Former Cisco CEO John Chambers wants to make America a start-up nation again

https://www.washingtonpost.com/business/2018/09/14/former-cisco-ceo-jo
Former Cisco chief executive John Chambers was interviewed on Bloomberg TV last month. (Michael Short/Bloomberg)
Former Cisco chief executive John Chambers was interviewed on Bloomberg TV last month. (Michael Short/Bloomberg) By Jena McGregor Jena McGregor Reporter covering leadership issues in the headlines Email Bio Follow September 14

The CEO who is well remembered for surviving the dot-com bust — the one who led Cisco Systems, which makes the gear that runs the Internet, for 20 years as it gobbled up 180 companies in acquisitions — has a message for the country. The United States, he says, needs to become a start-up nation again.

In a new book set to be released Sept. 25, John Chambers, who stepped down as Cisco chief executive in 2015 but remained executive chairman until late last year and is now “chairman emeritus,” argues for a comprehensive digital strategy in the United States. In the book, “Connecting the Dots: Lessons for Leadership in a Startup World,” the 69-year-old, who grew up in West Virginia, explains how he reinvented himself and his company over two decades and shares the leadership strategies that made him one of the last CEOs of a major tech company from his generation to step down.

Now a venture capitalist and coach to 12 start-ups, as well as an adviser to government leaders including Indian Prime Minister Narendra Modi and French President Emmanuel Macron, Chambers laments the decline in the number of new U.S. start-ups. (There were 624 U.S. initial public offerings in 1996, compared with 112 IPOs in 2016.) OnLeadership spoke recently with Chambers about his work advising other governments, what the United States is and isn’t doing to encourage more entrepreneurs, the danger of doing the right thing for too long and how his dyslexia has helped him as a leader. The interview below has been edited for length and clarity.

OnLeadership: You point out that the United States is one of the only major developed countries not to have an overarching technology or digital strategy. What would it look like if we had one?

John Chambers: It would be a vision of articulating how a start-up U.S. — and a digital strategy for our country — could grow GDP two to four points faster than we could grow otherwise. That could incrementally create another 20 to 30 million jobs. That could have the per capita income of American citizens — instead of being flat to down — actually increase, just like we saw in the Internet era in the 1990s.

It has to be inclusive across all 50 states. It can’t just be California and New York and Texas. This is what’s occurring. People are realizing they can get left behind. It has to go back to how you change the education system to prepare people for the jobs of the future. It’s how do you get young people — regardless of gender, or color of skin, or religion — excited about being entrepreneurs early on, and not when they get to college. It’s about how do you show people how this can change health care, how it can change the environment. It’s the total package.

It’s got to be owned by the top leader. That’s what you’ve seen [President Emmanuel] Macron do very well in France and what you’ve seen [Prime Minister Narendra] Modi do very well in India. Even though I’ve been close to Democratic and Republican leaders alike, we have not, for a combination of reasons, really had a U.S. leader who said, “I’m willing to bet my future on being able to do this.” That’s what we need.

You’ve said it’s the leader who has to lead these initiatives. How would you grade how the Trump administration is doing on this? Have you advised them?

I have not on that. I think you’ve seen some major positive moves in terms of the economy and tax policy. [For years] I was almost the poster child in Washington on corporate tax change and repatriation and had been on the start-up bandwagon.

But until you have a plan for what you’re going to do for the country and a start-up plan it’s hard to give us good grades. I think there are times when many other countries can learn from America, and there are also times when we can learn from other countries. Don’t let the short-term economy fool any of us. If we don’t get the fundamentals right on digitization and new job creation and inclusiveness across all the states, we’ll leave a lot of people behind.

You mentioned tax policy, but is there a specific thing the Trump administration has done or something you’d like to see them do to jump-start more start-ups?

I view the tax changes and focus on less regulations as a very good start, but it’s just that. We need a vision for what we look like 10 years from now; we need a vision for how this includes all of America. Digitization, artificial intelligence — it will destroy, I don’t know, 20 to 40 percent of the jobs as we know them today. Forty percent of the existing companies won’t exist in a decade. When I started saying that a couple years ago people said, John, that’s not going to happen. They’re now realizing it probably will.

I want to teach how we become a start-up nation again. It’s got to be partnering across government and ignoring politics. In the 1990s, it didn’t matter if we were talking to Republicans or Democrats. People got it.

Would you ever consider running for public office yourself?

