Executive Summary
Doing Both is written by the Senior Vice President of Strategy and Planning for Cisco, Inder Sidhu. Cisco is the world leader in Internet networking. The book focuses on how to balance multiple goals or objectives simultaneously; do not forfeit one for another. He gives examples of how companies have been able to create that balance in which it lead them to succeed and how other companies have struggled with the balance and those companies have continued to struggle to stay in business.
One type of balance that needs to be created is in innovation. There is sustainable innovation which is a continuation on what already exists, and then there is disruptive which the creation of something is new. A company should continue to enhance what they already have on the market but at the same time they must create something new in order to compete in the market.
Business models are an important part of how to approach and conduct business. One business model may not fit all situations and opportunities therefore a company may need to adjust their present model or create a new one. This is sometimes a lesson learned by companies because they attempt to enter a new market but are not successful since their current product offerings do not fit the needs of the market. Cisco had attempted to have their business model for professional fit into a market for general consumers. What they found is that the consumers could not afford the products and the features were too complex for their needs. Cisco in return created a new business model to fit the market that they were trying to enter being that the market offered great potential for the business.
Balancing the teams goals with individual responsibilities allow for a successful project. The team’s goals should match those of the organization and should be superior to individual goals. Individual responsibility is important because this is the chance for the individual to show what they have to offer and to create ideas that challenge what already exists. The individual should actively participate with the team to fulfill the goals.
The key is to find a way to find balance. If there are multiple great ways, the cost of letting one go can be extremely costly. If a company is willing to put the extra effort into finding a solution that involves both, a solution will be found.
The Ten Things Managers Need to Know fromDoing Both
1. Create a balance. Do not forfeit one objective to accept another; find a solution that allows for both objectives to be a part of the goal.
2. Innovate. Continue to innovate on what already exists while simultaneously having disruptive innovation. The disruptive innovation is creating products that change existing markets or create new ones.
3. Do not be afraid to create a new business model or to use a model created by someone else. If one desires to emerge into a new market, a new model may be required. The change does not make the original model a bad one but rather the model does not fit the particular objective being sought after.
4. Learn from the mistakes. Mistakes are guidance of what to do or not to due in the future. Some of these mistakes may be of your own but one can also become educated by learning from others mistakes.
5. Allow employees to have some flexibility so that so they can make a quick but educated decision in order to be more productive. This also helps make that employee have responsibility which can boost morale. By not making customer wait for an answer or action, that will boost the customers experience as well.
6. Focusing on what matters to the customers allows for a company to create products that fit their needs and desires. By doing this, it creates value in those products.
7. Collaboration technology can increase productivity since communication will be more interactive allow for better coordination between those involved. People are able to connect regardless of time and distance.
8. Look for inspiration. When seeking a new way of doing something, look at successful companies because they may have the solution. The culture and goals of a company can also be inspired by what others have done.
9. Successful projects are done by working closely with a team while also having individual responsibilities. A company should encourage individuals to challenge themselves and the existing business.
10. Have a vision, strategy, and an execution plan in place. Everyone needs to be aware and understand what each of these mean for the company. They also need to be incorporated in daily operations. The culture of the company should complement the vision, strategy, a execution style.
Full Summary of Doing Both
Inspiration & Balance
Inspiration to create wonders can come from anywhere. The Golden Gate Bridge is a great example of this. A man wrote an editorial about the irritation of commuting by overcrowded ferries; he wanted a better way to connect San Francisco and Marin County. This editorial inspired engineer Joseph Strauss to gather a team of experts to turn this vision into a proposed plan. The team created a balance in between strength and architectural beauty. This bridge was then the inspiration for a San Francisco business’s name, logo, and goals. This has given the image to this worldwide known name, Cisco, which allows people to connect and collaborate over a network. Their name was created by a shortened version of the great place they were located, San Francisco. Their logo resembles the bridge, they chose this because the bridge connected people across water and they do the same over a network. Then the goal of creating a balance by “doing both” rather than “trade-off” when making decisions became part of their culture. By having the mentality that it is possible to accomplish both objectives, it eliminates the poor decisions that may eliminate important objectives. This is the reason Cisco has had the opportunity to prosper into the company it is today.
