Contrast To Cisco And Chambers example essay topic

Only a few years ago, Cisco Systems was a struggling company who only the technologically educated had heard of. Today, Cisco Systems ranks as the number one or two company in most Internet technology. Anyone using the Internet today, will use one area or another of Cisco Systems. The driving force behind Cisco is their visionary CEO, John Chambers. How does a man who is dyslexic and doesn't understand much of the technology his company makes become so successful in the Internet age? He believes in empowering his employees and surrounds himself with people who do have the technical knowledge.

Chambers believes in acquiring companies at an alarming rate to either acquire new technologies or the teams of people who are developing the new technologies. This saves Cisco money and time allowing it to lead the way in the Internet world instead of playing catch up. Chambers also believes in education as a major player in the future success of not only his company, but for the entire country. His vision of doing it first, before the competition, has built Cisco Systems into the giant of the information technology field it is today. Chambers wants Cisco to be the number one or number two company in any area they compete in. If that is not possible, Cisco will not compete in that area.

John Chambers took over as CEO of Cisco Systems in 1995. Since his rise to power, Cisco has sustained a growth rate 100% per year. One of the reasons for this growth is the kind of people Chambers keeps himself surrounded with. One example of this is Howard Charney, a senior vice-president at Cisco.

Charney could be a CEO at another company if he wanted to be. He was co-inventor of the Ethernet and then founded the first 100 megabit-per-second Etehrnet company. Charney later sold the company to Cisco and stayed on with the company. He says he stays because Chambers treats him as an equal and not as an employee. Chambers asks the advice of his officers instead of dictating to them and that is one reason they stay with the company instead of leaving for the competition. Many of the officers at Cisco have worked for other profitable companies in the information technologies field such as Wang, 3 Com, etc.

This experience coupled with Chambers' vision of being the company in the lead helps Cisco stay in the forefront of technology. Chambers believes heavily that company success is directly a result of customer satisfaction. He is a leader in the customer relations department and does a lot of this through team building. Employees at Cisco are rewarded based on customer satisfaction. This is an old fashioned idea brought into the age of technology. Chambers uses the hands-on approach to customer satisfaction.

Cisco has over 100,000 customers world wide. He gives his private office telephone number to customers so they can contact him directly if they have a problem needing his attention. In today's business world, this approach is almost unheard of and is one of the many reasons Cisco is the number two company in the industry. The only company ahead of Cisco is General Electric and Chambers has his eye on some of GE's market share too. Chambers' philosophy centers around staying ahead of the competition and when that fails, buy the competition out. Chambers correctly feels that if the competition catches up with the company, the competitive advantage is lost.

When this happens to Cisco, Chambers moves on to new directions or new technology. He admits that the constant change is difficult but it is necessary in today's high tech business environment. Another reason Chambers is so successful is his ideal of customer service and satisfaction. Chambers personally reviews the results of fifteen to twenty critical accounts each night.

These accounts are marked as troubled or needing special attention from management. Most companies assign this task to a vice-present or department manager and this attention to customer service makes Cisco stand out among the competition. Chambers's style of leadership is centered around the principle of understanding the customer. This principle does not only apply to external customers but also the internal customers. Chambers says one of the successes of Cisco is that everyone in the company knows who their customer is.

As a reward for outstanding job performance, employees can receive stock options. Forty-two percent of the stock options given out by the company were given to non-managers. This percentage is much higher than other companies in the information technologies field. Some of Cisco's successes have come as pure luck.

One such program is the Networking Academy. Cisco was attempting to sell networking equipment to a school system in Arizona but was running into a problem because the school system did not have the funds to maintain the system. A salesman from Cisco suggested that the students be taught how to keep the system running. This launched the Networking Academy which is in place in all fifty states and sixty countries. High school students who take part in the academy can get jobs paying in the $50,000.00 range right after graduating from high school.

The Academies also give Cisco and other companies a cheaper pool to choose employees from and insures Cisco technology will be used and maintained in the field. In contrast to Cisco and Chambers are Lazard and Michael David-Weill. David-Weill is the CEO of Lazard LLC, which is an international private financial empire based in France. David-Weill is the CEO of the corporation but is being challenged by current and former employees for the leadership of the corporation.

Lazard is actually a number of corporations and David-Weill is in charge of a few of them. David-Weill is attempting to keep his corporation from going public and keeping the power where he thinks it belongs, with him. He exemplifies the non charismatic leadership style. Lazard is a century old financial company, which has been run by the same families its entire life. David-Weill took over the company eighteen years ago and has not looked back since.

He has treated minority shareholders and employees with contempt and is in danger of losing his empire. At one meeting of the partners, he went around the table telling each of the men that he didn't need them to keep the company going. At the company's 150th birthday celebration, he refused to acknowledge two powerful allies who had helped him further the company and increase profits. A third example of his apparent contempt for anyone but himself is a meeting where he kept blowing cigar smoke in the face of two powerful investors who were in his office. All of these examples have lead to a dissection in the ranks and pressure from the outside to break up the financial empire. David-Weill has surrounded himself with powerful allies who are after the same things he is, more profit and money.

He has combined three of his international operations under one ruler, himself. He refuses to entrust the power to anyone in the company and has created power groups that are loyal to him. He has lost many employees in high power position including his son-in-law who almost went to court against David-Weill saying his compensation package was not what it was promised to be. David-Weill rules Lazard like a king rules a country. He appears to think that his leadership of the company is a god given right and he has to answer to no one. The people who are trying to take over the company say the David-Weill is not progressing into the future and is living in the past.

They want to move Lazard ahead and bring the company public. David-Weill says he will not do that and has surrounded himself with employees who will help him run the company the way he wants to. There are attempts by former employees and competitors to purchase parts of companies who own parts of Lazard so they can have a say in the operation of the company, but so far these attempts have not been successful. These two CEOs show the great contrast of organizational behavior in today's marketplace. Chambers empowers his employees to think for themselves and make decision. His leadership style is lead by example to be successful.

David-Weill does not let his employees make decisions for themselves. He makes the decisions and the employees must carry them out. He empowers no one and has everyone report to him. I do not believe Lazard can sustain an onslaught of pressure from the outside. David-Weill may be able to control or fire current employees but he cannot control the people who are buying shares in companies that own parts of Lazard. It will be interesting to see who will end up with the Lazard Empire in the next few years.

Bibliography

Robert X. Cringely. "The Best CEOs" Worth, May 2000: 126-130 Elizabeth Corcoran.
The E Gang" Forbes, July 24, 2000: 146,156-157 Ron In sana.
The King of the Net" Money, Tech 2000: 43 - 46 Robert Letzner and Michael M aiello.
Assault on the House of Lazard" Forbes, September 4, 2000: 98-104.