I have thought about it, and I made my decision about 14 years ago not to. I have a couple weaknesses. I like to move fast. I like Democrats and Republicans, and I like doing what’s right, period. You don’t survive in politics in today’s world doing that.

The second thing is I love business. [Former Israeli president and prime minister] Shimon Peres said it to me very directly: He said, “John, you can accomplish more as head of Cisco . . . if you go on and do these start-ups than you can in political office.”

I was surprised to see you write about how many CEOs have dyslexia, like yourself. Why do you think that is, and has it helped you as a leader?

The majority of CEOs who have dyslexia won’t tell people they do because it’s viewed as a weakness. I wouldn’t have except by accident — at “Take Your Children to Work Day” [at Cisco] where a young girl with a disability started to cry because she couldn’t get her question out. I walked her through that [by sharing his personal story].

Nobody knew I was dyslexic. I viewed it as a major weakness that I’d learned to overcome. But then I realized that in life, you’re more a product of how you handle your setbacks than your successes. [With dyslexia], you can’t read serially, so you have to take a look and recognize the patterns on the page.

One of the big themes in the book is the problem of people doing the right thing for too long. Tell us about a time you yourself fell prey to that instinct as CEO of Cisco.

I think I should have moved even faster on switching. We were a routing company. Everybody wanted to stay with routers. I would have liked to move quicker on switching. [When he left Cisco] we had 40 or 60 percent market share on switching, so when we moved, we moved aggressively.

Some people — part of the criticism might be fair — would say [that] at times I dreamed too big and tried to do too many things. That was one of the criticisms in 2001. And actually, after thinking about it, I would argue the reverse. I wish I [had] dreamed more and had taken even more risk. I will with these start-ups.

Doing the right thing too long — I got to see that firsthand. West Virginia was on top and then suddenly ended up being toward the bottom. IBM should be the equivalent of Google and Facebook and Intel and Oracle and Cisco combined. They were in that position. and they missed it. And Wang [Laboratories, where Chambers worked in the 1980s] was the top minicomputer company but missed one transition to the Internet and to PCs. and 32,000 people lost their jobs.

You mentioned West Virginia. Tell us more about what you’re doing there.

I plan to announce more before the end of the year. I’ve given to the business schools, and so has my family. What we will be doing now is looking at how do we get West Virginia to be a start-up state, in partnership with West Virginia University. How do you begin to create that environment with business and government and education and citizens working together? We’re going to pilot it with similar concepts to what we’ve seen work in France, other parts of the U.S. and India. My view is: How do we get all 50 states acting like start-up states?

What do you think of President Trump’s promises and efforts to revive the coal industry?

I’m very much a progressive in terms of the future of the state. I think to focus on what you can do — in areas such as effective utilization of coal and clean coal and doing that in an environmentally sound way — is doable. But I’m more interested in what will be the next jobs because there used to be 125,000 people with coal jobs in West Virginia, mining jobs. The number’s a fraction of that now.

We’ve got to get to where the market is going and where the job creation is going. It won’t be these large companies anymore. It will be start-ups.

You have a pretty searing critique of Silicon Valley in the book, saying it “seems a little more inbred and out of touch with the average person in America” and that it’s “becoming less a magnet for top talent.”

Many people in the U.S. now view technology with hesitation — that it’s more likely perhaps to destroy their jobs than to create jobs for them. When Silicon Valley says to somebody in Indiana or Ohio or West Virginia or North Carolina that we’ll give you a stipend if you lose your job [because the job is displaced], they don’t understand how much Americans want a job. They want a job they can be proud of and make a difference in.

Solving these big audacious problems — that’s what the Valley does, and I think it’s important we do it once again. I’m now focused on start-ups not just in Silicon Valley or New York but across the nation. The U.S. isn’t even in the top 10 in innovation in the world, country-wise. I’m surprised the alarm bells aren’t going off everywhere. Why aren’t we number 1? Why are we number 11 in the Bloomberg index?

You were a co-chair in 2008 of John McCain’s presidential campaign. Did you go to his funeral?

I had a chance to go to his funeral, but I’d made a commitment a year ago to my family to be with them in Hawaii, and this is where I made a personal decision [not to go]. But John has been a very good friend for well over 25 years. I think he’s a model of what our political leaders should be. I think the fact that he had a Democratic president and a Republican president talk at his eulogy was classic McCain.

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