Connecting the Dots: Leadership Lessons in a Start-up World

Connecting the Dots: Leadership Lessons in a Start-up World John Chambers Legendary Silicon Valley visionary and one of the world's greatest business leaders, John Chambers shares the playbook and philosophy that transformed Cisco into a global tech titan and now inspire a new generation of leaders. With numerous start-ups moving from zero to a billion to bankruptcy in a matter of years, it’s clear that sustaining a business in the digital age is no walk in the park. Over 20 years, John Chambers transformed a company with 400 employees and one toaster-sized product (a router) into a tech giant that's the backbone of the Internet. Along the way, he's outlasted and outmaneuvered practically every rival that ever tried to take Cisco on-Nortel, Lucent, Alcatel, IBM, Dell, and Hewlett-Packard, to name a few-and turned more than 10,000 employees into millionaires, more than any company in history. When Chambers stepped down as executive chairman in December of 2017, he left a company that didn't just shape the first Internet era but is leading the next wave of innovation in areas from cyber-security to self-driving cars. Now, in collaboration with award-winning journalist Diane Brady, Chambers shares the stories and strategies that helped his company win again and again through multiple market shifts. Posing a unique mode of thought proven to attain success, the message of this book is clear; it is not the biggest or the richest players who win, but the ones who are able to stay ahead of the trend by connecting the dots. Both enlightening and practical, this is essential reading to inspire a new generation of leaders. Copyright (#u619fc447-1b55-5315-b003-e71858c6f92f) HarperCollinsPublishers 1 London Bridge Street London SE1 9GF www.harpercollins.co.uk (http://www.harpercollins.co.uk) First published in the US by Hachette Books 2018 This UK edition published by HarperCollinsPublishers 2018 FIRST EDITION © John Chambers 2018 Cover layout design © HarperCollinsPublishers Ltd 2018 A catalogue record of this book is available from the British Library John Chambers asserts the moral right to be identified as the author of this work All rights reserved under International and Pan-American Copyright Conventions. By payment of the required fees, you have been granted the nonexclusive, non-transferable right to access and read the text of this e-book on screen. No part of this text may be reproduced, transmitted, downloaded, decompiled, reverse engineered, or stored in or introduced into any information storage retrieval system, in any form or by any means, whether electronic or mechanical, now known or hereinafter invented, without the express written permission of HarperCollins e-books. Find out about HarperCollins and the environment at www.harpercollins.co.uk/green (http://www.harpercollins.co.uk/green) Source ISBN: 9780008297039 Ebook Edition © October 2018 ISBN: 9780008297060 Version 2018-09-13 Cover (#u19898b68-420e-5d85-8711-2c453972bbc3) Title Page (#u88701718-5032-50ed-9f8b-56cdd68ad809) Copyright (#u16f9b407-ebbb-583d-8873-863b68161303) Dedication (#ud96311fe-13eb-5b2d-92ef-1c651194d891) Introduction (#u94651889-aec6-5e8b-8441-06a9d56455bb) I The Connected Leader (The Mindset for Leadership Success) (#ub12e86f0-17e2-52ea-9c8d-6fa38be2bee2) Chapter One The Lessons of West Virginia (Disrupt, or Be Disrupted) (#u5c80dd3d-18cf-52a3-bc14-35ebe6acabb3) Chapter Two Act Like a Teenager and Think Like a Dyslexic (How to Spot Market Transitions) (#u65300b51-bf69-5366-a13c-031886383081) Chapter Three Dream Big and Be Bold…Focus on the Outcome (Play out the Entire Chess Game Before You Make the First Move) (#ub1280e29-f2d6-55be-8d55-b6d226914811) II The Connected Company (The Playbook for Corporate Success) (#litres_trial_promo) Chapter Four Embrace Your Purpose, Not Your Products (How Cisco Beat Its Competitors) (#litres_trial_promo) Chapter Five After Disaster Strikes (Setbacks Can Make You Stronger) (#litres_trial_promo) Chapter Six My Buyer’s Guide to Successful Acquisitions (Based on 180 Personal Experiences) (#litres_trial_promo) III Connecting with Customers (The Playbook for Shared Success) (#litres_trial_promo) Chapter Seven Build Relationships for Life (Sell People Only What They Need) (#litres_trial_promo) Chapter Eight How to Build a Winning Team (Focus on Culture, Diversity, and Results) (#litres_trial_promo) Chapter Nine Get Your Message Out (With or Without the Media) (#litres_trial_promo) IV Connecting Beyond Borders (The Playbook for a Startup World) (#litres_trial_promo) Chapter Ten Bet on Innovative Leadership (How to Partner with Great Leaders) (#litres_trial_promo) Chapter Eleven What Entrepreneurs Want to Know (13 Typical Questions) (#litres_trial_promo) Chapter Twelve It’s All About Startups, Startup Nations, and a Startup World (My Next Chapter and Changing the World…JC2 Ventures) (#litres_trial_promo) Chapter Thirteen Reinvent Yourself (What’s Next for Me—and All of Us) (#litres_trial_promo) Acknowledgments (#litres_trial_promo) Praise for Connecting the Dots (#litres_trial_promo) List of Searchable Terms (#litres_trial_promo) About the Publisher (#litres_trial_promo) To my family: For Jack and June Chambers, whose lessons shaped me For Elaine, whose love sustains me For John and Lindsay, who inspire me For Autumn and Jack, who fill me with joy And for the people who’ve become family along the way, from my daughter-in-law Ashley to the employees of Cisco and the startups in JC2. I’ve learned so much and love you all. —John INTRODUCTION (#u619fc447-1b55-5315-b003-e71858c6f92f) I used to think the best time to have a book about yourself is after you’re dead. I don’t like to sing my own praises and I’m all too aware of my weaknesses. I also know that anything I have accomplished in my life, from overcoming dyslexia to building Cisco, has been because of the team of people around me. For 20 years, I had the incredible privilege to lead a company that connected people to the internet and changed the way we work, live, play, and learn. I view myself as a coach, as someone who builds great teams, and as an adviser. I love to teach. What changed my mind about writing a book wasn’t so much the lessons of the past as the opportunities of the future. We’re on the cusp of a revolution that will take the impact of the internet and not only multiply it but play out faster than any disruption we’ve ever seen. Within a decade, some 500 billion cars, fridges, phones, robots, and other devices will likely be communicating online. As an investor and adviser to startups worldwide, I’m incredibly excited by the potential for new technologies to foster longer lives, safer communities, and greater global prosperity, as well as to create hundreds of millions of new jobs. But I also now understand the fears because this disruption will be so brutal that 40-plus percent of businesses today won’t be here 10 years from now. We’re already seeing that impact start to play out in political movements, job losses, and broken business models. Meanwhile, the people at the forefront of this change often seem tone-deaf to the downside of this disruption and unaware of the risks that they face. A good friend once told me that you can’t describe a company or a leader as “great” until they have gone through a near-death experience and come back. Steve Jobs did it with Apple, as did Jack Welch at GE. In 2000, Cisco was the most valuable company on the planet. We had grown 65 percent every year for a decade and I was treated as a Silicon Valley celebrity, complete with paparazzi following me home from restaurants and praise in the media as America’s “best boss” and “top CEO.” A year later, after the dot-com crash had wiped out a quarter of our customers and 80 percent of our stock price, my face was in the media for a much different reason. We survived that crisis and five other downturns that could have killed our business, as it did many of our competitors. We learned how to reinvent ourselves again and again. That ability to reinvent not only your company but yourself is the critical skill for every leader in the digital age. It doesn’t matter if you are leading a company of 2 people or 200,000 people: You have to learn to be fast, flexible, and ahead of the curve. What really set us apart at Cisco were four key strengths: an ability to anticipate and get ahead of market transitions, innovation processes that could be replicated at scale, a strong culture that was focused on customers, and a network architecture that gave us incredible flexibility to innovate and move into new markets. None of these things happened because of dumb luck or the boss’s winning personality. These practices start with some of the fundamental values and lessons that I learned from my family while growing up in West Virginia. They incorporate what I have learned from many great leaders both inside and outside Cisco, and they’ve been honed through practice and some pain. I watched my first two employers, IBM and Wang, go from being giants in the industry to failing, and learned why. You have to compete in the moment but also rise above the short-term wins or problems to think 3, 5, and even 10 years out to pursue bigger and bolder dreams. At Cisco, we were sometimes too early or we took on too much, but the reason we ultimately stayed on top is that we focused on connecting the dots. We developed a playbook for everything from how we acquired companies to how we managed people, how we dealt with customers to how we digitized countries. Far from slowing us down, these tools allowed us to reinvent the company toward where the world is going instead of where it is today. It’s a powerful skill set that can make any team unbeatable. Whenever I learn something that’s really powerful in my life, I want to pass it along. I’ve had the opportunity to share a number of these lessons with others and I have seen how they work again and again across a range of situations. That’s why I’m writing this book. The opportunities over the next few decades will be staggering. Every person on the planet has the potential to compete. The average seller on eBay does business in seven countries. With digitization, anyone can innovate and leapfrog the competition at a scale and speed that’s unprecedented. There’s no entitlement, not even for Silicon Valley. I’m now working with entrepreneurs and leaders in the United States, India, France, and other parts of the world who could lead the next great wave of innovation. Through JC2 Ventures, I am investing in and working with startups to help them scale to become the next Cisco. Some of them won’t make it, but I believe that many of them will, creating jobs and opportunities far beyond the scope of anything we can picture right now. What will differentiate the winners from the losers won’t be technology or capital but leadership and a willingness to learn. The lessons and practices that helped me are proving to be powerful for many of the people I coach. As an adviser to President Emmanuel Macron of France and Prime Minister Narendra Modi of India, I’ve seen how visionary political leaders can transform their countries into startup nations. At JC2 Ventures, a company I co-founded to invest in startups and help leaders scale, I’ve seen how the playbooks I used at Cisco can work in businesses as diverse as cricket farming and drone security. Candidly, I get more credit than I deserve. My success is due to the incredible passion, discipline, innovation, and teamwork of Cisco’s people. Every CEO likes to say that. In my case, it’s definitely true. I’ve worked with many generations of chief financial officers, sales leaders, engineering heads, and other leaders who knew far more about their areas than I ever could. I was lucky to have the most brilliant engineers in Silicon Valley work with me to build products that really changed the game, and I had a job that allowed me to interact with leaders worldwide who inspired me with their vision and taught me how to lead. Most important, I have had Elaine, my best friend and wife for more than 45 years, and our two children—Lindsay and John. They have inspired me, supported me, and put up with my foibles and the frustration of a family member whose passion for the job never turns off. My immediate family treated the people of Cisco as part of our extended family, which reinforced a culture that’s hard to capture in the pages of a book. A lot of people have come to me over the years, asking me what I’ve learned from my successes and mistakes. One thing I’ve learned is that talking about success is way more fun! The other is that making those mistakes made me stronger. But they don’t make you stronger if you keep doing the same thing instead of adapting to a new reality. The setbacks and the tough times should force you to take stock in your strengths and find new ways to win. When I look back on the incredible competitors who later disappeared, I realize that most of them didn’t fail because they suddenly did the wrong thing. They failed because they kept doing the right thing for too long. The biggest mistake we all make is that we get comfortable and we get disrupted because we don’t disrupt ourselves. I don’t have all the answers and I expect that many of you will disagree with some of the things that I write in this book. In fact, if you agree with everything I say, I will have failed. I like to take risks and I like to challenge the status quo. I hope you find some inspiration or useful tips from my experiences, especially the mistakes. If our paths cross on our journeys, I look forward to learning from you. I (#u619fc447-1b55-5315-b003-e71858c6f92f) THE CONNECTED LEADER (THE MINDSET FOR LEADERSHIP SUCCESS) (#u619fc447-1b55-5315-b003-e71858c6f92f) Chapter One (#u619fc447-1b55-5315-b003-e71858c6f92f) THE LESSONS OF WEST VIRGINIA (#u619fc447-1b55-5315-b003-e71858c6f92f) (Disrupt, or Be Disrupted) (#u619fc447-1b55-5315-b003-e71858c6f92f) I’ll never forget the day I almost drowned. I was about six years old and my dad had taken me bass fishing at Elk River near our home in West Virginia, when I lost my footing on a rock and fell in. As I was pulled under by the current and dragged into the rapids, all I could hear was my dad shouting, “Hold on to the fishing pole!” It wasn’t an especially nice pole, but Dad clearly wanted me to protect it. Every time I came to the surface, sputtering water, I’d see him running beside me on shore, repeating those same instructions: “Hold on to that pole.” Not wanting to disappoint my dad, I tightened my grip and could think of nothing else but the pole. Finally, we got to a spot where Dad swam out and pulled me out of the rapids, pole and all. We sat for a few minutes to talk about what happened. My dad was a great teacher, who always explained the thinking behind why he did things. He wasn’t angry that I’d gone too far on the rock and fallen in. Accidents happen. He wanted me to know why it was so important that I held on to the pole. As long as I stayed focused on doing that, he explained, I was less likely to panic and fight to get out of the water, which is one of the worst things you can do when you’re trapped in rapids. You have to go with the flow and look for opportunities to get out. I was too young to get myself out, so his goal was to help me manage my fear until he could find a place to rescue me. You couldn’t stop the fear; you just had to manage it. After we talked, my dad put me back in the water to swim near the area where he’d pulled me out and then