In Conversation: Executive Leadership Team at Cisco

Moderated by Ellen McGirt, Senior Editor, Fortune

Fran Katsoudas, EVP and Chief People Officer

Mark Chandler, EVP Chief Legal Officer

Irving Tan, SVP, Chief of Operations

Amy Chang, SVP, Collaboration Technology Group

Did you know that Cisco Systems has been on Fortune’s list of the 100 Best Companies since it was first published in 1998? We will learn from Fran Katsoudas, Mark Chandler, Irving Tan, and Amy Chang how Cisco continues to evolve and adapt in a time the industry is experiencing rapid change and transformation.

Cisco’s has a unique perspective on conscious culture – the importance of everyone being aware of the environment they’re part of, feeling accountable, and empowered. A culture that is focused on full spectrum diversity and inclusion where every employee feels connected to the company. Cisco executives will offer insights into what is driving the culture and the latest innovation in one of the tech industry’s best workplaces.

Key takeaways:
  • How to remain relevant and important in attracting the best talent
  • Ways to improve diversity in an industry that famously struggles with finding the perfect candidate who might have new and innovative approaches to the business
  • Structures for allowing all employees to participate in the innovation process
Show Transcript

Ellen McGirt:      Well hello everybody, it's wonderful to be back on the main stage here at the For All Summit. I always feel like I'm coming home, particularly to the house that Michael Bush is building, and the world that all of you are building. This is an unusually celebratory panel, I must say, and I couldn't be more excited to be tapped to lead it, and I want to start by focusing on an extraordinary milestone. Cisco has been on the 100 best companies list for 22 years, so ... I know, I know, and I'm really ... I was up at three in the morning watching the dumpster fire that the world is, and taking a moment to reflect on the extraordinary aspects of this accomplishment, so I ... Since this is the part where I usually say nice things about the panelists, I really want to dig in.

                             You know, the first year you were on the list, the devaluation of the Thai Baht and the Asian Financial Crisis which lasted for two years, which put so much of your supply chain and your customers at risk. The bursting of the tech bubble in 2000, which former CEO John Chambers described to me as a "Near-death experience," and it was an extraordinary recovery from that, and how truly bad those days were. The attacks on 9/11, the war that hasn't ended since then ... Look at their faces, they're like, "Oh my God, the world is terrible." The 2008 Global Financial Crisis, which you were uniquely prepared for, but your customers always weren't. Nor were the analysts who were following you, by the way.

Fran Katsoudas: That's right.

Ellen McGirt:      I mean, it was really an extraordinary time. The Great Recession, the rise of social media, the decline of democracy, and not to mention the transformation within your own organizations, like the true evolution in business models that just required the best thinking from the companies that you acquired, and from your employees, and from your customers and partners. The transition from John Chambers, a very present, very powerful and very beloved CEO to Chuck Robbins, who turned out to be very present, very beloved and completely up to the job, and not just ... And then to mention what's happening in the world, you know? There's war and famine and migration, natural disasters, climate change, global divisiveness, you know, and now we all wear blackface, so it's just crazy out there.

                             And here after all of this, 22 years on the list, Cisco is rested and ready and innovating, and bringing new products to market, collaborating, delighting clients, customers, delighting employees, and you've got 40-plus billion in the bank. So I say to you in front of your cousins on the list, well done Cisco, well done.

Fran Katsoudas: Thank you.

Ellen McGirt:      So before we talk about what you do and how you're doing it, I thought we'd just have you just introduce yourselves a little bit, and just talk a little bit about what you're working on today. I'm going to go right down the line, and Amy I'm going to start with you, because I think of the team we have here you're the newcomer, relatively?

Amy Chang:       That's true.

Ellen McGirt:      And you came in from Board member, and as an acquiree to the company. Could you tell us a little bit about the Cisco you joined and what that transition has been like for you?

