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technology

Harnessing the power of evolution

Cisco General Counsel Mark Chandler finds opportunity in constant change.

Silicon Valley is the heart of the technology community. It’s transformed over the last several decades, leading the world with rapid-fire developments in cognitive computing, cybersecurity, connectivity and new business models. And, through it all, Cisco has been at the center of this activity. Recently, Thomson Reuters Global Business Director Asif Alam sat down with Cisco General Counsel Mark Chandler and talked about transformation, innovation and the impact of changing tax laws.

Asif Alam: How has your role of General Counsel changed over time?

Mark Chandler: The principal change I’ve seen in the Valley in the last 30 years has been a change from the general counsel as an adjunct to leadership that outside counsel once provided to a role that’s much more integrally related in the business, where the function really is a part of the business decision making with a team of people that are capable of executing in almost every area where legal help can be provided.

And I say “legal help” rather than “legal issues” because a lot of the time when you’re involved in providing business counseling and assistance, and effective execution is related to solving business problems or exploiting business opportunities rather than dealing with legal issues per se.

Alam: It seems the culture of innovation is always flourishing at Cisco. What is your secret sauce?

Chandler: For innovation to flourish, you need to have an environment that allows engineers to think outside the box. That’s so cliché but true in the sense that they are sometimes a little quirky, and you have to let people run in directions that may not be expected if you’re going to get the results you want.

Second, we have had the good fortune to be in a position to acquire a lot of companies – more than 200 to date. And every time we acquire a company, we bring in new people with new energy who’ve gone out and created something from scratch, and you have to nurture that.

For instance, we’ve created something called the Founders Forum to keep the people who’ve founded companies engaged in telling us what’s going well and what’s not. It’s very easy, and we’ve certainly learned from mistakes in the past of undermining the business model of a company that we acquired by telling people, “Well, no, you have to do it the Cisco way.”

You buy companies because they know how to do things and they’ve invented things that you don’t know how to do or you didn’t know how to invent. And you have to protect that, because that’s really what you were buying. Fortunately, we have a culture that promotes that. We created structures like Founders Forum that allow for a very strong, unified voice on some of the issues that can come up.

Alam: One thing I’m fascinated about is Cisco’s transformation. Can you describe the transformation the company has gone through over the years?

Chandler: Transformation is a constant in the tech industry. Technology is moving very, very quickly in the space where we play, and for that reason you have to constantly be on your toes. When people think of transformation they tend to think it has a beginning and an end; either you have turned into a butterfly all of a sudden or something else.

It’s really not like that; it’s continual, and it will continue for the foreseeable future. If you don’t like change and you don’t find it really exciting to have to always be on your feet, figuring out how to stay ahead of things, this isn’t the right place for you. I happen to love it.

Right now what’s going on is a real change in the way people consume information technology and the way they get value from it. Twenty years ago we delivered value to our customers by helping internal IT staffs manage email, messaging services and some Web commerce, helping them build an infrastructure inside their systems that could connect to the global Internet to make those things happen.

Today we need to be nimble enough to help people work in a multi-cloud environment, to have security from end to end and to know they’re going to have a consistent security visibility, whether they’re using a public cloud service from one of the large public cloud providers, all the way to the infrastructure that they have on their own sites.

We need to be able to make it simple for them to deploy and provision their networks, and give them analytics across that platform, whether it’s on their premises or in the cloud. Answering the question, “How are all my applications working?”, whether those applications are sitting in a cloud environment or sitting on premises.

As we look across that, we want people to be able to work better together. We want to drive a better employee experience. We want to change the way networking works, allowing people to deploy new services and extend what they’re already doing.

Transformation is a question of always thinking about how we provide value to customers given the best technology that’s out there, how we change what we do quickly to stay ahead of that marketplace. We want customers to look to us and say if I’m working with Cisco, I know I’m going to be providing the best services I can to my employees and customers, and creating the best value for my shareholders.

Alam:  We see transformation and evolution taking place in many ways. One thing that is happening is around the tax laws that may change, and I see that also as a transformation. One may argue good or bad, but how is Cisco working through the tax transformation taking place?

Chandler: That’s a really great example of needing to stay ahead of things. I don’t think this tax legislation that’s enacted in the United States now changes the overall total amount of taxes that we pay in a material way given where we were before, but what it does do is free up the ability to do capital allocation in more rational ways and it changes the incentives to do things in one way or another.

As our business changes and we become more driven by subscription services and recurring revenue – which is what our customers and investors want – we have to look ahead and say, what have we been doing in business model that partly was in response to tax considerations? What can we change in that? What can we now free up because of a new tax environment that allows us to be much more aggressive in meeting our customers’ needs?

As the leader of the legal organization, I work very closely with our tax team to take advantage of these opportunities. Instead of looking back to structures that were built with different legal considerations, I can say, great, now we have a new world, how can I deliver value in that way? I want to be one step ahead of where my customers and my salespeople are so that our organization is never a reason that things are slowed down. I view our legal organization as a business accelerator.


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Learn more about The New Tech Imperative and sign up for our technology newsletter on the Technology Practice Group website.

Explore Thomson Reuters solutions for Technology Companies and watch author Asif Alam speak with Cisco’s Mark Chandler about the changing technology field.

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