we went back to fishing where we were. It was a lesson that stayed with me my whole life and one that was reinforced a little over a decade later, when I went with my youngest sister Patty to a viewing of one of her friends. He’d apparently drowned in the exact same spot where I’d fallen in the river at the age of 6, only he was probably about 14 at the time. As I walked by the coffin, I was struck by how much he looked like me. I remember his face like it was yesterday. He would have been much stronger than I’d been at 6 and certainly a lot more savvy about how to get himself out of the rapids. I don’t know the exact circumstances of his death, but I suspect he died because he panicked. Nobody was there to remind him to hold on to the pole. The importance of staying calm under pressure was reinforced by both my parents when I was growing up. I suspect the fact that they were both doctors came into play. I was a kid who liked to race bikes, jump off bridges, take up dares, and chase down adventures wherever I could find them. I’ll never forget running home after colliding with a metal pipe near the same river where I almost drowned. I had to run half a mile with blood gushing from my head. As I came in, literally dripping with blood, sweat, and tears, my mom put her hand on my head and told me I only had a puncture wound. “It probably won’t require any stitches,” she said. “You’ll be fine.” With some soap and water, a bandage, and a hug, I was probably sent back out the door. If any of you have parents in the medical profession, my mom’s reaction might sound familiar. When you deal every day with people who are injured, sick, and often scared, you learn the importance of staying calm. Panicking over symptoms does not help you diagnose the disease. As a result, I’m usually at my calmest in a crisis. To this day, when a friend, a startup, or even a competitor has a problem, they’ll often call me up to ask for advice because they know that I’ll help them separate emotion from the facts in deciding on next steps. My two sisters are the same way. What I learned at Elk River has been critical in helping me stay focused and calm through crises such as the 2001 dot-com crash. That wasn’t a raging river but what I described at the time as a “100-year flood,” a stock market plunge that wiped out a quarter of our customers and 80 percent of our stock price. Many of our competitors died and, to be frank, I would describe that time as a near-death experience for Cisco as well. That said, I never worried that we wouldn’t make it. Not once. People find that hard to believe, but it’s true. Don’t get me wrong, the layoffs we had to do haunted me and I still cringe when I think of some of the headlines. I made some mistakes, but I never doubted that we’d make it. I believed that our fundamental strategy was right and I held on to that pole the entire time. I knew if we focused on what we needed to do, we wouldn’t drown. I’d learned that lesson in West Virginia. Most people associate me with Silicon Valley, where I was at Cisco for 27 years. I still live in that part of California and find it’s an energizing and special place to be. Still, nothing can match the heartache and the hope that I feel for my home state. West Virginia is a place that a lot of people hear about but very few people actually know. Some might know of its beautiful scenery, rich history, coal mines, and hardworking, friendly people. Others associate it with hillbillies and communities torn apart by addiction and the despair of chronic unemployment. Like everywhere else, it’s a place that’s been dealt winning and losing hands over the years. We’ve all heard about the problems afflicting West Virginia, from the long-term decline of coal mining and lack of industry in once-vibrant industrial towns to low education rates and high addiction rates that some blame, in part, on the injuries that come with manual labor. I grew up in a suburb of Charleston, but in some ways my first hometown was Ravenswood, West Virginia. It’s about an hour north of Charleston, where Sandy Creek meets the Ohio River, built on land that was once owned by George Washington. The then-future U.S. president chose the property in 1770 as part of his compensation for having helped the British win the French and Indian War. While he took note of the area’s rich soil and abundant wildlife in his journal, what he really liked was its location at the intersection of two waterways. Every day, pioneer families were loading their possessions onto flatboats and making one-way trips down the Ohio River to find new homes out West. It wouldn’t take much, in Washington’s view, to turn this 2,500-acre piece of land into a profitable hub for settlers heading to a new frontier. He was right, in 1770. Washington didn’t get a chance to develop the area. He soon had his hands full with leading the American Revolution and becoming the nation’s first president. By the time his descendants got around to building there a generation later, the market had moved on, and the opportunity that Washington identified had gone with it. The land around the Ohio River Valley was settled and pioneers were pushing farther West by rail or road, neither of which connected to what became the city of Ravenswood in 1852. If Washington had created a place to stop for provisions along the river, Ravenswood might have been well positioned to become a transportation hub. Instead, developers bypassed it, extending their rail lines and roads through nearby towns. When it comes to getting market transitions right, timing is everything. By the time I got there in 1949, Ravenswood was a quiet community of 1,175 people. Its natural beauty hadn’t diminished since Washington first set eyes on it. As a land of opportunity, though, it fell short. Many of the residents were older and getting close to retirement, including Walt and Myrtle Ritchie, and Pierce and Lenora Chambers. I knew them as Grandpa Bood, Grandma Myrtle, Grandpa Pierce, and Grandma Lenora. The two couples lived about three blocks apart, which was very convenient for shuttling a baby back and forth. That baby was me. Both my parents were in medical school at Cleveland’s Case Western Reserve University when I was born, so my grandparents took care of me in West Virginia for a period of time to let mom and dad finish their studies. If they hadn’t stepped up, I could have derailed my mom’s career before it even started. For a lot of young women after World War II, having a baby put an immediate end to any hope of having a career. The ads that had encouraged women to work in factories during the war were being replaced with the message that they should give those jobs back to the men and go home to raise kids. My mom wanted to raise kids but she also wanted to be a doctor, and my grandparents supported that dream. They’d all gone to college in West Virginia. In fact, through four generations, every single member of my family has earned a college degree, including every aunt, uncle, and cousin. It was understood by each member of my family that after high school, you’d go on to college and get a degree. My sisters and I never questioned that we’d do the same. You’ll find Democrats and Republicans in my family, along with vegetarians and meat-eaters, and plenty of other differences that can spark a fun debate, but there are two things that all of us share to our core: a deep love of West Virginia and an unwavering belief in the power of education. We were taught that your best weapon in life is your brain, so you’d better sharpen it. Education was the great equalizer. You didn’t have to be born into privilege to get the skills to compete, and no amount of privilege would help you if you didn’t invest in building your skills. How you’d use those skills would depend on what the market needed. An education gave you something that no one could take away: flexibility to do what you want and the process for continuous learning. That philosophy shaped how my family responded to the ebb and flow of West Virginia’s fortunes, and it would also shape how I ran Cisco. Education enabled my grandparents and their children to move from a contracting industry to a growing one. My family didn’t work in the coal mines that came to dominate West Virginia’s economy, though I knew a number of people who did. Instead, Grandpa Bood built a successful road construction company while Grandpa Pierce ran a bank. Grandma Myrtle and Grandma Lenora were both active in the community and pushed to improve education throughout the state. I learned early on that to have transformative change, groups had to come together, whether it was government and business or workers and managers. You had to find common ground and shared goals to get things done. I can still vividly remember the exciting, emotional debates that would occur around my grandparents’ and parents’ dinner tables when they discussed how education must change to create the skills needed for the jobs of the future. There was also, as you would expect, a healthy give-and-take about which political party was best equipped to do this. But the key takeaway was always that government and business leaders must work together to position the nation, state, or county for the future. I have said many times before that the two greatest equalizers in life are education and the internet. I believe that now more than ever. It is why, over the last 25 years, one of the ways I have tried to give back is to help spur this discussion with government and business leaders that the current education system is letting us down and will continue to do so. The K-12 system in the United States is broken and in need of dramatic repairs. I believe that, regardless of political party association, once again government, business, and community leaders must come together and have the courage to reinvent education for a new era, or future generations will pay a steep price. This was true in West Virginia but now it’s true across our entire country. I’m lucky to come from a family of optimists. I never heard my grandparents complain. Even in tough times, they talked about opportunities and were motivated by curiosity, the excitement of a challenge, and a desire to help. My mom and dad acquired those values and passed them to us. They’d been married 57 years by the time mom died of Alzheimer’s in 2005. They didn’t just love each other; they respected and supported each other’s dreams and aspirations, too. My dad was an obstetrician and an entrepreneur who delivered 6,000 babies over the course of his career, about a fourth of them for free. He worked all hours while my mom kept a more regular schedule as an internist and psychiatrist. My sisters, Patty and Cindy, and I were all expected to work hard, treat others like family, and never stop learning about the world. For a lot of families in West Virginia, education was something you did through the end of high school. You didn’t need a college degree to make a decent living in the coal mines or in a chemical plant. You’d learn on the job. While the benefit of spending four years in college might not be clear to families who’d worked for generations in the mines, the cost in tuition fees and lost wages sure was. For a lot of them, that kind of investment just didn’t make sense. It’s an understandable economic calculation and one reason West Virginia still has the lowest percentage of college graduates of any state in the nation. The people were ambitious and hardworking. They’d just tied themselves to one way of making a living. Things change—that is the only real constant in life after all. Ravenswood didn’t remain a sleepy little haven. Soon after I arrived on the scene, in fact, the town tripled in size. I’m all about driving growth, but I can’t claim any credit for this! I was about five years old when two major events hit Ravenswood: a state road that had stopped 30 miles short of town was finally extended and a shipbuilding industrialist named Henry J. Kaiser decided to build the world’s largest aluminum refinery about six miles away. All of a sudden, our quiet community became a boomtown. With jobs and development came new families and kids and bulldozers and buildings. Ravenswood needed traffic lights, roads, sewers, homes, services, and bigger schools right away. Grandpa Bood stepped up to meet some of those needs for new roads while Grandpa Pierce helped with financing and planning for an unprecedented degree of disruption. The downtown became the “old town,” and new development was built around it. Kaiser Aluminum built the new elementary school and leased it to Ravenswood for a dollar a year. Everything seemed to be happening at once. For a kid, riding your bike past rows of trucks and bulldozers was exciting. It felt like the future. I loved it. For people who’d lived in Ravenswood their whole lives, it must have been a shock. When Kaiser Aluminum and Chemical Corporation opened its plant in Ravenswood in 1957, it was hailed as a state-of-the-art facility that would help transform the state of West Virginia. It certainly altered the landscape and created a lot of jobs. But Kaiser’s glory days lasted barely a generation. About two dozen years after it opened, Kaiser shut down the last of its aluminum production lines as demand for aluminum cans slowed. It eventually sold the facility to Century Aluminum, which idled the plant in 2009 before permanently closing it in July 2015. Among other things, the company blamed cheap aluminum imports from China. As production moved to lower-cost centers, the company struggled to reinvent itself, to develop new talent and areas of expertise. Not only was the company reeling but also the community that had sustained it. Without a major commitment to innovate and train people for a new era, Ravenswood got left behind. People moved away. Businesses closed. Once again, the town grew quiet and starved for opportunities. As the coal industry faded amid competition and a switch to new forms of energy, that pattern would be repeated in towns across the state. I wanted to stay in West Virginia when I graduated. Instead, for West Virginians like me and a vivacious speech pathology major named Elaine Prater who stole my heart in high school, the opportunities had dried up. After two years at Duke University in engineering and then completing an undergraduate degree and law degree from West Virginia University, I married Elaine and moved on to get an MBA from Indiana University. We never moved back. I still feel a little wistful when I think about it. My sisters and their husbands also moved away after college. One brother-in-law, Gary Park, runs a large hospital system in North Carolina and my sister Cindy builds houses there. My other brother-in-law, Vince Anido, has been CEO of multiple successful pharmaceutical companies and lives in Florida with my other sister, Patty. I think all of us would have stayed in West Virginia in a heartbeat if the opportunities had been there. My state used to be a land of opportunity. After my brief early stint in Ravenswood, I grew up in Kanawha City, a middle-class neighborhood just across the river from downtown Charleston. In the 1950s, West Virginia’s Kanawha River Valley was the chemical center of the country, if not the world. It was home to companies like Union Carbide, Dow, Monsanto, and DuPont, a place that attracted brilliant chemists and engineers from everywhere in the world. If you were in Kanawha City or Charleston back then, you felt like you were sitting in the engine room of the next industrial revolution. We