Amy Chang:       It is a weird way to come into the leadership team through the Board, it is unusual. And I'll tell you a funny story, the first Board meeting I had where I went from being a Board member to part of the leadership team, you know that moment when you walk in the doors ... And I don't know many of you went to high school here in the States, but you've got to decide where to sit at lunch, right? And there's lunch tables, and you walk in, you're kind of looking and you're thinking, "Oh, do I sit in my regular seat, or do I go sit over there with the leadership team?" And I went and sat with the leadership team, and it was a different feel and I have to say some of the questions I had asked in just the prior Board meeting, that finger turned right back around and I had to answer those questions, so it was quite an experience.

                             And the reason I came, a big part of the reason is these three people sitting right here on stage. But I had the chance for two years to get to know our CEO, to get to know this leadership team, and to get to know the integrity and to get to know the courage there, and I felt like I knew enough about the culture to know I wanted to be part of it.

Ellen McGirt:      So tell us a little bit about Cognitive Collaboration and what you're working on with the Collaboration Group?

Amy Chang:       I would love to, and I'll keep it short, I promise.

Ellen McGirt:      We'll come back to it.

Amy Chang:       So basically, you know, if you think about what collaboration should actually do, if two people are thousands of miles away from each other, it should actually feel like they're right there in the room next to each other. The technology has advanced to the point where we can actually create that. And you know those few moments of stress before every meeting when you're thinking to yourself, "Do I have to dial in? What system do I need to use? How many numbers am I going to need to press? I'm driving, I can't dial right now." All of that stress should be gone, because we actually can make it so that it's one button to press every time, whether by voice or by physical pressing, and everything should just be easy and should just be contextual, right?

                             So we're putting our money where our mouth is and actually moving in that direction, which takes integrations with other providers like Apple, you know, native calendar integration, but it takes intelligence and context, because if you're going to be sitting down with someone, wouldn't you like to know more about them and their head space before you walk in with them? Those are all pieces that are part of Cognitive Collaboration.

Ellen McGirt:      That sounds ... I'm really interested in digging into that, but Irving, I want to get you in the mix here too. You are really in the thick of the middle of the people business, aren't you?

Irving Tan:          Yes.

Ellen McGirt:      You have a big operation, and I know that not only are you making sure that no one is left behind in terms of skills and training, but that you're responsible for transitioning the business too. I was wondering if you could just shape that out a little bit for us and what you're working on?

Irving Tan:          Sure. And I think you touched on it in your opening, right? Obviously both the world and Cisco has been through a lot of transition and transformation over the last three and a half decades we've been around, but probably more so over the last three years, we've probably gone through as much change as we've done over the last three decades.

Ellen McGirt:      Wow.

Irving Tan:          A lot of it's really around a pivot that we're making from being predominantly hardware-centric to having a much more balanced ... To where it's still a very meaningful hardware business, but having much more of a recurring revenue software-based business, and as we go through that, what I'm actually working with my colleagues on is really re-tooling and re-plumbing the entire foundation of the company. And as we go through that, it's not only about technology. A big piece of that is how do we transform our people as well? Both in terms of not only skills and capabilities, but also mindset as well, and I think the one thing that's really held us together and kept us very true in terms of where we need to go is the culture that we've laid out for the company.

                             So despite all the changes that we have had to go through and the sort of very rapid transformations, it's that culture that's really held the company together and kept people true to the end-state that we need to get to, and if you asked most of the team members that I have that probably are experiencing significant amount of professional and personal change, why do they stick it out? Because they love the culture of Cisco.

Ellen McGirt:      Okay, beautiful. So Frank, one of the things I was startled to learn as I was preparing for this panel is your commitment to radical transparency, which you don't hear from attorneys very much. I was wondering if you could talk a little bit, from your perch as General Counsel, how you think about what information that you're sharing with employees and the Boards, and how that plays into culture?

Mark Chandler: Sure. You know, I think if you're measuring me against the stereotype of the average corporate lawyer, you've set a really low bar and I'm grateful for that.