Innovation
Innovation is vital for companies to be able continue to stay in business and be an industry leader. There is sustainable innovation which is to enhance what already exists. The production process may become more efficient, lower costs to produce, and create a better product. This is preferred by investors and employees when compared to disruptive innovation because it bears less risk and has more stability. Disruptive innovation is created by going into unfamiliar territory, the creation of something new. A company may create new products or services that create a new market or change an existing one into something different. If one is able to continue to enhance what they already have and create something new, this allows for continuous long term success. Trying to balance sustainable and disruptive innovation is a common struggle for many companies. However, Proctor & Gamble have been successful at balancing both types of innovation. This is due to the investment they place on a wide range of technology in order to innovate in many categories and brand names. Since Cisco believes innovation is important, they have created the Cisco Development Organization. What they have noticed is sustaining innovation captures the consumers from rivals while creating loyalty from their consumers.
Cisco’s Innovation
Cisco created technology that changed how communication and collaboration took place. They began to become a strong force that slipped away from disruptive technology and focused on improvements. They later began to notice their lack of disruptive innovation and wanted to change that. They began looking into various companies to make acquisitions with. Part of this process was to look at the unique attributes the company could offer, how good of a leadership team exists, and the culture of that company. This was a risky and expensive approach to acquisitions so they sought a different way. Cisco found the approach of spin-in as a way to create an acquisition. Since the 1990s, they would invest into a company and provide additional resources when necessary in order for that company to pursue the ideas. There needed to a desire for the product and predict an increase in revenue. Bruce Caldwell stated “the advantage of a spin-in is that you can jointly develop well-integrated products by closely sharing your technology, expertise, and product roadmaps. The acquired technologies of a spin-in become part of Cisco’s technology architecture in a much shorter time than with traditional acquisition price to product revenues and the margins associated with those revenues. This results-oriented approach avoids the typical challenges of estimating the value of an acquisition. “(Sidhu, 19) One example of spin-in put to use was with Andiamo that allowed for storage devices to be over networks and later virtualized data centers. In order for Cisco to take on internal disruptive innovation, the Emerging Technology Group was created, which is a small part of the Development Organization. They would pursue start ups, focus on markets rather than a specific product, and looked at the details of what a consumer would experience with product use. The leadership team of this group was also unique; they sought individualistic, rebellious individuals that would go after new ideas. In order for an idea to be put into place it must pass six steps.
Six Steps to Evaluate a Disruptive Innovation Idea
First the idea must be found. This can be anywhere from universities to venturing capitalist. Next the idea is filtered in which they decide what actions to take. Incubate is where the unit is formed; this is when there is great evaluation and adjustments are made. If the idea passes incubate, it is then initiated into new emerging technologies. The fifth step would be to accelerate into one segment. The final step would be to eliminate the idea if it did not fulfill expectations or to graduate the idea. By having process like this in place for ideas, it allows for a more educated decision to put it on the market which leads to a better chance of success.
Various Ways to Pursue Innovation
When deciding which route to take on how to accomplish the goal of disruptive innovation, the individual situation must be evaluated. First one must look at which resources are available, what goals are to be accomplished, and how closely the innovation should be related to the core company. If the core company has the expertise available and technology that is close to the new one, developing would be the internal path to go. Incubate should be used if the new innovation is close to the core company but desires different technology. A spin-in can be used for external innovation striving for flexibility, secrecy, and a break away from the core business. Acquiring also has flexibility but there is expertise and/or market share by the acquired company. So before deciding which path to take, the goals of the company must be established.
Business Models
Creating a new business model can be a difficult task. For those that are able to create multiple business models, many struggles exist in finding a way to balance all of them Disney is one of the few that have been successful with this. Disney does not have much competition that is as diversified as they are. Cisco has found success and hardships business models. They had a business model that offered expensive products geared to professionals but attempted to use that same model to the consumer market. This was not successful because the consumer market could not afford the products and the product did not fit their needs. They tried various approaches to attempt to attain this large market, many of which failed. As a result, Cisco did have some success taking a business model from elsewhere that had been successful. When a business model does not exist to fit the opportunity, Cisco will create a new model. “Cisco has positioned itself to be as nimble as it is strong and as flexible as it is precise.” (Sidhu, 55) Cisco has generated over billion by creating new business models in order to succeed in 4 markets. This success is a result of the leaders becoming open-minded in order to find a way to enter the markets.
