Robbins. “Over the past 20 years, John Chambers’ vision and leadership have built Cisco into one of the most important companies in the world; a company fiercely committed to delivering for its customers, shareholders, partners, and employees. The opportunity that lies ahead for Cisco is enormous, and the ability to lead this next chapter is deeply humbling and incredibly exhilarating. I am focused on accelerating the innovation and execution that our customers need from us. Their success will continue to drive us.  At a time when our industry is on the cusp of more disruption than we’ve ever encountered, I couldn’t be more confident in our ability to win, or more honored to lead this great company.”

Lead independent director Carol Bartz was also effusive in praising the Board’s unanimous decision saying: “Chuck has demonstrated the same energy and passion to make Cisco great that John Chambers has demonstrated during his entire 20-year career as CEO. Finding a successor who could follow John was a challenge we took very seriously. All those we considered have the intellect, integrity, and charisma required for the position. Chuck stood apart as a leader with an extraordinary ability to connect vision, people and ideas to drive strategy and execution.”

For those interested, Cisco in conjunction with the announcement put out a video interview conducted by Melissa Schlcher, VP Corporate Communications & Investor Relations, with Robbins and Chambers.  The roughly 9 minute interview is worth a viewing on two counts.  First is Chambers reflections on his tenure which saw him grow the company from $1.2B in annual revenue to its current run rate of $48B with non-GAAP earnings per share growing more than 3,000 percent. Second is the briefing getting to know you discussions with Robbins who reiterates the importance of the Cisco culture to its success and his attention to “outcomes.”

Cisco interview by Melissa Schlcher with Chuck Robbins and current CEO John Chambers.  

Robbins also noted that he will take some time to get input from all of the company’s stakeholders in the next 90 days as he gets ready to put his stamp on the company. 

How the succession plays out with investors over the coming weeks and months will be fascinating.  There has been much speculation in the past as to the depth of Cisco’s bench as several key executives have moved on to other opportunities, especially as it became clear that the Chambers era was coming to a close. 

Chambers himself remarked several months ago that in the next several years it was his belief that two or three of the top five companies in ICT were in jeopardy of not surviving the challenges that lie ahead.  While not naming names, his point about industry restructuring as being a dominant part of what will likely be seen as an industry watershed period when historians look back at the next several months as we all know from reading the headlines may have been more than a bit prescient. 

Cisco obviously was not on his undisclosed list, but how it fares under Robbins in terms of its ability to continue to dominate almost every market it plays in is certainly going to be the subject of a lot of scrutiny.  John Chambers really is a tough act to follow, but as we have seen with successions at places like Apple, Microsoft, Yahoo and IBM just to name a few, following a legend and forecasting the success of a new leader is something that people like to speculate on but is certainly hard to accurately predict.      

Edited by Dominick Sorrentino
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