Ellen McGirt:      Bar's just rolling around on the stage, let's just have a good time.

Mark Chandler: I think the approach goes back to the kind of culture we have at Cisco that Irving as alluding to. I think historically we've always tried to take the approach of trying to treat all of our stakeholders, our customers, our suppliers, and certainly our whole team, the way we'd want to be treated ourselves. And when you start that way, you have a lot fewer legal problems. It's true, and that's what we try to do in terms of communication of issues that we see in the company. I think our team expects to know what's going on in the company, what the issues are that we're confronting and how we're dealing with them.

                             Fran has built an amazing Employee Relations Team that stands up for employees so that people don't have to be afraid to raise issues, and then we share broadly what we're seeing in the company and how we're trying to deal with it, and you build credibility with that, you build a strong culture, and at the end of the day for my function it means a lot fewer legal problems.

Ellen McGirt:      But you do specifically share things like employee complaints and ... And how do you track the response that people have when they get that information? Like, how has that changed the way people trust you?

Mark Chandler: Well, we do a lot of outreach all the time. We have tools, and I'm sure Fran will elaborate on this, that allow people every week to report what they love and what they loathe in the company. You know, strong words "Love" and "Loathe," to really get a feeling for what people have. Managers get to see that and respond individually with their own teams, and then at the aggregate level we get a sense of how employees feel about what the company is doing.

                             We had an interesting situation reporting to our Board all the cases that we'd had of different kinds of issues with discrimination, bias of different sorts, complaints about harassment, and you try to be open to what is real. And I had an interesting personal experience there, where one of the complaints was someone came forward and had seen a T-shirt that an engineer had posted in his cube that said "Blockchains Matter." And you know, my reaction was "Well, in an engineering humor kind of way, I could see why they thought that was funny, but you know, big deal."

                             And then I sat down with a member of my staff who happens to be African-American, and I was talking about this and saying, you know, "We've got to make this list real. We can't just put everything up there." And she said, "Stop, and think about how a play on Black Lives Matters feels to an employee who has to have the talk with her 12-year-old son about how to behave with the police, and the fact that she worries every day that he could end up getting hurt because of the way things work in our society sometimes, and then decide whether you think that's so funny and we ought to just ignore it."

                             And so the result of that conversation was it did get reported to the Board, and we went and dealt with that, and that's the type of open communication you need to have if you're going to solve problems, but when you build that transparency in and say the starting point is going to be that we're going to talk about these things openly, again, far fewer problems down the road.

Ellen McGirt:      So Fran, you're in the perfect position to bring this home. I have a million questions, but what is the secret? What is really working?

Franc Katsoudas:So I think a big part of it, and as I listened to Mark share this story, it's transparency and continuous learning. And Mark shared this story at a company meeting, and when he shared it it was a big part of learning that he went through in the conversation, it was the acknowledgement of these real issues that exist. It was also the acknowledgement that people may not understand sometimes the impact that they're having, and if we have an environment where we can talk we're going to work through those things, and so I think at the most foundational level that's what you're striving for, is honesty in conversation.

Ellen McGirt:      So how are you gauging employee health and engagement and the "Loving" and the "Loathing" part?

Fran Katsoudas: Yeah, so this is a big part of our overall team strategy. So about three years ago we kind of paused for a moment, and the realization that we had, and I'm sure you feel this way too, is that when you look at your companies, the biggest breakthroughs that you have, they happen on teams. It's not like an individual will own a big breakthrough, there's usually a team behind that. So hold that for a moment, and then if you think about it, your experience at work, it's a lot about your team. It's about your manager, it's who you work with, it's who you see left or right, whether that's virtually or in the room.

                             And so what we decided to do was really go big on teams, and what that meant was that we had to study the teams that we had at Cisco. We learned a lot about what our best teams at Cisco look like, and we learned what wasn't working too, which I think is really, really important for us. And one of the biggest learnings is that on best teams, people are playing to their strengths. And something that we tripped on along the way is that when you train a manager to look for strengths, you're training them to look for difference, and I think that started a very embedded view of inclusion within teams, and that's something that's incredibly important to all of us.

