Yahoo Finance Cisco appoints lifelong sales guy to replace Chambers as CEO
What was it Steve Jobs used to say about why tech companies decline? That’s right, it’s when the sales guys start running the company.
That may explain why investors are showing so little enthusiasm over Chuck Robbins, named the new CEO of Cisco Systems (CSCO) today replacing John Chambers starting in late July. The shares are up less than 0.5% at midday. By contrast, Microsoft (MSFT) shares jumped 7% on Aug. 23, 2013, after Steve Ballmer said he would retire.
While Robbins isn’t quite Steve Ballmer, the target of Jobs’ digs back in that 2011 "60 Minutes" interview, he is the enthusiastic senior vice president in charge of Cisco’s field operations, which covers the internal sales teams as well as relations with the company’s vast network of third-party sellers.
The 49-year-old has spent almost two decades rising through the ranks of Cisco’s sales side without garnering much attention. After starting his career as an applications developer at a big bank in North Carolina that eventually morphed into Bank of America, it’s been sales all the way for Robbins, who joined Cisco at the end of 1997.
Robbins may be most known for his all-out efforts to beat Hewlett-Packard (HPQ) at the network equipment game. “Refuse to lose” was reportedly his mantra with Cisco’s third-party resellers at a conference in 2009. "I am your personal deals desk," he told the group.
That kind of all-out effort works wonders when a company has a product line-up that beats the competition. Cisco’s current challenges may be more on the innovation and development side, however, as upstarts try to woo away its customers with cheaper solutions based on open-source software.
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Cisco's board said Robbins was a unanimous pick after an exhaustive search that included internal and external candidates. "Taken together, his authentic leadership, cultural fit, technical acumen, and vision for Cisco, set Chuck apart from the balance of the candidates, both externally and internally," board member Rob McGeary wrote in a blog post about the selection process.
On first blush, analysts considered the appointment a safe, if somewhat boring, pick. “We don’t believe the appointment is entirely a surprise nor changes Cisco’s course of action dramatically at this stage,” UBS analyst Amitabh Passi said in a note immediately after the announcement.
Robbins beat out a cast of seemingly thousands of candidates who have recently, or in some cases not-so-recently, been considered the front runner to replace Chambers. The runners-up included President and Chief Operating Officer Gary Moore, Chief Technology Officer Padmasree Warrior and President of Development Rob Lloyd. Appointing Padmasree would have strengthened the trend of women taking the top role at big tech companies, after Ginni Rometty at IBM (IBM), Meg Whitman at HP, Marissa Mayer at Yahoo (YHOO) (Yahoo Finance's parent company), and Safra Catz, co-CEO at Oracle (ORCL).
But Padmasree and other top Cisco execs were just the current internal candidates. Other top talent already abandoned ship, unable to wait out Chambers’ decision to step aside. Former strategy chief Ned Hooper left in 2012, following chief marketing officer Susan Bostrom, who departed the year before. Chambers’ former No. 2, Charlie Giancarlo, left for the world of private equity back in 2008, shortly after product guru Mike Volpi left.
Chambers ascended to CEO in 1995 and has overseen phenomenal growth, as the little network switch maker found itself positioned perfectly for the coming Internet wave. And when it was lacking in a hot emerging area, Chambers was quick to acquire a smaller foe selling the appropriate gear. More recently, not every deal has worked out so well (the $590 million purchase of consumer camera maker Flip was a disaster, for example) and the company has had a much more difficult time finding growth. Chambers was forced to lay off 14% of the workforce, some 11,500 people, in 2011.