were producing the fuels, the cutting-edge polymers, the disease-resistant seeds, and many of the other materials that an optimistic and fast-growing nation was hungry to consume. West Virginia was on the cutting edge of change. You couldn’t imagine a day when that would change. But the same pattern that had played out in Ravenswood almost 200 years ago played out in Charleston. The market shifted and West Virginia was left behind. What I learned from witnessing the shift in West Virginia’s fortunes wasn’t so much the challenge of dealing with a downturn but the perils of success. The state fed the world’s appetite for chemicals and coal for so long that it failed to recognize when its recipe for winning would no longer work. We did the right thing for too long. New competitors were coming along to beat us in many of the areas where we thought we were untouchable. As our resources were depleted, it became easier and cheaper to mine coal in western states than in West Virginia. Owners started to use machines that resulted in fewer injuries from mine accidents but also fewer jobs. Meanwhile, energy alternatives like natural gas, solar power, and wind became more feasible and therefore more popular. Antipollution regulations that targeted carbon emissions didn’t help matters much. What also killed those industries were the unions that fought to protect old jobs instead of working with companies to create new ones. Don’t get me wrong. I admire what John L. Lewis did to improve working conditions and pay as head of United Mine Workers in the 1930s. The union served a very important purpose. People were being mistreated. However, over time, union leaders lost sight of the bigger picture and became inflexible about protecting jobs, only to watch them disappear. Much like the businesses they fought, unions struggled to reinvent themselves to stay relevant. Individually, none of these trends came as a surprise. Each of them has been discussed and debated for years. Some factors were blown out of proportion; others were underestimated. Together, they pointed to an outcome for West Virginia that was clear and inevitable. My brother-in-law Jeff Prater got a college degree in mining engineering and technology but then moved on to a different field for the reasons we discussed. The coal industry wasn’t coming back, nor were the aluminum and chemical industries—at least in their current form. Instead of facing that harsh reality and investing in new areas to adapt to it, as my brother-in-law did, a lot of leaders doubled down on a losing bet. They focused on trying to save old jobs instead of creating new ones. They blamed our hardship on outsiders instead of those who seemed determined to maintain an unsustainable status quo. These leaders gave false hope to good people who had worked hard, only to find they could no longer make a living. Instead of trying to stoke excitement and a shared commitment to prepare for a different future, they became wistful for the past. I can’t blame them. Government leaders are usually not rewarded for taking major political, economic, and social risks. Company leaders confronted a lot of challenges. There are no easy fixes for West Virginia, just as there are no easy fixes for the industries and communities being disrupted by technology today. At the same time, I wouldn’t bet against my home state. In fact, I’m betting on it. If your car is ever stuck in a ditch and you must look for help in the middle of the night, I hope you happen to be in West Virginia. Knock on any door and I bet you’ll find someone who will welcome you in, fix you up a hot meal, and get you out and on your way in no time. If we come together to invest in startups, innovation, skills training, and digitization, there’s no reason why West Virginia can’t rise again. Knowing the warmth, loyalty, and resilience of its people, I think the state can develop new centers of excellence and reinvigorate coal country in other ways. The key to this will be strong leadership from the public and private sectors and from educational institutions like West Virginia University, where I am sharing my time, money, and ideas to help develop the programs, partnerships, and people we need to nurture a startup culture. New technologies will transform everything from healthcare to tourism. With a strong vision for what’s possible, reasons to believe, and resources to help train and move people forward, the opportunities are there. The conditions for entrepreneurship are not limited to Silicon Valley. In fact, I believe Silicon Valley has become somewhat insular and risks getting left behind as entrepreneurs create new industries on the other side of the country, as well as the other side of the world. The strategy that will enable West Virginia to come back, that enabled Cisco to come back in 2001, and that has helped me navigate every market transition is one that I first learned from my parents, Jack and June Chambers. As doctors, they taught us the importance of distinguishing between the symptoms and the disease, to look at the whole patient. The visible condition of any one person, company, state, industry, or country is always a symptom of a deeper issue. To address the real problem, you have to investigate the specific underlying issues and learn to step back to see the patterns and trends that point to the big picture. In short, you need to connect the dots. I saw my dad take that approach in medicine, in business, and in life. Dad had this unusual combination of skills and instincts that enabled him to spot the opportunities amid disruption. Along with being an extremely successful doctor, he was a successful entrepreneur. Some of my earliest and most profound lessons in business came from watching how he capitalized on disruptive trends that some of his peers railed against. He constantly taught my sisters and me to look for signs that things were changing and think about how those shifts would play out in 5, 10, even 15 years or more. With that kind of mindset, my dad saw opportunities everywhere. When the interstate highway system was first constructed in the late 1950s, he was excited by its potential for Charleston. While other business leaders pushed for the highway to be built outside the city to reduce traffic congestion, my dad argued that connecting its major arteries inside the city could make Charleston an engine of growth for the whole state. He was right. When plans were announced, dad invested in a local heavy equipment distributorship; he knew consumers and developers would want to lease and service such equipment locally because of its bulk and cost. As the new highway routes took shape, dad built hotels where the roads converged because he believed people would want to gather around easily accessible hubs. He then built residential developments in Charleston that offered commuters easy access to the highway to reduce their travel time to work. Dad wanted to invest in building a better future for West Virginia. That’s why he also played a key role in consolidating the hospital system and persuaded West Virginia University to set up a satellite operation in Charleston that became one of the first regional health science campus operated by any university in the country. He didn’t try to revive the coal industry or convince Kaiser to keep its aluminum plant operating in Ravenswood. Those industries were dealing with forces beyond his control or influence. What he did see were opportunities to enhance the state’s role as an academic research hub and make cities like Charleston more attractive places to live and do business. Dad wasn’t trying to fight the market shifts. He wanted to anticipate and move ahead of them. In every crisis, he was always calmly focused on the outcome. Those lessons were reinforced early in my career at IBM and Wang. IBM was a revered tech giant when I joined its Indianapolis office in 1976. I wasn’t all that interested in technology but I was intrigued with what it could do. The computer revolution had hit Corporate America and no brand was more powerful than Big Blue. It was the home of the mainframe computer, which relied on massive room-sized systems to process mountains of data. The technology was so compelling that IBM’s leaders couldn’t imagine people going anywhere else. If you weren’t looking, the threats were easy to ignore. I’d joined an industry giant at the same time that a kid named Steve Jobs was creating Apple Computer with two pals in his garage and another young entrepreneur named Bill Gates was trying to build on the $16,000 of revenue he’d made in Microsoft’s first year. Although my enthusiasm for helping customers use IBM technology earned me the title of top new sales rep in my multistate region that year, I soon realized that we risked being out of touch with the people we wanted to serve. Companies were moving to minicomputers and IBM’s version was difficult to use. When I shared the negative feedback from customers, my bosses didn’t want to hear it. We were the experts; customers were supposed to buy whatever we put in front of them. That attitude may explain why IBM also let Microsoft create the operating system for its new PC without demanding that the startup stop selling software to IBM competitors. At IBM, the prevailing view was that its proprietary hardware was unbeatable; software was the commodity. It didn’t matter if customers were saying otherwise. Like West Virginia, it got stuck on a strategy and mindset that no longer fit the market. In short, IBM was blinded by its success and wasn’t willing to disrupt itself. It made the classic mistake of getting too far away from its customers, cutting off the most critical source of research into what the market needed. When I got a call from Wang Laboratories in 1983, I decided to take it. Not only was Wang leading the next wave of innovation—the minicomputer revolution—but its home base along Boston’s Route 128 was the high-tech center of the world. Much like Silicon Valley would later do, it had become a magnet for people who wanted to create technology that could change the world. The biggest draw for me, though, was a chance to work with Wang founder and CEO, Dr. An Wang. Many people knew of his reputation as the brilliant, charismatic leader who’d invented magnetic core memory and brought word processing to the average office worker with his revolutionary minicomputer. I had a chance to witness up close what a deep thinker and decent man Dr. Wang could be. At the same time, I saw how he failed to respond to a market shift and repeat the kinds of mistakes that had cost so many West Virginians their jobs. He underestimated the strength of the PC and the Internet Revolution, which cost 32,000 people their jobs. Instead of having the courage to realize that our technology wasn’t competitive against PCs that ran Microsoft, we faded from the game. I oversaw five rounds of gut-wrenching layoffs in the 18 months before I left. We weren’t alone. The entire Boston tech cluster lost out to Silicon Valley by failing to anticipate and adapt to disruption. Like IBM, Wang was so focused on stealing market share from its peers that it underestimated the impact of a new crop of competitors. What’s more, many of our investors and analysts applauded that strategy. As the industry leader, it seemed more prudent for us to build off our core business than to take risks that might sabotage profitable products. When customers moved on the next innovation, though, the core business crumbled. It’s a script that I’ve seen play out many times over my career. I came to Cisco in 1991, determined to never again sit idly by as the world moved in a different direction. This time, I was betting on David instead of Goliath. I moved to Silicon Valley to help build a 400-person company that nobody really knew, making $70 million a year in revenue from a microwave-sized product that few were really sure they needed. Routers were a relatively new technology that let you send data between computer networks. In the days before the World Wide Web, the value proposition of that technology wasn’t clear to a lot of companies. Friends, especially from back East, congratulated me on joining Sysco, the food distribution giant. What excited me was Cisco’s potential. I didn’t see a manufacturer of routers. I saw a pioneer at the forefront of a tech revolution that could change the way people work, live, play, and learn. In such a small operation, I could help create a culture that would not only embrace change but seek it out. Freed from the demands of entrenched interests, we could be the disruptors instead of the disrupted. Despite our modest size, we weren’t alone in spotting opportunities in connecting people online. There were about 50 companies in the networking business in the early days of Cisco. Today, all of them have either collapsed, exited the business, or been acquired. Cisco faced many daunting competitors over the years, all of which were purported to signal the end of Cisco and most of which disappeared in relatively short order: Nortel, Lucent, Wellfleet, SynOptics, IBM, DEC, Cabletron, Alcatel, 3Com, and many more. Many were bigger, or more established, than Cisco at one point. I’d like to believe they just couldn’t keep up, but the truth is that many stumbled because the world changed faster than they did. While each company had its own unique set of circumstances, they all failed to catch one thing: a market transition. Some became so focused on winning the game they were playing that they didn’t notice a new game was starting on the next field. Others stopped listening to their customers. They focused on improving products that were becoming obsolete, diversified into the wrong business, or picked the wrong partners. They held fast to analog technology as the world went digital. They didn’t disrupt, so they were disrupted. Cisco not only survived, it thrived. When I stepped down after 20 years as CEO in 2015, the company had become a $47 billion-a-year tech giant with over 70,000 employees. We moved from having a single product to 18 different business lines, with a No. 1 or No. 2 market share in all but a few of them. From the TV programs that stream into your home to the data being generated by a smart grid, we’d helped millions of people connect and protect their data across the network. We did it through building great technology and teams, through listening to customers and partnering with innovators. We acquired 180 companies over the course of two decades and developed innovation playbooks that could be replicated across the company and beyond. But it all starts with what I learned from West Virginia: the need to stay ahead of the next wave. It’s a lesson that applies to every individual, every business, every state, and every country today. If disruption isn’t at the core of your strategy, you’ve got a problem. A market transition is not a threat. It’s a period of movement from one state to another, when the skills needed to do your job change, when your customers move on to a new technology, or when an economy shifts to new model. It can happen on its own, or as part of a wider trend. What matters is that you recognize it’s both a reality and an opportunity. Those who ignore where the market is going or waste a lot of money in trying to fight it never get very far. They might try to fall back on familiar tactics or pick an easy fight with a traditional rival. When you compete against another company, you’re looking backward. When you compete against a market transition, you learn how to see