Identifying Cisco’s Next-Generation Leader

By Roderick C. McGeary, Cisco Board Member and Chair, Compensation and Management Development Committee, and Francine Katsoudas, Senior Vice President and Chief Human Resources Officer

Cisco CEO John Chambers has consistently said that the next time we would talk about CEO succession would be when a successor is announced. Today is that day, and we are proud that Chuck Robbins has been appointed Cisco’s next CEO.

Over the past 16 months, Cisco’s Compensation and Management Development Committee and Board of Directors have been focused on the succession process for one of the most dynamic, respected, and longest-tenured CEOs in the tech industry.

For almost a decade, we have led robust succession planning and leadership planning for all of our critical roles. And, as a result, since John Chambers has been CEO, we’ve managed numerous successions seamlessly, including our CFO transition last fall.

The board initiated the formal CEO succession process in January, 2014, knowing that the transition would occur at some point in the following couple of years. Early in this process, we adopted five key principles to guide our approach and decisions:

Execute a transition that is thorough, strategic, well managed and, in hindsight, highly successful.

Establish clear criteria that will define a successful CEO for the next decade and beyond.

Assess and develop the leaders who will play key roles during the CEO transition and beyond.

Lead a highly confidential process that minimizes the distractions to the business and is fair and respectful to all candidates.

Given the speed of disruption in our industry, select a candidate who can both execute in the short term as well as drive a dynamic vision and strategy for the next decade.

Managing The Succession Process

Rod McGeary, Cisco Board Member and Chair, Cisco’s Compensation and Management Development Committee

Early on, the Board of Directors delegated the process design and monitoring to the Compensation and Management Development Committee, with regular reporting and discussion at each board meeting. As I initiated our process, together with my fellow Committee members—Carol Bartz, Michele Burns and Brian Halla—we developed a comprehensive profile of the required characteristics, experience and personality traits for Cisco’s next CEO, one who can execute successfully today and thrive in the future against a backdrop of rapid change and disruption.

We retained leading global executive search firm Spencer Stuart to provide an independent view on our process as well as the individual candidates. We asked them to identify and evaluate a pool of external candidates and interview each internal candidate to benchmark them against the external pool. They served as a strategic sounding board in the process, including joining us for final evaluations and discussions.

As we worked through the process over the last year, we developed a deeper understanding of what Cisco needs for its next chapter and the strengths of the top candidates. While we considered external candidates throughout the process, we grew increasingly comfortable that we had several very strong internal CEO candidates and that an internal candidate likely had the best chance of success, given the speed with which the new leader would need to move.

Identifying and Vetting Candidates

Fran Katsoudas, Chief Human Resources Officer

From the onset, John Chambers was clear that his role was to develop and present world-class succession candidates. He trusted the board to pick the right leader for Cisco.

Early in the process, we kicked off robust leadership assessments and 360-degree reviews of the top leaders of the company. We came out of these assessments with clear insights on the leadership potential, strengths, development areas and broader leadership support of each leader and the role they might play in the future leadership team. This data not only helped inform who our leading CEO candidates would be, but also how the broader leadership team would evolve.

After reviewing the internal candidates and assessing a very impressive external slate, the board narrowed the list to a few top candidates. Every one of Cisco’s nine independent board members conducted formal one-on-one multi-hour interviews with each of the internal candidates. The candidates also provided—in writing—their vision for the company and how they would execute their vision as CEO.

In March of 2015, the board held a multi-day offsite meeting where the leading candidates were asked to present their future vision for the company and how they would execute their vision as CEO, and the external slate was narrowed further.

The Decision

Rod McGeary, Cisco Board Member and Chair, Cisco’s Compensation and Management Development Committee

The board debriefed on the process, the interviews, the internal candidate presentations, and the external candidates. Despite the diverse backgrounds of our board members, there was an incredible and almost surprising alignment and understanding of each candidate.

Our straw vote, which was conducted by secret ballot to test initial sentiment before more formal discussion, was unanimous in our view of the strongest internal candidate. Over the following weeks, we benchmarked once again with our top internal and external candidates and concluded, again with unanimity, that we had the right candidate within Cisco. The board voted on Friday, May 1, to select Chuck Robbins as the next CEO. Chuck embodies all the characteristics and traits we had outlined initially for the ideal Cisco CEO. Taken together, his authentic leadership, cultural fit, technical acumen, and vision for Cisco, set Chuck apart from the balance of the candidates, both externally and internally.

Moving Forward

As our next CEO, Chuck will both accelerate what makes Cisco an undeniably great company and also drive the transformation to carry the company to a whole new level. Chuck has the full confidence and trust of the Cisco Board as we enter this next chapter.