                             So what Mark was talking about is one of the pull-throughs is technology that we leveraged to have this conversation about "Love" and "Loathe," and if you think about ... Especially "Loathe," "What did you loathe last week?" There has to be trust for you to tell your manager what you loathe, and we all do a check-in with our boss, who happens to be the CEO, and there are times where my "Loathe" is light and funny and probably more of an annoyance, and then there's sometimes it's heavy and I need to talk to him, and the coolest thing is I think over time as leaders you learn, and so we're really driving this team focus, but really the understanding of every individual around the table.

Ellen McGirt:      You know, I was really struck last year when a memo that the CEO had written went public to all ... And it was about suicide, and that to me was such a powerful indication of what he was capable of sharing, and the kind of candor he was capable of eliciting from people, just the checking on their mental health. Could you talk a little bit about that, or what the kind of feedback from that letter way?

Fran Katsoudas: Yeah, I'll start, but you guys feel free to jump in. So Chuck sent out the memo after the deaths of Kate Spade and Anthony Bourdain, and I remember we were on a flight, and post their deaths some of the stats were coming out about how many people suffer from mental health issues, and I remember Chuck said, "Wow, how many people at Cisco at this moment are thinking about ending their lives?" And it was one of those moments, and even as I talk about it, I just remember there was this theme of caring.

                             And we landed in Florida, and the very next morning he sent out that memo, and it was incredibly heartfelt. I remember in the first memo I think he said, like, "No one needs to go it alone." Like, "We're here, and we're a community." We were overwhelmed by the response. I don't think there has been an issue where we received more response from the employee base and there was such gratitude, but the most amazing thing, and I want to share this because I think for us and the work that we do it's important, people sent emails with their stories. People wanted to tell us about their own issues, or about their parents, or their children, and what they were worried about, and it started to embed storytelling into our culture quite a bit.

Ellen McGirt:      So Amy, can I get you back in here? I want to follow-up on the AI conversation too. I know just from my own reporting how concerned people are about bias in algorithms, and it's not just Skynet becoming sentient. I mean, it's how it touches our lives every day.

Amy Chang:       Yeah.

Speaker 1:          How do you think about that, and how do you see Cisco responding to these obvious concerns?

Amy Chang:       Do you know one of the things I love most about Cisco, right?

Ellen McGirt:      Tell us everything.

Amy Chang:       There is a real integrity, right? And a real genuine concern for human beings, and for the wellbeing of our users, and so there isn't an ask to cross that line, which ... I do not feel pressure crossing that line, and I used to run Google Analytics, right? For eight years, I ran Google Analytics at Google, and we would get asked all the time obviously for that data, because it was extremely valuable data to all kinds of parties, and I was always the gatekeeper and the "No" person for sharing that data, because it was our customers' data, and the respect for that is sacrosanct, right? It cannot be violated, it cannot be abused even once, because the second it is, you lose the privilege and the right to serve customers in that way from here on out.

                             And so it's the same thing for the underpinnings of the data for Cognitive Collaboration. There are principles we stick to that we will not violate. One of them is we gather publicly available data, so data that is behind logged-in kind of experiences, data that is not meant to be public we do not touch, and we are very, very careful to adhere to those rules of logged-in versus not kind of membership. Anything that is published, because it's publicly available, should someone decide to shut it off at the source, we no longer use it as well. And any person can come in and specify that they do not want to be part of the platform, and we will respect their wishes right away. So all of those principles are extremely important in creating this kind of data platform.

Ellen McGirt:      So speaking of integrity, we should talk a little bit also about your stand on philanthropy and giving and extra time, so what is that? How is that transforming the company?

Fran Katsoudas: Go ahead.

Irving Tan:          Yeah, sure.

Ellen McGirt:      Jump in.