around corners. Growing up in West Virginia taught me that no one is immune from disruption. Those lessons apply whether you’re a small business that’s looking to grow or a multinational that’s trying to shift to a new model. The ability to figure out what change will look like three to five years before it happens—and then act on it—is how you’ll win. I’m not wringing my hands over what happened to the minicomputer industry in Boston. As with coal mining in West Virginia, the disruption of an industry doesn’t mean the people and places that once depended on it have to be left behind. We all have choices. They might not be easy choices, but the message here is a positive one: Those who embrace change are about to experience one of the most innovative—and potentially lucrative—periods in human history. Digitization will transform every industry and interaction. For the brave, there will be opportunity. For those raised on a foundation of strength and family, like the people of West Virginia, there will be a chance to lead. This isn’t a Hillbilly Elegy that views those who’ve been disrupted as a lost cause. You can reinvent. I am investing in business education and entrepreneurship through West Virginia University for the same reason that I’ve invested time in writing this book. I believe the next wave of innovation will connect and empower people on a scale never before seen, giving everyone a chance to compete. Who will win in this transition isn’t clear. I lived in Pittsburgh in the 1980s, when steel companies kept announcing job cuts and there seemed to be nowhere for ambitious young people to go but away. Today, Pittsburgh has become a model of entrepreneurship and innovation. You can feel the excitement and see the results. Silicon Valley, in contrast, has gone from being viewed as a place that helped the world solve its problems to one that’s also causing problems, from a job creator to a potential job destroyer. When I first came to Silicon Valley, a lot of the leaders had strong ties to other parts of the country: Netscape’s Jim Barksdale grew up in Mississippi, Larry Ellison hailed from Chicago. Now the Valley seems a little more inbred and out of touch with the average person in America. Silicon Valley is becoming less a magnet for top talent than a target that many of them want to beat. I think Silicon Valley will adapt, but nobody can take success as a given. So don’t write off West Virginia. I’m betting on the Mountaineers and believe my home state can become a startup state if the university, business, and public sectors come together to support transformative innovation. We’ve seen companies like Cisco, Microsoft, and Apple, industries like automotive and energy, and countries like India and France reinvent themselves. They don’t focus on preserving old industries or an old way of life, they understand that sticking to a current course is their biggest risk. Your ability to understand and get ahead of market transitions will determine whether you stumble or rise above the rest. In the next chapter, I’ll share some of the techniques that you can use to connect the dots and get a better sense of where the world is going. For me, though, it all starts with confronting the realities of the world that we’re in and the urgent need to adapt ahead of change. There were times in human history when the job you inherited from your parent was pretty similar to the one you’d hand down to your child. We don’t live in those times. Most of us understand the disruptive power of technology and can feel the accelerating pace of change. If you didn’t, you probably wouldn’t be reading this book. At the same time, though, there’s no reason to panic or underestimate the strengths you already have. I’ve talked about how I learned to spot and move on transitions from my dad. I learned equally important lessons from my mom about the power of connecting emotionally with people and of genuinely respecting others, regardless of their status or stature. I’ve always considered my employees my family. From time to time, I’ve had different communications experts suggest “family” is inappropriate when talking about employees, wanting me to use “team” instead. I love the notion of teams and use it often, but I’ve also always considered my employees my family and have always tried to treat them accordingly. I think they’ve known that and it has made a difference in good times, but especially in challenging times. I couldn’t have gotten thousands of employees to move as fast as I’ve needed them to if they didn’t trust me, and trust comes from feeling valued and respected. I also don’t know any other way to operate. The lessons and values that my mom and dad handed to me are similar to the ones that Elaine and I taught our son, John, and daughter, Lindsay. And bear with me, as a proud parent, when I tell you how I now see them live those values every day in their professional and personal lives. Lindsay wouldn’t be the leader in her field of residential real estate development and interior design if she wasn’t highly attuned to the changing patterns, preferences, and trends of her partners, clients, and industry at large. She’s always looked forward and dreamed big. And John has created a career helping disruptive companies like Houzz, Netflix, Walmart.com, and JC2 Ventures enter new markets, adopt new strategies, and understand changing customers. They’ve both achieved success while operating with the highest integrity, building strong relationships, and genuinely caring about people around them. Although my children didn’t grow up in West Virginia, they are also as proud of our family’s ties to that state as Elaine and I are. You don’t have to disrupt who you are to disrupt what you do. I love West Virginia. There’s nowhere like it on earth. At the same time, the story of my home state is a cautionary tale in what can happen if you don’t make bold moves to get ahead of a market shift. You have to disrupt, or you will be disrupted. Like our own stories, this one is far from over. Nobody is too far behind to come back and nobody is so far ahead that they can’t be replaced. The strengths that you build can be deployed in a new way. It’s not easy but if you start by shifting your focus to the big picture and look for clues to what’s around the corner, you’ll have a head start on those who are focused on preserving the past. I’m starting this book in West Virginia, in part, because it’s where I got my start in life. The bigger motive, though, is that I see a lot of parallels with what happened in my home state and what’s happening in every part of business, the country, and the world today. We all know that markets are shifting. Whether it’s Uber in transportation or Amazon in retail, no industry is untouched by the disruptive power of new technologies. We’re not just coping with new products and competition from places like China or Mexico. Every company is becoming a digital company. Every person on the planet has the potential to compete against a multinational—and win. With digitization, anyone can innovate and leapfrog the competition at a scale and speed that’s unprecedented. Once mighty companies have failed. America’s dominant position as a center of tech innovation is coming under threat as other countries start to move ahead. Even Silicon Valley’s position as the world’s leading hub for disruptive innovation is far from assured. As everything becomes connected, the rules for success start to change. How you adapt will determine whether you win. It’s a mindset that shaped how I led Cisco. If you were to ask our customers what we did better than our peers, many of them would say that we moved quickly, with a sense of urgency, to get ahead of market transitions. We absolutely got knocked back on our butts a few times, but in each case, we came back stronger, as our competitors went bankrupt or got consumed. I’d like to say that we were smarter, faster, nimbler, more advanced, and perhaps even better looking than our rivals (you’ll get used to my sense of humor, or lack thereof, as you read this book), but the reality is that we recognized what was happening, responded, and learned to better spot what was coming and get ahead. We were one of the first companies to bet big on China in 1995. We were pioneers in outsourcing manufacturing because it made sense for our customers and enabled us to keep up with rapid growth. We’ve moved from selling routers to partnering with governments that wanted to transform their economies through digital innovation. A lot of people are scared by the next wave of innovation. They can see the threat. What’s less clear is how to respond. It’s not unlike the challenges that hobbled West Virginia. The difference is that what I saw play out over the course of two generations there can now happen within a few years. I’ve been lucky to spend my career on the front lines of the tech revolution, seeing entire industries get disrupted and building a company that became the backbone of the internet. Now, I believe we are on the cusp of a revolution that will take the impact of the internet and multiply it—possibly by a factor of three to five—and play out faster than seems conceivable from the vantage point of today. The coming era of digitization represents an inflection point like no other in our history. The individual trends may sound familiar: artificial intelligence, virtual reality, Big Data, cybersecurity threats, drones, the Internet of Things, driverless cars, block chain technologies, and more. Put them together and the market shift will be profound. We’ve gone from connecting 1,000 devices to the internet when Cisco was formed to more than 20 billion today. Within a decade, some 500 billion cars, fridges, phones, robots, and other devices will be communicating online. The digitization of just about everything will force us to rethink all aspects of our lives—from our business models to our education system. If we don’t get it right, entire industries and even countries could be left behind. A few years ago, I predicted that the disruption would be so brutal that 40 percent of businesses probably wouldn’t exist in 10 years. I got a lot of pushback for that. In retrospect, I think I was being too conservative. As I first learned in West Virginia, no person, company, industry, or place is immune from disruption and no one factor is to blame when it happens. And when it does happen, incredible opportunities are always created—both for emergent players and for incumbents. I’ve talked in these first few pages a lot about disruption from the lens of the incumbent. I am equally enthralled with the role that startups play in driving the disruptions and then growing, and the lessons they can take away to increase their odds. I believe that a thriving startup environment is critical to every country, and that tomorrow’s leaders will be those who nurture a healthy set of disruptors to move us forward. Over the coming pages, I will lay out a set of lessons—based on a lot of scars, moments of genius, and episodes of failure—that apply to any individual and leader in business today. If the lessons of my last few decades help even a few leaders, pioneers, dreamers, and change agents more successfully navigate the digital world in front of us, this book has served its purpose. LESSONS/REPLICABLE INNOVATION PLAYBOOK Disrupt, or be disrupted. Embrace digitization and new technologies that are transforming how you live, work, and do business. The pace and scale of disruption are increasing. Look for industry innovators, startups, new technologies, and—most important—shifts in customer behavior. You can’t plan for a world ahead if you are not investing in imagining it. Keep learning. Education is the great equalizer. Make time to update your skills as well as your technology prowess by learning about innovations in your industry and beyond. If you are an employer, create opportunities for people at all levels to learn and innovate in the digital world. Change before you have to. The worst mistake is to do the right thing for too long. The time to pivot is when your business is still healthy and you’ve earned customers’ trust. Try out new technologies, and embrace a philosophy of constant change. Take risks and move fast. Better to stumble first than arrive last. First movers face the biggest risks but get more attention, opportunity, and leeway to make mistakes. Be a magnet for talent. As an individual, be the person who’s known for embracing innovation and promoting change. And remember the adage, “People won’t remember what you say, but they’ll remember how you made them feel.” Seek diversity in colleagues, neighbors, customers, and local industries. Company towns can die when the company goes away and like-minded people tend to reinforce existing points of view. Diversity breeds resilience and innovation. Anchor on your core values and strengths, even as you question conventional wisdom. You can disrupt what you do and what you know, but always stick to who you are and what you value. Build on what you know, and use your expertise to guide you into new areas. Anticipate failure. At times you will fail. Get up, dust yourself off, learn from your mistakes, and move on. How you handle setbacks is as important as how you handle success. Chapter Two (#u619fc447-1b55-5315-b003-e71858c6f92f) ACT LIKE A TEENAGER AND THINK LIKE A DYSLEXIC (#u619fc447-1b55-5315-b003-e71858c6f92f) (How to Spot Market Transitions) (#u619fc447-1b55-5315-b003-e71858c6f92f) One of the advantages of being a CEO in Silicon Valley for 20 years is that I got to see a lot of leaders when they were just starting out. Their businesses and their personalities are all quite different, but they share some common characteristics with a lot of the startup founders that I’m betting on today. If you think that they all came in with an impressive track record or flawless communications skills, you’re wrong. In fact, some of them were so green and lacking in those areas that it was easy for critics and competitors to write them off as inarticulate, naive, or even immature. What struck me was not their inexperience, but rather their insatiable curiosity and ability to handle multiple random data points at once. Along with possessing a bold, almost dreamlike vison for where they want to go, they have this distinct talent for moving from one topic to another with lightning speed, and possessing a bold, almost dreamlike view for their company. It’s the kind of nonlinear thinking that someone who is dyslexic, like myself, will find familiar. The most consistent similarity across every age and area of expertise was the mindset of these entrepreneurs: They came across as fearless, curious, and hungry for new ideas, with a desire to disrupt a segment of the industry. They were all about the future and determined to do things differently from the people who were in charge. Some seemed almost too impatient to stand still and none of them were satisfied with the present. In short, they acted and thought like teenagers—with all the enthusiasm, bold dreams, and ambition that most of us had at that age. Teenagers don’t believe in incremental change and the best leaders don’t either. They want to disrupt the status quo and are frankly audacious in believing they can change the world. I’ve seen that quality in startup founders who are not far removed from their teens and also in leaders who are well into their nineties. What differentiated the ultimate winners from the losers in Silicon Valley wasn’t their ability to “mature,” but