Cisco CEO Chuck Robbins on tech regulation, CEO activism, and the best advice he ever got

Straight talk.
Straight talk.
Image: AP Photo/Richard Drew
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A lot changed after Chuck Robbins became the chairman and CEO of Cisco, and not only because Robbins, a longtime Cisco executive, wanted to upend the technology company’s business model. The handover that saw Robbins replace John Chambers in 2015 came at a time of rapid evolution in technology, in attitudes about capitalism, and in employees’ expectations of leadership.

In an onstage interview on Nov. 15 at the EY Strategic Growth Forum US, an annual entrepreneurship conference in Palm Springs, California, the affable Robbins shared his opinions on these and other topics facing many of the business leaders in attendance. Here’s a rundown of what he told the audience:

On overhauling Cisco’s business model, from one that mainly relied on selling networking equipment to one that focused on the recurring revenue from software subscriptions:

“The quarter that ended the day before I took over was a record quarter for Cisco. Then I came in and said, ‘That was nice, and now we’re going to rip the place apart.’ It was just clear to me that the world was moving and we needed to shift quickly. [We had to] embrace every disruption even if it seemed they’d be bad for us. If you can shape [the disruptions], then they don’t hurt you as badly. It was tough. There was a lot of people who looked at me like I was crazy when I told them what we were going to do. … [But] you have to meet your customers where they are and you have to give them solutions they want.”

On the tough job ahead for would-be tech regulators:

“Tech is moving so quickly that I feel badly for the regulators. Can you imagine if that’s not what you do every day, you’re not in it every day, and you have to figure out how to regulate it? … We’re in the middle of data-sovereignty issues, obviously 5G, the trade issues, the Huawei situation (Quartz membership exclusive). But regulating is super important, and it’s an ongoing process. I think somehow we have to figure out how tech builds some trust with government so we can actually work together to figure out [how to proceed].”

On 5G:

“It’s probably one of the most hyped technologies in the world. It will live up to it. If you go back to when we saw the LTE or 4G rollout, that’s around the time that Apple came out with the iPhone … What we don’t know from the consumer side is what are the next applications that will be built [when we have 5G’s capacity]?”

Robbins predicted it would be another 10 years for 5G to redefine the “internet of things” and for new commercial applications to develop. “Then you get data coming in” from those applications, which in turn will feed artificial intelligence and machine learning, he said.

On the trend of CEO activism:

“Our employee base expects me to have an opinion on every issue going on in the world. When we’re all of one mind, that’s an easy thing to do. When it’s ideological and you’re sort of split down the middle [across the employee base], that’s when it becomes a challenge.”

“In Silicon Valley, you see companies whose employees are marching in front of their buildings because they disagree with something that’s going on. Over the last three or four years, with what’s going on in the country and around the world, we’ve had to deal with everything from bathroom bills, immigration, Muslim bans, and separation at the border. And you really have to think through: Which of these issues does the company have an opinion on? And it can’t be my opinion. When it’s clear, whether it’s an ethical issue [where the answer is obvious], we take that position. But then we get into issues where we have employees on each side, where it’s either a political belief or it’s about how you were raised.” In those situations, he said he encourages employees to simply have lunch with someone on the opposite side of the issue. “The reality is that most of the time when we disagree with people, it’s a byproduct of diverse experiences in how we were raised.”

On deciding to openly challenge the Trump administration’s policy of family separations at the US southern border, in part through his leadership of the immigration committee of the Business Roundtable, a CEO lobbying group:

“On that one, most of our employees agreed. … It just seems anti-American. That’s just not who we are as a country.” (The remark drew applause in the ballroom.) “That’s an issue where we took a stand, and candidly if one of my employees said, ‘I really don’t agree with you,’ I’d say, ‘Well, I really don’t care.’”

On what’s driving employees’ demands for activism, and how he’s responded to them:

“Things are moving so quickly now, and work and life is so intertwined. People want to know [about their leaders] who you are as a human being. The business transitions are tough enough, and then all the geopolitical dynamics going on … I said [to my team] we need very frequent, transparent, authentic communication to the company.”

