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August 2004 The Upside of Down TimesCompanies win or lose the battle for market share during the tough times, not the boom periods, Cisco Systems CEO John Chambers told the Business School's first Technology Industry Conference on April 7. Successful leaders must build change into their organizations, be extremely attentive to market transitions, and react quickly, he said. The 2001 crisis struck Cisco so hard that in 45 days it went from 70 percent growth to minus 30 percent. As soon as Cisco executives realized the crisis Chambers described as "a hundred-year flood" would last for a long period, they designed a strategy to lower expenses, focus on future opportunities, and increase productivity, and implemented it in 51 days. That strategy brought them back to normal profitability in only nine months. Chambers has reasons to be optimistic, but the situation is still fragile, he said. More important, one should always be skeptical with businesses that are doing too well. "If you aren't making mistakes, you're not taking enough risks; and, in my industry, if you don't take risks, you get left behind." |
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