Irving Tan:          You know, I think it really makes a big difference, because at the heart of our culture also we've had a very strong history around giving back to the communities we operate in, not only in the Americas, but globally as well, and that's something all employees take a significant amount of pride in. And by giving them sort of official time off to actually participate in those activities, it just strengthens the bond not only the employees have with the communities, but also giving them a much stronger sense of purpose of what they as employees of Cisco are actually doing to enrich the lives of their colleagues, but also the communities they live and operate in as well. So it's just been another critical lever in just reinforcing and strengthening the culture that we have.

Ellen McGirt:      Mark, what are some of the issues associated with rolling out something that may be civil rights related, or social justice related, or you know, just some of the things that might be an issue for somebody else in the company?

Mark Chandler: That's a great question, I'd like to just mention something to elaborate on what Irving and Amy were saying though. You know, a couple of years ago we switched the way we do employee philanthropy from a much more centralized approach with supporting a limited number of organizations, to really opening it up to employees to choose the organizations in their communities that they wanted to support, and the result is now that there are thousands of organizations where we do our internal match for, we call it the "Be the Bridge Campaign," because our logo is a bridge, and it's massively increased the total amount of employee giving, the diversity of our giving to different communities around the world, and it was really just a change in mindset that said "Let our employees determine how our corporate philanthropy is going to be directed rather than have it be a centralized decision."

                             Similarly, on the AI question that you asked Amy, you know, I'd say 12 or 13 years ago when people were really first asking questions about some of the human rights implications of the technologies that the internet were bringing to fore, not just data-related, but also process-related, it was a real wake-up call and we started a human rights effort, and now I urge you to go do a search on "Cisco Corporate Social Responsibility Report" and you'll see a really robust human rights discussion, which in the last year we added a significant section raising questions about AI.

                             And that's incredibly important to us, because as 5G technology rolls out and the Internet of Things leads to billions of additional devices being connected that will be transmitting data from us and about us all the time, there are huge implications in the algorithms as you pointed out, and if we don't confront those directly and upfront and we don't involve all our employees in that discussion ... And now they are, every time I speak to a group, I get a question about it because we publicized this. If we don't do that, we're not going to do the right thing for the rest of the world either.

                             You know, sometimes when you do engage in issues, there will be people who will say, "Well, that's not my point of view, I don't feel that way," and we create forums where people can express that and talk about it. It doesn't mean that we aren't going to stand up when we see an issue out there that we need to talk about. But again, if you create an open communication platform where people are not afraid of reprisals because they have a view that's different than some of their peers, in whatever direction, then you drive a culture where you are truly a great place to work.

Ellen McGirt:      See, but this sounds like a lot of work. You know? And as a business reporter, a long-time business reporter, it doesn't feel like cutting corners where you have a command and control, when you have a person who just says "This is where we're going to go, and this is how we're going to do it." This human element seems really hard. How are you training this? You know, particularly for middle management, and Michael knows I'm obsessed with first-time leaders in middle management, because that really is where so much energy and also diversity tends to come to a halt. How are you making sure people are ready to do this incredibly human work?

Fran Katsoudas: Okay, so I want to say it is a lot of work. And what I mean by that is when you believe in this culture that is a bit more decentralized and trusting your people, it means that we all have to be ready as leaders, and for us it means we're trusting our teams a lot more as well. The leadership question is probably one of the most important questions for us, and we've been evolving. We do something annually called Leader Day, where we actually get about 10,000 of our leaders together around the globe. We do this really fun "Follow the Sun" thing where we are the faculty for the event, and we take out leaders through real life experiences.

                             This year we did this gamification sim that was a lot of fun, which is we made every manager one of the leaders of the company, and we had them make decisions around the business, and while they were making decisions they could see the impact at top line and bottom line, and as they were doing this we were giving them some tough questions to answer as leaders. And so they're going through the sim, and then we say, "Hey, your team isn't clear on the strategy. What do you do?" And the responses were kind of fascinating, they had to choose from "I have a one-on-one with the team and we talk through it," "I create a PowerPoint presentation," that was not the answer ...