To that end, Robbins when he became CEO instituted monthly, hour-long livestream video meetings with upwards of 30,000 employees. Each call typically involves 30 to 40 minutes spent on business updates, and the remainder of the time is devoted to open Q&A. “I told the company, ‘If it doesn’t put me in jail or put the company at risk, I’ll answer any question.’ And boy, they took me up on it.”

On his advice to other business leaders:

“Be human and be authentic. That’s what people need today more than anything else. The world’s full of too much crap, and they don’t need filtered BS from their leaders. They need real.”

On his advice for building diverse teams:

“My direct reports, in Silicon Valley, we’re 50/50 male-female,” an unusual ratio for a big technology company. He attributed this in large part to the company going beyond insisting on diverse candidate slates and changing its approach to interviewing. “If I have a 50/50 slate [of candidates] and then I have six white men doing the interviewing, guess what I’m going to get?” Diversify the slate and the managers doing the hiring interviews, he advised. “When you do that, then you have to let the best person get the job because it’s disingenuous to do it any other way.”

On making sure white men aren’t excluded from diversity conversations and initiatives:

“I have 12 reports—six are men, six are women. We have 77,000 employees, and probably 75% of them work for the female leaders in the organization, so these are real, substantive jobs. We did the pay parity things a few years ago but we didn’t do it just for gender. We spent $4 million or $5 million building this tool that analyzes [salaries], that goes through all this data to find anyone who is not being paid appropriately to their peers [including white men], and then we uplift them.”

That decision, he said, is a reflection of his embrace of what he called “full-spectrum diversity.” To illustrate the idea, he mentioned a hiring-related program recently brought to him by an outside firm. He loved the program but said he was told by the firm that “it’s only available to diverse candidates. And I said, ‘What does that mean?’ They basically said, ‘Anybody except for white males.’ And then they said, ‘Unless he’s gay.’ So I said, ‘You want me to build a program that specifically and explicitly excludes someone at a time when we’re talking about inclusion?” He didn’t purchase the program.

On the future of capitalism:

“I believe in capitalism, but I think that the way things are working right now, it’s broken. There’s too many people that aren’t participating. It’s about opportunity, and we have to figure out how we fundamentally solve this problem. … If you naively believe that we don’t need to prop some people up for awhile, well, I believe that’s wrong. I think it’s a public-private partnership that needs to be done; I think it’s government with business, not government [doing things]to business. … In the Valley right now, we’re quietly putting together a consortium of companies. … We’re coming together formally to tackle hunger, housing and homelessness, and education. [Inequality] is the problem of our time.

On the best advice he’s ever gotten:

“The first time in my career [that] I was competing to become a first-line sales manager and I didn’t get the job, as soon as I was told I didn’t get the job, the head of the US operation called me. It was orchestrated big-time. He said, ‘Sorry it didn’t work out.’ But he said, ‘People are going to learn more about your character in the next 24 hours than they would have learned if you had gotten the job.'”

The advice stuck with him; Robbins said it’s why he didn’t cancel his usual quarterly CNBC appearance after a recent earnings miss. “You could argue whether we should [go on CNBC] every quarter, but we do it every quarter, so I was like, ‘What, I’m not going to show up when it’s bad?'”

On the value of simplicity, whether in PowerPoint presentations or in the power of the humble thank-you note:

“I think we overcomplicate things. I think everybody wants to come up with some complicated strategy, some complicated plan, because it makes people feel smarter. I just think right now we need more focus on the basics. We used to have a thing at Cisco where the more complicated your PowerPoint was, the smarter you must be. And now we have a whole simplicity thing going on.”

His advice to other business leaders searching for simplicity? “Focus on the simple things every day. Write handwritten notes. I still write a bunch every week. I mean, nobody writes handwritten notes, and men definitely don’t write handwritten notes.” But he said that when they do, or when anyone does, the intention is well-received and the effect on the recipient can be powerful.