their ability to hold on to that teenage mindset and “dyslexic” ability to connect the dots while adopting the practices to scale and continuously innovate their businesses. Today, many of those impatient, curious, and bold founders are leading some of the biggest tech companies in the world. The qualities that made others write them off were essential, I believe, in fueling their success. What is so exciting—and makes me feel so positive about the future of startups on a global basis—is that I see the same combination of factors in the next generation of leaders. The difference is that, this time, I’m seeing those leaders emerge in every part of the world. Three of the startups I am involved in have CEOs who have won multiple awards and recognition as leaders under the age of 30. They are all similar when it comes to their vision, curiosity, impatience, competitiveness, and bold aspirations to change their segment of the industry. The age of the average CEO I am meeting with nowadays is actually getting younger. The reason, I think, is that the need to solve hard problems with a digital native’s enthusiasm for new technologies and a desire to disrupt the status quo have never been greater. That’s not enough to win in the long term, as I’ll explain later on, but that mindset is a prerequisite to being in the game. In the last chapter, I talked about the lessons of West Virginia to show how any place can become a market leader at a point in time, and lose that status when it fails to get ahead of market shifts. In this chapter, I want to bring the focus back to the individual. Everyone has their own definition of leadership. For some of you, it might involve starting a company that will change the world. For others, it might mean becoming a decision maker in a major company that needs to adapt to a rapidly changing world. Some might want to build a career in politics or create momentum around a cause that really matters to them. No matter what your ambition, the foundation for success is not only your skills but your mindset. If you are curious, hungry to learn, audacious, and eager to seek out change, I’d bet on you before I’d bet on someone with a great set of skills but no vision for what’s possible, no appetite for what’s next, and no willingness to take bold moves. Why am I so optimistic about the role digital natives will play in leading us through the next waves of disruption? They are prewired to seek out change and dare to get ahead of it. If you’re a CEO or the leader of any organization, you have four key responsibilities: (1) to set the vision and strategy of the organization; (2) to develop, recruit, retain, and replace the management team to execute that vision and strategy; (3) to create the culture; and (4) to communicate all of the above. How you fulfill those responsibilities will depend on everything from your industry to your personality, but it’s hard to succeed in any of them if you don’t start with the right mindset. You have to develop a capacity for filtering and evaluating the facts, the fears, the fiction, and the feedback that bombard you every day. When you see an opportunity, you act fast to figure out where the world is really going. Standing still is riskier than moving forward. If you wait until the trend is obvious, you’re already too late. The next generation of leaders are more than just tech-savvy; they are brave and curious and hungry for new ideas. They’re too impatient to stand still. I’ve talked to a lot of teenagers over my career and I’ve never met one who is satisfied with the present. They’re all about the future and it can’t come fast enough for them. They want to do things differently from the people who are currently in charge. In fact, it’s their job to disrupt. Teenagers don’t seek incremental change. They want to turn the world upside down and make it their own. They’ll shake things up while juggling a dozen other things: doing homework, listening to music, texting friends, eating over their computer (even though you’ve told them not to), posting a video on YouTube, and then finding something funny to share while they’re at it. In a teenager, such instincts can be reckless and impulsive at times. Leaders can channel that mindset into a more structured framework and it can become a powerful predictor of success. If you’re looking for signs of disruption and change, you’re more likely to find them. If you want to tackle big problems, you have to take big risks and accept that there will be setbacks along the way. It doesn’t matter how old you are. In fact, the first person who comes to mind when I think of a boundless curiosity and impatient mindset is the late Israeli leader Shimon Peres. He was inspiring, fearless, and even brash about solving big problems. He was also well into his 70s when we first met at the World Economic Forum annual meeting in Davos, Switzerland, 18 years ago. I thought he wandered into my session by mistake. I was used to seeing global leaders onstage, not in the audience. He was there to learn about new technologies and came up after the session to introduce himself and ask more questions. After we talked, he didn’t just move on to the next session. He wanted to follow up and start working together on a plan to bring the internet to every person in Israel. I couldn’t believe he was serious. Normally, these issues are discussed at the 30,000-foot level, especially in a place like Davos. Here was a man who liked what he heard and wanted to act on it as soon as possible. I came to realize that this was typical behavior for Shimon Peres: No matter how senior the position or how sensitive the topic, he always had an incredible thirst to learn, enthusiasm for what’s next, and a willingness to take risks. I think that’s why he was so good at sensing shifts in technologies and markets as well as in the public mood around key issues. It’s why Shimon Peres was a man who not only reinvented himself throughout his career but also played a key role in reinventing Israel. As he put it, “Through creativity and innovation, we transformed barren deserts into flourishing fields and pioneered new frontiers in science and technology.” In short, he transformed Israel into a startup nation. He taught me that the wisdom of experience and a teenage mindset are not mutually exclusive. Together, they can be incredibly powerful in driving and scaling innovation. We developed a friendship and a partnership that would last right up to his death at the age of 93. I’ll never forget the night that Shimon came to dinner at my home in Palo Alto. (He never let me address him by anything other than his first name.) It was 2012 and he was the president of Israel. There had been an outbreak of violence along the Gaza Strip around that time, as well as speculation that Israel might attack a nuclear facility in Iran. So you can imagine the security concerns around having the Israeli president attend a dinner with CEOs, startup founders, venture capitalists, and other tech leaders at a home on the edge of a 1,400-acre public park. One evening a few days before his visit, Elaine and I looked out the window of our kitchen to see the foothills behind our house come alive with multiple lights going every which way. It was like a scene from E.T., complete with UFOs and military officials with flashlights, scouring the land for signs of life. Earlier, we had spotted a man jog past a clump of trees in short shorts and sneakers. I knew he had to be Israeli security. Nobody in Palo Alto would dress like that to go jogging at night. And yet if anyone felt tense at the sight of SWAT teams—not to mention security personnel from the state, local, and national governments of two countries—surrounding my property and snipers sitting on my roof, Shimon’s enthusiasm brushed that away. At 88, he was like a kid in a candy store, hungry to learn about new technologies and thrilled to be in Silicon Valley, which he described as “the brain of our time.” Within five minutes, every person at the table was taking notes. When Shimon learned that I had an electric car, he immediately asked if he could drive it. I said yes, of course, though I mentioned to him that his security team had told me to keep him in one area of the house. Shimon’s response: “John, I’m the president and I want to drive the car.” As a group of us headed down to the garage to see the car, one of his aides came up and quietly informed me that he didn’t have a driver’s license. I immediately laughed and thought, well, this is really going to be interesting. And it was. Of all the threat scenarios that the Israeli secret service had prepared for, watching their president drive my electric car wasn’t one of them. For Shimon Peres, a man driven by curiosity and immune to fear, the real risk would have been to pass up a chance to be part of the future and to dream together with many of the current and future leaders of Silicon Valley. This wasn’t a leader who was nostalgic about the past or worried about protecting what he’d built in the present. Shimon Peres was a dreamer who helped build Israel and devoted his life to promoting peace and prosperity throughout the Middle East. He once took me to visit upper Nazareth and lower Nazareth in a single day, meeting with Jews, Arabs, and Christians in each of these communities to talk about how technology could be an equalizer in life. People of all religions loved this man and, at times, disliked him for taking a bold stance. He had this baritone voice and easy humor that made him a memorable speaker, yet the thing that made him so compelling wasn’t how he communicated but what he communicated. He never missed an opportunity to bring people back to the big picture, to remind them of a bold ambition or a vision that was bigger than themselves. He once told me that leadership was lonely and he was right. When you’re willing to make big bets, play by different rules, and talk about dreams that seem unlikely to come true, you’re acting like a teenager. You could fall on your face. If you can then make those predictions come true, though, you have a chance to make history. My empathy for the teenage mindset that Shimon embodied so well may stem from the fact that I consume data in a similar way, though for a very different reason. Growing up in the 1950s, it was clear early on that my brain was wired a little differently from other kids’ brains. I didn’t digest information in a linear way; I took in everything at once. I could go from A to B to Z with incredible speed, but going from A to B to C to D to E…to Z was almost painful. That became obvious when I was learning to read. I’d scroll through a page in reverse order, from right to left. I’d transpose letters and lose my place midway through a paragraph. I’d often mispronounce words. It didn’t matter that I was good at math or strong in sports. It didn’t matter how many evenings I spent reading with my mom and dad, or how many days I spent memorizing lines in class. Hard as I tried, I couldn’t get it. Sixty years later, my hands still sweat when I think about what it was like to sit there in second or third grade as we went around the class, taking turns at reading aloud. When my turn came, I’d inevitably stumble and a few kids would laugh. I was a pretty good sport so I tried not to show how much it stung. But the memory stuck with me. Maybe that’s why some people consider me to be one of the “nice guys” in Silicon Valley. While I’ve been known to tease close friends, I don’t ridicule people. It doesn’t matter if they’re my fiercest competitor or my closest friend. No one deserves to be mocked or have negative things said about them. I remember the pain of feeling ridiculed. For a while, I even questioned my ability to learn. When I was diagnosed with a learning disability (later diagnosed as dyslexia), one teacher warned my parents that I might not make it through high school, let alone go to college. Luckily, my mom and dad didn’t share that bleak outlook. The message they gave me was that I was a bright kid who just needed to learn a different way. Even so, I understood that this was a disability I had to fight to overcome. In a linear environment, going from A to B to Z would hold you back. It was only later that I recognized the unique strengths that came with being wired this way. While I’ve made plenty of mistakes over the years—and I’ll talk about some of them in this book—I’ve had a good track record at spotting the big trends in technology. Sometimes, I’ve moved too early. Sometimes, I’ve tried to do too much. At Cisco, I was able to navigate multiple market shifts that killed our competitors because we sensed shifts in markets and technologies long before our competitors. Those aren’t my words. That’s what Bronwyn Fryer and Thomas A. Stewart wrote in Harvard Business Review in 2008. The same piece described me as having a “nearly uncanny ability to survive downturns, see long-term trends, and identify market transitions.” Hey, I’ll take that! (Let’s just say that I’ve been called worse!) What I learned—that anyone can learn—is how to gather lots of data, step back, and connect the dots to see trends. In short, there is an advantage to a dyslexic way of thinking, which tends to make you think less in words than in pictures and graphs that take all the information in at once. I’ve always had a knack for spotting patterns and then figuring out what’s likely to come next. I also happen to enjoy it. I love making bets. Just ask anyone who’s lost a dollar to me in Liar’s Poker or by betting on which elevator comes next. (I’m not invincible. Those elevators can be unpredictable!) The little bets are for fun: a toss of the coin or a dare to get the juices flowing. The big bets can make or break a company, reshape an economy, define a career. We made a lot of big bets at Cisco. You don’t acquire 180 companies and go from selling one product to 18 different product lines if you don’t have an appetite for risk. The difference with the Cisco bets is that I never felt I was defying the odds. In fact, it was just the opposite: In every move, I had a clear sense of where the market was going, what our competitors were doing, and what our customers wanted. Everyone else on my team did, too. What might have looked like a shot in the dark or an illogical move to others soon became a well-lit path for us. It’s not because we hired only dyslexics into leadership roles. What differentiated Cisco’s approach was certainly a level of experience and maturity, though we sometimes hid that well. The bigger difference was that we had a shared mindset, a shared process if you will. More specifically, we developed a replicable innovation process that helped us find new ideas, try new things, move fast, and even break some glass—and then we synthesized that data to generate insights that helped us make smarter decisions. To be clear, this is about cultivating the right mindset and risk appetite for success. The No. 1 driver in how we developed products and grew our business was—and always should be—our customers. If we didn’t give them what they wanted or needed, plenty of competitors would have happily stepped in to serve their needs instead. I can share a lot of stories about how we developed products and talent and disrupted industries by working with customers in different ways, but our successes all hinged on trying to understand where the market was going and working with our customers to get there. You compete against market transitions, not against other companies. If you don’t stay focused on figuring out what’s