                             And basically they're answering on the sim, and then we're having conversations around their answers, and so we're mixing it up. The reason that we do it in one 24 hour period is that means that we take leaders offline for a day across the company, and that's a signal to our leaders that this is important, and I think leaders are always looking for signals around what you really value, and that's just one example of what we do.

Ellen McGirt:      And also ... So how do you create other incentives, like aligning compensation to diversity numbers or things like that, without making it feel like a threat?

Fran Katsoudas: Yeah. You know, it's so tricky, and I think we get this question ... Or we ask ourselves this question probably annually around, "Okay, what are you going to measure?" From a Cisco perspective, we are the most diverse Cisco we've ever been, and that's something that we are incredibly proud of. A big part of the shift for us was we had to stop leading with gender, and I know that's a really weird thing to say, but-

Ellen McGirt:      No, no it's not.

Fran Katsoudas: We didn't see progress at Cisco until we started For All, and Michael, this is why I have so much respect for everything that you're doing, because when we said "For All," everyone belonged and everyone felt like they were a priority. It wasn't "Women first, and then we'll get to the other groups next." It's everyone, and that was super important for us, and even at the time it was a decision, but powerful. When we were going through the pay parity work, at that time companies were focused on pay parity from a gender perspective and then from an underrepresented minority perspective. And we said "No, we want to do it for all. Like, that's who we are."

                             And so these are some of the pivots that are important, and so the question for us as leaders is how are we doing in building For All teams? And so we look at things like do we have diverse candidates? Do we have a diverse interviewing panel? That is more powerful than you may think as we go through the process. So those are the things that we're measuring. We're going after the actions.

Ellen McGirt:      So we only have a couple of minutes left, and I just want to hear from everybody as we close, how are you preparing for the Cisco of the next 22 years?

Amy Chang:       Can I actually go back for a second-

Fran Katsoudas: Do whatever you want.

Amy Chang:       To whether this work is hard? You know, having worked at a number of places, I will tell you that our Chief People Officer, sitting over here, and her team, are different. And the caring that she feels for people at every single level of the organization every single day is felt, and there are so many of us who would literally lay down in traffic if she asked, which she never would, and I'd be like, "For how long, Fran? For how long?" But we would, because the heart is there, right? The intent and the heart is there, and I think that shows to our people so, so clearly, and it makes all the difference in the world. It really, really does. Sorry to embarrass [inaudible 00:27:34].

Irving Tan:          Yeah, I think to the question of what are things that we're doing right, we're very focused on within the Operations Group, is really being very transparent and open with our teams on where the business is heading. What does that mean to skills and capabilities and roles that we need for the business to be successful going forward? So the employees actually understand what's needed of them not today, not tomorrow, but what's going to happen two years, three years down the road. And then we're very focused on having the conversation with them, like "What are your aspirations, and how do we help enable you, help you unlearn and re-learn what you need to be relevant to the company, to the business, and to society going forward?" So that's a big area of focus for us, that's where a lot of our energy is going into right now.

Ellen McGirt:      Mark, I'm going to give you the last-

Mark Chandler: I would reinforce that, and say that one of the things people look to a legal department to do is to worry about risk. I firmly believe that in a dynamic environment, which we are certainly in, sometimes the riskiest action you can take is no action, so we have a bias towards figuring out what is going to be happening in six months, in a year, in five years, what do we need to do to be ahead of that? And to do it in a way that's consistent with the culture, and by doing that we re-invent the team frequently and we keep looking forward, and that's a mindset that I think makes a huge difference, and frankly people love it.

Ellen McGirt:      Well, that's a great place to end. Congratulations, it's been a wonderful ride, and I'm looking forward to the next 22 years of Cisco excellence. Thank you everybody.

Fran Katsoudas: Thank you.