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Source ISBN: 9780008297039

Ebook Edition © October 2018 ISBN: 9780008297060

Version 2018-09-13

Cover

Title Page

Dedication

Introduction

I The Connected Leader (The Mindset for Leadership Success)

Chapter One The Lessons of West Virginia (Disrupt, or Be Disrupted)

Chapter Two Act Like a Teenager and Think Like a Dyslexic (How to Spot Market Transitions)

Chapter Three Dream Big and Be Bold…Focus on the Outcome (Play out the Entire Chess Game Before You Make the First Move)

II The Connected Company (The Playbook for Corporate Success)

Chapter Four Embrace Your Purpose, Not Your Products (How Cisco Beat Its Competitors)

Chapter Five After Disaster Strikes (Setbacks Can Make You Stronger)

Chapter Six My Buyer’s Guide to Successful Acquisitions (Based on 180 Personal Experiences)

III Connecting with Customers (The Playbook for Shared Success)

Chapter Seven Build Relationships for Life (Sell People Only What They Need)

Chapter Eight How to Build a Winning Team (Focus on Culture, Diversity, and Results)

Chapter Nine Get Your Message Out (With or Without the Media)

IV Connecting Beyond Borders (The Playbook for a Startup World)

Chapter Ten Bet on Innovative Leadership (How to Partner with Great Leaders)

Chapter Eleven What Entrepreneurs Want to Know (13 Typical Questions)

Chapter Twelve It’s All About Startups, Startup Nations, and a Startup World (My Next Chapter and Changing the World…JC2 Ventures)

Chapter Thirteen Reinvent Yourself (What’s Next for Me—and All of Us)

Acknowledgments

Praise for Connecting the Dots

List of Searchable Terms

About the Publisher

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

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.

THE CONNECTED LEADER (THE MINDSET FOR LEADERSHIP SUCCESS)

Chapter One

THE LESSONS OF WEST VIRGINIA

(Disrupt, or Be Disrupted)

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.

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