happening in the market, it doesn’t matter if you win a few battles here or there. A new technology or business model will come along, and you’ll be left behind. Disruption can quickly lead to self-destruction if you misread the market and end up fighting the current. The first step is to make sure that you’re truly taking a wide-angle view, collecting data from multiple players, and connecting those disparate data points to get a picture of how the market is shifting. Without really being aware of it, I’ve been crowdsourcing, pattern thinking, and beta testing my whole life. I seek insights and feedback from everyone, especially customers. I don’t pretend to be an expert in figuring out tomorrow’s needs in aviation and city design and food production but I know where to find them. I coach new leaders to collect data from customers, study competitors, seek out disrupters, and look at pertinent factors to get a sense of the big picture. Then, I zoom in on a few points to see what’s really moving the needle, pick some options to explore, and check in with customers again. It’s like a map. As more data comes in—customer feedback, engineering data, sales, the arrival of new players—the connections and trends become clearer. Once you understand how the market is changing, you can develop the right product and strategy for where the world’s going to be. That’s not a bet but a way to turn pattern thinking into a playbook. The facts are usually all there to let you figure out the big picture, if you know the right places to look. The issue is that people don’t always like what they see and feel threatened by it or even try to deny it. I was ridiculed in 1997 for predicting that “voice will be free.” Not only were telephone calls the main source of profits and revenue for telecom companies—many of whom were my key customers—but government regulation and the amount of capital you’d needed to build a telecom infrastructure made it hard for any startup to compete. I wasn’t really looking at that space, however, because I felt the real competition was elsewhere: the internet. In the mid-1990s, it became possible to break down voice signals and transfer them like any other data from one computer to another. To me, this challenged the fundamental business model of every telecom company on the planet. Why use copper telephone wires if you could use Voice over Internet Protocol, aka VoIP? The technology was sure to improve and the cost difference was, to say the least, compelling. On the web, it costs about the same to send data across the street as it does to send it across the planet. Frankly, the same could be said of phone lines, too. Much like the internet, phone lines are a fixed cost. Whether you make a single call or 100 calls doesn’t really matter. The cost to the phone company is the same. There wasn’t really a technical reason to charge as much as a few dollars a minute for long-distance calls. Phone companies had been charging such prices because they could. There had been no meaningful alternative. With the internet, that was no longer true. To me, it was inevitable that voice calls would move to the web and be treated like any other form of data. As technology evolved, networks expanded, and consumer behavior changed, the trend became clear. The business model of long-distance carriers was about to be disrupted. The question was only how soon it would happen, and how the carriers would respond to losing their main source of profits and revenues. These lessons are just as true at the government level as they are in business. The same process helped me to see a path for Emmanuel Macron to become the president of France long before he announced his run in late 2016. Most people considered him a long shot. The first time I met him, when he was economy minister for President Fran?ois Hollande, I called up Elaine to say that I’d just met a future president of France. (By the way, he won the election, 65 percent to 35 percent.) My instincts had nothing to do with French party politics: Macron was, in my opinion, an economic and social reformer in a socialist government who ran as an independent. I was struck by what I was seeing in communities across France: a hunger for the kind of innovation that Macron had helped to stoke under Hollande, business leaders talking about inclusive growth, entrepreneurs lobbying to compete with the rest of the world instead of turning away from it, and media pundits arguing for the need to create inclusive wealth, not redistribute it. The people I met were dissatisfied with the status quo, but not in a way that made them fearful of outsiders or nostalgic for some romanticized view of the past. Macron was speaking the language of entrepreneurship and innovation in a nation that was becoming more entrepreneurial. If you only saw the restlessness, the threat of a nationalist victory might loom large. When you connected it to what people were saying and doing across France, it was hard for me to imagine a victory for anyone but Macron. I don’t want to diminish the challenges. What the Harvard editors identified as one of my greatest strengths grew out of a weakness that I’ve struggled with my whole life. As I mentioned before, I was diagnosed with a learning disability at the age of eight. While researchers were starting to pay more attention to learning disabilities and how they affected kids’ brains in the 1950s, they didn’t understand dyslexia the way they do now. There was no support system in my public school to help me. Instead, my parents hired a “reading coach” named Lorene Anderson who worked with me after school for a couple of years to teach me new strategies. I owe a lot to Mrs. Anderson. In addition to being amazingly patient, she helped me identify my own learning style and develop strategies to compensate for my weaknesses. Like my parents, she made sure I knew that dyslexia had nothing to do with my intelligence or capacity to learn. I just had to tackle the information differently. She taught me to treat how I process letters as a curve ball that breaks the same way every time. Along with demystifying the problem, Mrs. Anderson found solutions that played to my strengths. Once I recognized the pattern, I could map out a strategy to use again and again. Even so, it was a slow and painstaking process. There was no magic pill that could change the way my brain worked. I read backward and in reverse order. I had to figure out other ways to learn and find ways to work around the areas in which I was weak. I’ve learned to become a more active listener and more adept at communicating verbally, using voice, video, and texts to get my ideas across. When giving speeches, I don’t use notes. I accept that there are some things I will never be good at, which has made me a world-class delegator (and talent scout!) when it comes to tasks like preparing written material and translating concepts into a detailed step-by-step process. If I hadn’t learned to accept my weaknesses and complement my strengths early on, I would not have gone very far. While I learned to deal with my dyslexia, I rarely talked about it. How many CEOs really want to admit that they struggle to read? I certainly didn’t view it as a strength. That changed about two decades ago when I spoke at an event for Cisco’s Take Your Children to Work Day. One little girl raised her hand to ask me a question but was unable to get out the words. As I listened to her struggle to make herself understood, I was immediately transported back to that classroom in West Virginia. My heart went out to her. When she tearfully stammered that she had a learning disability, I told her that I did, too. I walked her through all the things that Mrs. Anderson had taught me: slow down, take your time, don’t worry about what anyone else is thinking, just sound it out and focus on the concepts, realize that everyone else in the room has strengths and weaknesses, too. As I talked about my own strategies, I could see that I was helping her relax. Then I notice that the room was oddly silent. I paused for a second, realizing I’d just shared an intimate and little-known detail about my own life in front of 500 employees and their kids. Now, it was me who felt a bit nervous and embarrassed. I continued taking questions but, inside, I wondered if I might have shared too much. When I got home that evening, there were several dozen messages from employees. Many just wanted to thank me for talking about my dyslexia. Some were employees who’d struggled with it themselves but had never shared that fact with their colleagues. Others were parents, trying to figure out what they could do to help a child. A lot of them were people who might have otherwise felt too intimidated to reach out to the CEO of Cisco. Here I was worried that my colleagues might think less of me for having a learning disability, and instead I found that they were complimenting me for my courage and my candor. I realized then the power of admitting my vulnerabilities and sharing my own story. Among other things, it demonstrated the power of surrounding yourself with a team that balances your weaknesses and complements your strengths. As I grew more comfortable with talking about my dyslexic way of thinking, it became clear that the way I processed data had actually helped me as a business leader. My brain is naturally wired to visualize vast amounts of data and draw connections at a fast pace. I can absorb the details of what’s going on around me—the chatter, the personalities, the activity on the sidelines—and still remain focused on the task at hand. I’m constantly asking questions to fill in gaps and find out more. It’s more like plotting a graph than plotting a story. The concept of “information overload” is something I’ve never experienced. What I see kids buy in Silicon Valley might bring to mind what a political leader told me in Jordan a month earlier, and one of our sales leaders reinforced. Each anecdote becomes a point of comparison in the broader landscape, creating a visual map. When I came across research that suggests dyslexics are often better able to detect patterns in complex sets of data, it didn’t surprise me. I’d always been good at connecting the dots and at the same time very aware of my weaknesses. After years of encouraging people to develop expertise in a particular subject, we’re starting to recognize the benefits of teaching people to be agile learners who can connect the dots. It’s a particularly important trait to develop if you aspire to leadership. The impact of trends and technologies is a puzzle that’s hard for anyone to figure out. An ability to grasp the big picture and see how different trends intersect is a key skill in picking the right path to pursue. Maybe that’s why more than a fifth of CEOs are dyslexic. To create brands like Virgin, Charles Schwab, JetBlue, Ikea, CNN, Ford, or The Body Shop, you need to spot opportunities that others don’t see, pay attention to what’s around you, and think outside of the box. It’s hard to connect the dots if you don’t know where to look or whom to trust. The first step is to focus on the big picture and the possible end result. Instead of trying to synthesize facts and organize your argument like you’re going to present it in a written report, try to visualize everything as pictures or a graph. Where are the clusters? Are common themes emerging? What matters is the trend and the links that you find. Pay attention to broader shifts in the market, especially where two or more are related, and seek out data or experts to fill in the gaps. As new information comes in, step back and try to put it in the context of the bigger picture. The challenge is to figure out what matters. The volume of data at our disposal is already dizzying and, as more things get connected to the internet, that flow of information could become a flood. You have to learn to distinguish between what Nate Silver calls the signal and the noise. He’s the statistician who famously predicted the results of the 2008 presidential election in all but one state. Silver said he just looked at the data and the answers were right there. It probably helped that, unlike some pollsters, he wasn’t invested in the outcome. All of us can come up with examples of the age-old art of lying with statistics. It’s easy to find facts that tell a story that isn’t true. It doesn’t have to be deliberate; data can be deceiving, especially when you’re looking for “proof” that supports your point of view or protects your business model. I learned early on that people can see the same events differently, especially during a crisis. When I was around 11, I saw a girl fall off the 10-foot diving board at our community pool. I just happened to be looking as she slipped and grabbed the right side of the handrail with her right hand, which made her body swing under the board as she lost her footing and landed on her back with her feet facing the pool. I remember those details like it was yesterday, in part because I was alone in recalling them. I listened to at least a dozen other people explain what happened, and none of them saw it the same way. One witness said she slid through the steps, which seemed physically impossible. Another remembered her falling to the ground and then rolling in pain underneath the diving board. Everyone was talking over each other to explain what had happened, and none of it sounded like what I’d seen, or even possible. You can’t slide through the steps of a diving board. She couldn’t have hit her head from the angle that she fell. When I turned to my dad to complain that everyone else had it wrong, he said I was probably right because I was in a good spot to see everything and wasn’t caught up in the emotion of the moment. “That’s why you’ve got to stay calm in a crisis.” It’s also why you want to seek multiple perspectives, especially from customers, and cross-reference them as new facts come in. The best filter for judging is to look at the source. I always put a premium on data that I get from customers because they’re on the front lines and are critical partners in deciding where to place our bets. Of the 180 acquisitions we did at Cisco and the dozen startups and young CEOs that I’m investing in and mentoring now, I can tell you what one or two customers said that convinced me to make the decisions I made. That’s why the second component of thinking like a dyslexic is to be curious. That sounds easy, doesn’t it? A lot of leaders would say they’re curious. I can tell you from personal experience that most leaders are not. They don’t ask a lot of questions, rarely challenge conventional wisdom, stick with what they know, and often turn to sources that reinforce their existing point of view. Maybe that’s why I notice the people who are genuinely curious about the world around them. This isn’t some rare trait that you either possess or you don’t. Everyone is capable of cultivating their curiosity. We all used to be curious. As kids, we’re brimming with curiosity. We explore new places, get lost, try new things, climb trees, fall down, accept dares. It never stops. We ask questions and we don’t always care who gives us the answer. We just want to know it, then we file it away, and go off to do something else. As we get older, though, curiosity starts to diminish. All of a sudden, we’re the ones who are supposed to have the answers. We worry about looking dumb or ill-informed. We don’t want to offend people or step on any toes. We seek expertise in a form that feels familiar to us and are taught to impress each