Saturday, August 11, 2007
Why I'm Sick of John Chambers, Cisco CEO
John Chambers has enjoyed considerable exposure, some might say over-exposure, this week.
First, he was the subject of a warm and fuzzy, fawning interview by The Wall Street Journal on Tuesday. Gliding over Cisco's meltdown during the tech bubble-bursting and subsequent disastrous performance, the Journal had the sense of an advertising-driven entity to stay away from even remotely being perceived as focusing on that period in the company's past.
Instead, it lionized Chambers and his firm for its many acquisitions and prior growth. Then, it allowed the Cisco CEO to claim that his firm was about to march into consumer electronics, showing everyone 'how it's done,' so to speak.
Chambers' 'five tips' for running a technology firm smack of managerial basics: catch market transitions in a timely manner; offer differentiated products in new markets; focus on customer needs and wants; have good leaders in your firm, and; innovate.
Gee, thanks John. I'd never had guessed at any of those key strengths of any successful growth firm.
But that's not the best of John Chambers this week.
I caught his appearance one morning on CNBC. As a CEO, the on-air-head anchors naturally expected Chambers to have credible answers on questions like the sub-prime mortgage market turmoil. So they asked him for his opinion.
To my horror, unlike President Bush, who deflected an economic question at his press conference this week with the clear notice that he is not a trained economist, Chambers went ahead and pompously pontificated on the condition of that highly esoteric debt market.
Thanks again, John. Why bother listening to observers with real market experience who might have informed insights on this recent area of financial concern? Instead, let's go ask someone from an entirely different sector.
I'm rapidly tiring of seeing Chambers pop up everywhere. With me, at least, his credibility and my respect for him took a big hit when he failed to simply pass on the sub-prime mortgage question, noting that he has absolutely no basis to make any informed remarks not available from any other observer also not active in that market.
For Cisco's shareholders' sakes, let's hope Chambers has better judgment running their firm than he does talking about management practicies and debt markets.
As the Yahoo-sourced chart nearby shows, while Cisco has outperformed the S&P over the past five years, this wasn't the case as recently as early last year. The firm's performance has been erratic, leveling off once again early this year, and sustaining a long period of decline during 2004 and 2005.