other rather than learn from each other. Sometimes, we don’t even want to know what someone else thinks in case we don’t like what they’ll say. We’re not seeking feedback. We’re looking for reinforcement. You don’t become enlightened that way, and you miss most new opportunities. I encourage all types of leaders—CEOs of multinational corporations, young entrepreneurs starting their first company, or global government leaders—to ask customers and citizens how they feel about their products or platform but also to go one step further. Get to know customers as people and find out what’s on their minds. What are they keeping an eye on? Where are they investing their time and resources? Who’s on their radar and why? What keeps them up at night? Talk to colleagues and friends and even people you meet on the street. Listen. If you can’t think of a follow-up question, then there’s a good chance that you weren’t listening. Have an agenda. When I’m in other countries, I’m often curious to see how people are using technology and what kinds of businesses they’re starting. I constantly ask people for advice on what I can be doing better. One question I ask of the leaders I meet is what’s the most important lesson they’ve learned during their career. For Shimon Peres, who was one of the most optimistic and social leaders I’ve ever met, it was realizing that leadership is lonely, especially in tough times. You have to have the courage to stand alone. Look at the data. While customers are usually your best sources for understanding what’s happening, don’t just rely on your gut or go with what everyone is telling you to do. Analyze the data. We collect and analyze data across different markets and industries to look for patterns and aberrations that might suggest something is going on. The more you can standardize the process, the more you can cross-reference what you find and make accurate comparisons. Data might not tell you why something is happening, but it does tell you what’s going on. When Cisco was knocked flat by the dot-com crash, the first warning signal came from the data. Within days, orders suddenly dried up. At the same time, though, the data had been telling us that everything was okay just weeks before. The reason was that our customers had been acting like everything was okay, placing orders and making projections that were at odds with the reality of what was going on. That’s why you can never use data alone in making decisions. You need to run it by the experts who see this stuff and live it every day. They use the equipment. They know what’s normal and what’s not. If you want a broad view on what it all means, bring in people with broader cross-functional roles, perspectives, and networks. While they might not have specific subject expertise, they often have an edge in finding insights because it’s their job to look at the big picture. If you want a reality check on what you’re seeing, though, go with the experts: your customers. Let me give you two examples that have nothing to do with business. The first comes from Paul Guzzi, a former colleague at Wang Laboratories and a strong Democrat who’d spent the first part of his career in Massachusetts state politics, including four years as Secretary of the Commonwealth. During the 1988 presidential election, Paul and I were at a customer meeting in Chicago and started talking with a hotel doorman about the various candidates. Massachusetts Governor Michael Dukakis had a double-digit lead in the polls at that point, but the doorman told the two of us that he planned to vote for George Bush. As we were leaving, Paul turned to me and said, “Bush is going to win.” It seemed like a bold prediction to make off a sample size of one. But Paul viewed this man as what I’d consider to be a subject expert: a lifelong Democrat who clearly cared about the issues that were the foundation of Dukakis’s campaign. The doorman was also African American, and black voters traditionally vote overwhelmingly for Democrats. If he felt that the governor was not effective on those policies, the odds were high that many of his peers felt the same way. For Paul, who had probably talked to thousands of voters over his career, the doorman’s comments were telling and signaled a profound shift in the big picture. He’d been seeing other data that suggested a pattern of vulnerability for Dukakis and this clinched it. While the early polls may have considered Dukakis a shoo-in, Bush won. While the doorman might or might not have predicted Bush’s win, Paul did. He connected the dots and knew what to look for. Many years later, Elaine and I were in a limousine and started talking politics with our driver, who was African American. Donald Trump had recently become the Republican candidate and I was curious to know what the driver thought of him. It turned out he was planning to vote for Trump. He knew about Trump’s record on race relations and wasn’t sure if Trump’s policies were as likely to hurt him as help, but he was fed up with the establishment in Washington and was willing to take a risk. Much like the doorman in Massachusetts, his support was a powerful data point that conventional wisdom might turn out to be wrong. As I talked to more people on my travels, it became clear to me that Trump was winning support across party lines, which was not yet showing up in the polls. So when former Bloomberg TV anchor Cory Johnson asked me to pick the likely winner at a summit in May 2016, I said, “If you had to bet on momentum right now, candidly it’s going to be Trump.” Hillary Clinton was leading in most polls and I ended up breaking my own record as a Republican to vote for her on election night, but I could see that the pattern pointed to a victory for Trump. Whether that would be good for the country was beside the point. This was the reality of what was going on, and many people didn’t see it coming. You might think that it’s easier to spot data and connect the patterns today. After all, we have a world of information and artificial intelligence at our fingertips. I think it’s actually becoming much more difficult. Greater access to content has made it easier for people to seek out news that reinforces their existing point of view. Instead of using technology to connect with other cultures, we increasingly connect with people who remind us of ourselves and reinforce what we already know. We filter the world through our “friends” and lose faith in our institutions. It’s easy to see why. Elections that could be more transparent and democratic in the digital age instead seem more vulnerable to manipulation and even hacking. Journalists can be as partisan as the people they cover and, even when they’re not, get accused of peddling unreliable news. Leaders whose countries could be hubs of innovation instead give in to fear and resentment, worsening the problems they promised to fix. More information doesn’t make us more informed. That’s why it’s so important to get outside your comfort zone and talk to people who don’t cross your path every day—at the end of the day, we all need to remain as curious as we were as teenagers. That might sound like strange advice in a business book but I can tell you that my curiosity about things I don’t understand has been a critical factor in my success as a leader. It’s easier to spot opportunities and changes when you’re on the outside. That’s why teenagers can be so effective at spotting the next big thing. They have very limited power so they’re more inclined to look beyond the people in charge. Your product looks different through the eyes of different consumers. Sometimes, you get the best advice from people who aren’t your friends and, in fact, might actually be your rivals. I always listen to my critics and pay attention to the people who are trying to disrupt my industry. If you never feel uncomfortable or out of your element, you’re not likely to innovate in a meaningful way. There has to be some discomfort to be creative. Being dyslexic probably gave me a head start. I was not comfortable in school. In fact, I found it to be really tough in the early years. Learning to cope with a learning disability is hard work. Don’t let anyone fool you into thinking otherwise. I graduated from high school toward the top of my class, but it wasn’t because the words looked less jumbled on a page. I had to work through it and around it to learn what I needed to know. I was lucky to have my parents and Mrs. Anderson in my corner. Even so, I faced hours and hours of frustration, trying different techniques until something stuck. I love Mrs. Anderson but I do not look back on those years of tutoring with fondness. I hated going to those sessions. They were hard, but they did help me to develop a work ethic that’s stuck with me to this day. If you read about others who’ve reached their goals with dyslexia, whether it’s Virgin founder Richard Branson or Charles Schwab, you see that same drive and willingness to put in the hours. Once you’ve faced dyslexia, conquering other challenges can seem more manageable. You learn that you can achieve tough goals if you persevere. You understand your own limitations and learn to tap the talents of others to complement the areas in which you’re weak. That kind of persistence can come from having to overcome any number of challenges in life. What it does is make you realize that there are no easy answers. When one customer tells me that they like a company, it’s one data point to consider. If I rushed out to buy the company based on one recommendation, I’d probably be a fool. Sometimes you have to dig and be patient and go back again and again to get the right result. When you visualize networks in your head, you often end up creating similar networks on the ground. If you can make sense of seemingly chaotic data points to create understanding, you will be rewarded. The network is more powerful than any one part. At Cisco, we created open platforms and networks of products that we organized into “architectures” to help people achieve certain solutions. We had networks of suppliers to build and take those products to customers, as well as networks of partners to achieve common goals that we couldn’t reach alone. The power of your network is not just the number of people or devices connected to it, but also the strength that you create and derive from that network that gives you all those data points in a way that lets you make better decisions. A lot of what you see on LinkedIn or Facebook are fragile networks in which many of the connections are between relative strangers. Convincing hundreds of people to accept your LinkedIn request doesn’t indicate a deep network, and neither does the number of Twitter followers, especially now that we know that kind of volume can be bought. You can really only see the strength of a network when it’s put to the test. Do people come through on requests? Can you mobilize the network to take action on a shared goal? Are there multiple links between people within the network or are they all linked through you? The most resilient networks are bound together by a tremendous sense of trust. When I go to talk about a new product concept to a major customer in the Middle East and he cuts me short to say, “John, I believe in your vision because I believe in you,” that’s trust. When a stranger asks to connect on LinkedIn or someone adds you as their 4,743rd “friend” on Facebook, I suspect the bond is very loose, if it even exists at all. How do you walk into an unfamiliar situation and connect the dots? The short answer is that you prepare. I’ve been very lucky in my career and I’ve found that the more prepared I am, the luckier I seem to get. The more I know about the people I’m about to meet, the better questions I’m able to ask and the better the products we’re able to build or buy. I use the same strategy for every trip, every event, and every customer meeting that I’ve done over the last 25 years. It’s based on a playbook developed by my assistant Debbie Gross, which is another reason I couldn’t have run the company without her. She or another member of the communications team created a briefing book organized to follow the flow of each day and each event or meeting. It contained bios of every person I was scheduled to meet, data on what Cisco was doing for that client or their community, background clips related to our presence in that community, and observations from the local team, as well as a summary of our objectives for every meeting, and any other context I might need. To this day, if I’m going to speak, my briefing notes are in the playbook, too. It’s organized in such a way that I can dive into the specifics of each person and event while tying that data back to the big-picture objectives. Think of it as a replicable innovation playbook for meetings that’s enabled me to get dramatically more value out of each interaction. What it does is allow me to better tailor my insights to connect with whomever I’m talking with. I hadn’t realized how ingrained that habit had become until Elaine pointed it out. She’s not just my wife but also my most trusted friend and my toughest critic, so when she gives me a compliment, I rarely forget it. After one dinner several years ago, she remarked on how much effort I had put into finding an area of interest to connect with each person at the dinner that night. She was right. I wanted to arrive, armed with stories and contacts and strategies to connect with everyone I was about to meet. Not only did it make for a better evening, but I also walked away with new ideas and connections I’ve maintained to this day. One final thought I’d offer if you want to really learn to look at the world like a dyslexic is to let down your guard and be humble. As a general rule, leaders are not a humble bunch. It takes confidence to lead people and a certain degree of cockiness to make tough decisions when there are smarter people in the room who disagree. (Believe me, there almost always are.) You have to connect with them on an emotional level. You don’t do that by dazzling them with your talents. You share a part of who you are. Talking about dyslexia made me more relatable for a lot of people, as did my willingness to make fun of myself—whether it was being the brunt of my own jokes onstage or a voice of comfort in a crisis. As a leader, you might not think that you’re intimidating to people. Believe me, to many out there, you are. You might be intimidating to the people you hire, or to the ones who hired you. If you’re young, you may be intimidating to older people and vice versa. You can intimidate people because of your gender, your skin color, your accent, your clothing, your title, and any number of other factors that might seem ridiculous. That doesn’t mean you have to change who you are. But it does means you need to connect on more than just a superficial level if you want to get honest answers. You must be willing to emotionally connect with people—to really listen to their challenges and share your stories, too. If you only ask questions and don’t give any answers, you’re not enriching the other person. One of the leaders who really convinced me of the importance of letting down my guard was Sheryl Sandberg. We were at a conference, shortly after she had written her groundbreaking book Lean In. As chief operating officer at Facebook, Sheryl could have written several books on her successes. Instead, she wrote about the roadblocks she faced as a woman trying to build a career while having a family. At Cisco, we’d done a very good job, especially versus our peers, on promoting gender equality in our workforce, senior management team, and board of directors. However, Lean In reminded me that we could do so much more. I required everyone on our leadership team (our top 3,000 leaders) to read the book before having Sheryl come over to speak. Our challenge was getting the men to lean in, not the women. It’s easy to talk about diversity in the abstract. Once you bring it down to a personal level, attitudes change, and it has to start at the top. In 2015, Sheryl’s husband, Dave Goldberg, died suddenly while they were on vacation. She could have retreated into her grief but instead opened up about the impact of Dave’s death on her and their two young children, once again helping many others facing similar tragedies in their lives. It reinforced the power of sharing our stories, strategies, challenges, and fears and in recognizing how our own behavior is influenced by our life experience. Will that ultimately make it easier to get the kinds of insights to see where the world’s going and connect on both an intellectual and emotional level with your team? I believe the answer is absolutely yes, and great cultures create healthy conversations on strategic issues for your company and the world. LESSONS/REPLICABLE INNOVATION PLAYBOOK Focus on the big picture. Pay attention to broader shifts in technology and the market, especially when they occur at the same time. As you learn to connect the dots, pattern recognition becomes easier. Be curious. Look for ways to data-mine across multiple industries and people. Seek out reliable sources for what’s happening in different markets and adjacent industries. Get outside your comfort zone. Think like a teenager. Your goal is to shake things up and see what others have missed. Try to shed preconceived notions that lead you to familiar conclusions. Treat every customer and every encounter as an opportunity to gather data and learn. Where are they investing and what are they worried about? Look for industry disruptors to understand the market gaps they’ve identified, the threats that are emerging, and the opportunities to disrupt in other areas. Compare and contrast. Are common themes bubbling up? Align what you’re hearing with the data that you see and then make a bold bet. Have the courage to share your concerns and have healthy debates. Open up to your team on both a business and a personal emotional level. Chapter Three (#u619fc447-1b55-5315-b003-e71858c6f92f) DREAM BIG AND BE BOLD…FOCUS ON THE OUTCOME (#u619fc447-1b55-5315-b003-e71858c6f92f) (Play out the Entire Chess Game Before You Make the First Move) (#u619fc447-1b55-5315-b003-e71858c6f92f) I’ve been criticized at numerous times in my career for being too big a dreamer, moving too fast, or being too ambitious in describing what could be achieved. I would argue the opposite. Almost every mistake I’ve made was because I didn’t move fast enough or dream big enough. I have zero regrets about my bold moves, even the ones that failed. My only wish is that I’d made even more and bolder bets, which is what I’m doing now in working with startups and helping their leaders to grow and scale their businesses. As Carlos Dominguez, my former colleague and president of Sprinklr once put it: “You can’t dip your toe in the water with John. You either jump in or you stay out.” He’s right. I don’t believe in half measures. That’s not how you win. One of the biggest mistakes I see people make in business is that they don’t dare to imagine a bold outcome and understand what they need to do to achieve it. Whether you run a coal mine in West Virginia or own a taxicab in New York, you do not get ahead of disruption by making a few iterative moves. You start by disrupting yourself. You establish a bold and inspiring outcome and both anticipate and maximize the conditions to achieve that outcome. It’s a process that I still use today, whether I’m betting on robotic cricket farming to create a versatile mass-market protein to help solve world hunger or investing in technology that provides perimeter protection from drones and other unmanned vehicles. The ability to imagine a bold outcome and set audacious goals to achieve it is not so much a personality trait as a mind-set. Two of the most visionary thinkers I know are John Doerr and Marc Andreessen. Both are legendary venture capitalists: John was an early investor in Amazon and Google, while Marc took a bet on startups likes Facebook and Instagram. Their personalities are quite different. Among other things, Marc is a technologist at heart while John tends to focus more on business outcomes. However, both are big-picture thinkers who want to empower innovators and change the world. They care about issues bigger than their own interests and constantly play out the long-term impact of current trends to figure out what matters most right now—and why. I’ve had an opportunity to watch both of them in action over the years. I started working with John more than 20 years ago when we jointly founded TechNet as a national, bipartisan network of tech leaders to promote policies and initiatives that foster innovation. Both of us realized that Silicon Valley was disorganized when it came to dealing with Washington, which meant we were punching below our weight in terms of having a voice there. Flying in once a year to complain about the various ways in which government is screwing up was not a winning strategy. We needed to engage on a more meaningful long-term level. It’s how John operates with all his portfolio managers, helping them to stay focused on the audacious and achievable goals. Marc takes a similar approach. He is a bold visionary who is not afraid to take on conventional wisdom and even rattle people from time to time. He reached out many years ago during the early days of Netscape. Cisco actually owned the trademark Netscape name at that point, and I gave it to them for free. We had no use for it, and I believe in being generous when I can. Among other things, generosity might one day open the door to a deeper relationship, which it did. (We also owned the iPhone and IOS trademark names but I didn’t just give those away to Steve Jobs at Apple, in part because we were already using them.) I’m now working with both John and Marc through JC2 Ventures, where I can tap their expertise as investors, and they have asked me to help in coaching their CEOs. The goal isn’t to help them set more achievable goals but instead to dream bigger—and then make it happen. Mario Mazzola, one of the greatest entrepreneurs and engineering leaders I have ever known, likes to tease me sometimes by leaning over and, in his baritone Sicilian accent, solemnly offering up a piece of wisdom like, “You know, John, vision and strategy are for the amateurs. Execution is for the professionals.” He’s kidding, of course, or at least half kidding. Mario is one of the most visionary thinkers I’ve met, not to mention one of the most effective in bringing that vision to life. He illustrates what I’m talking about. Not only does Mario think 5 or 10 years ahead when it comes to developing products, he takes a similar long-term view when hiring and managing people. Any time Mario has come to me with a game-changing product idea, he’s already mapped out the resources and timeline needed to get it done, a plan for how to launch and scale it, and an often prescient assessment of the impact it will have on not just the company but the industry as a whole. He’s part of a team that has generated unprecedented innovation for Cisco, creating eight product families across multiple business lines that each generate more than $1 billion in revenue a year. Crescendo Communications, the company that he cofounded with fellow engineers Prem Jain and Luca Cafiero, was Cisco’s first acquisition in 1993. It took the company from selling a single product, the router, into a new line of network devices called switches that became Cisco’s largest business and transformed how we sold to customers. Mario, Prem, Luca, and a brilliant engineer and marketer named Soni Jiandani collectively became known simply as “MPLS”—a play on their first names and a popular networking technique that we helped to develop. The team became legendary for its ability to attract Silicon Valley’s top talent to work on projects that disrupted and then dominated an industry segment. In terms of speed, disruption, and the ability to transform audacious goals into profitable products, MPLS was unbeatable. To compare them to NBA champions is to do them a disservice. When you create products that become market leaders in areas as diverse as switching, storage, servers, and software-defined networking, that’s more like moving between the NBA, NFL, NHL, and Major League Baseball without missing a beat. If we had not acquired Crescendo in 1993, Cisco might not have become the world’s leading network and internet company. We passed up a chance to merge with a bigger, stronger, and better-known company and instead agreed to pay almost $95 million for one that was barely selling $10 million a year. It was a bold bet. Cisco stock took a hit. Many of the board members didn’t like it, either, and I put my job on the line to make it happen. If the deal had fallen through, as it nearly did, I almost certainly would not have stayed on to become Cisco’s next CEO, as planned. I don’t bring this up as proof of my skills in spotting winners, though I’m happy to pretend I have a sixth sense for this stuff. I bet my career on four people I didn’t know and a technology I hadn’t tried because we shared a bold vision for how together we could transform an industry, and I could see they had the talent, brain power, and audacity to achieve those goals. While Mario and I may have different strengths, both of us focus relentlessly on outcomes and try to maximize the conditions for achieving those outcomes. When I take bold bets, I never make rash moves or think in individual transactions. Everything is connected. It’s how my brain works. It also happens to be effective. To me, vision, strategy, and execution are like a chess game—a multidimensional, multiplayer chess game that’s being played with tremendous speed and interdependencies. Before I make a move, I play out the entire game in my head, and then I replay it under different scenarios, forward and backward, in order to anticipate not only my moves but the moves of others in the game. If you do that, you learn to anticipate the hurdles and see different ways to achieve the outcome you want. You also learn to recognize when an outcome is no longer achievable and make a decision to either change your strategy or even to concede the game and move on to another opportunity. To do that, you need to have first played out the game to the end, learn as much as you can about the other possible players to anticipate their actions—your possible countermoves—and build your strategy around the outcome you desire. For Mario and the Crescendo team, this approach also inspired an unusual concept known as the “spin-in.” That’s an independent startup, launched with seed money from Cisco, that would enable the MPLS team to recruit and incentivize top talent to work on a breakthrough technology and turn it into a developed product that would be sold back to Cisco, assuming it was successful. We did this three times, the first one delivering a billion-dollar-a-year product and subsequent ones each delivering multibillion-dollar-a-year products that were transformative for our portfolio and enabled entrance into adjacent markets. Could these products have been developed through the usual research and development channels? Maybe, but I don’t believe the pace would have been as fast or the ambitions as bold. Could Mario, Prem, Luca, and Soni have left to launch their own startup and made much more money? Definitely. Then we might not have had technology focused on filling our needs or first dibs on the results. What mattered to all of us was the outcome. To achieve big dreams, you have to take bold bets and focus on clear outcomes. In the previous chapter, I talked about the power of crowdsourcing multiple data points to get a better picture of patterns and trends. The most powerful source of data for me is always my customers. Further, the most powerful incentive for taking any bet is the customer. If my customer is interested in something new, I immediately become interested, too. Crescendo wasn’t even on my radar until Ford Motor Company started talking about how this little company had developed a “Fast Ethernet” technology that let you send large amounts of data over copper telephone wires at really high speeds. I had never heard of Fast Ethernet, but I knew about switches. These were the devices that connected computers, printers, and servers into a local area network that our more complex routers would then connect to the internet. As technology was evolving and networks became more interconnected, I felt the two product lines would either become more integrated or one would displace the other. A few weeks later, I was with a customer at Boeing who started to talk about the switching technology of the future. “Let me guess,” I said. “Fast Ethernet.” My customer was surprised that I was already aware of the new technology. As with any good sales call, I then asked what we had to do to secure a $10 million order that we were trying to get. It could be mine, the Boeing executive said, if Cisco bought Crescendo and included their technology in the deal. Now, I was really motivated to find out more—and fast. As the signals of a market transition increase, the need to take action becomes more urgent. As I thought about how this race to get scale would end up—essentially writing our own press release on the desired outcome—it became clear to me that acquiring Crescendo would not only break us away from the pack but also serve as the foundation for Cisco’s growth for the next decade. This was a market transition that, if we executed right, would allow us to leave our competitors and even our peers behind, and represented potentially a once-in-a-lifetime chance to lead the industry for the foreseeable future. As networks were becoming more complex, customers were struggling to connect a large number of vendors with different strategies and products that were not designed to work together. Suddenly, we would be able to provide the best router and the best switches, both designed to work together from one vendor. If we did this the right way, it was truly game over, although it clearly would require solid execution to make this vision and strategy work. This was clearly my decision with strong input from other members of the leadership team, one that, if it worked, would make the CEO position a given. If it didn’t, I would be held accountable for the results, as I should be. While this was clearly risky in most people’s opinion, once I’d played out the chess game in my mind, I had no doubt that it would work and was committed to making it happen and leading the industry. Конец ознакомительного фрагмента. Текст предоставлен ООО «ЛитРес». Прочитайте эту книгу целиком, купив полную легальную версию (https://www.litres.ru/john-chambers-2/connecting-the-dots-leadership-lessons-in-a-start-up-world/?lfrom=688855901) на ЛитРес. Безопасно оплатить книгу можно банковской картой Visa, MasterCard, Maestro, со счета мобильного телефона, с платежного терминала, в салоне МТС или Связной, через PayPal, WebMoney, Яндекс.Деньги, QIWI Кошелек, бонусными картами или другим удобным Вам способом.