Learning from Mistakes
Cisco has learned from a mistake that cost them two billion dollars. They wanted to create more factories in order to keep up with demands They began to outsource many of the manufacturing jobs which they later realized was a poor decisions because that made the company vulnerable. Then there was a bubble burst that sent the company downhill. The demand for their products drastically dropped. The leaders became so caught up in the growth that they did not think about the possible future flaws such as the typical bursts that typically follow thriving times. So in order to Cisco to move forward, they closely studied all aspects of the supply chain in order to see exactly what happened. What they found was that the various departments within the company were focused on their own objectives without having much consideration for the other departments or the benefit as a whole for the company. Another problem was that departments were able to go over their budget because in their minds the additional resources would lead to growth. Cisco began to improve their supply chain; they made decisions that would allow them to stay in control of their investments rather than becoming vulnerable again. Downsizing the amount of suppliers was something else that needed to be done; this eliminated over a thousand supplier relationships. By having fewer suppliers, they are now able to closely work with these companies manufacturing. This was not an easy task, especially when requesting that they begin to manufacture based on the orders of customers rather than making products to set in a warehouse until demanded by consumers. It was also important to create harmony within the organization too; this is where they changed their process to improve forecasting accuracy while having all aspects of the business align. This greatly changed the culture of Cisco which was not an easy task. The hard work paid off which is seen today with the supply chain using less than half the people it did while earning double the revenue.
Satisfy Customer
In order to have long-term success, one must have satisfied customers along with partners to help satisfy those needs. This can be challenging but what needs to be kept in mind is that there needs to be a strategy that benefits all involved in order to create loyalty while still being profitable. Cisco has created the loyalty by taking their customers in as family and by making sacrifices for their customers. They also provide flexibility to the sales reps and support personnel so they can make quick decisions to fit the situations that may arise.
Importance of Partners
Cisco believes in having the right partner for each opportunity that comes along. Creating good relationships with partners allow for a company to go to those partners when problems arise. More business also goes through partners than the business would acquire on their own. Cisco created the value approach gave partners of all sizes to compete. They wanted their partners to take on the customers technological challenges, be very knowledgeable about the market, have skilled workforce, and/or have access to important customers. Cisco uses performance incentive programs to reward those that take these approaches; it was a better approach than discounts.
Doing What Matters
By listening to what customers want or desire, a company can create products to fulfill those needs. A product may have features that the consumer does not care about, so if a company knows that, they can save money by not adding that feature. If a consumer does not see value in a feature, the will not be willing to pay it. By doing what matters, a company creates products that are being desired rather than guessing what the consumer wants.
Collaboration
Collaboration technology allows people to become connected regardless if they are separated by time or distance. This technology allows from them to interact with one another in order to achieve tasks. It also reduces costs and increases customer satisfaction through customer services. It allows for an increase in productivity through agility which in return gives the company a competitive advantage.
Team Involvement
Team involvement is essential for a projects success. The ideas and perspectives of many will allow for more successful and accepted ideas. Individual responsibilities are also important because this is the opportunity for the individual to show what they have to offer. It is also the time to create ideas that challenge what already exists in order to move forward. Companies should encourage employees challenge what exists and to work closely with the team in order to work towards the companies objectives.
Having a Vision, Strategy, and Execution in Place
Cisco defines their vision as a “3 to 5 year value proposition Cisco will deliver to customers, based on market transitions. It answers a simple question: What is the end result we want to accomplish? Its time horizon is typically 5 years or more. (Sidhu, 163) The strategy focuses on the attributes and actions that will be taken in order to them to differentiate their products and services; this usually takes 2 to 4 years. The execution is the series of activities that will measure and follow through with the objectives in the strategy.
The Video Lounge
http://www.youtube.com/watch?v=5UAK0TrTVtM
This is an interview with the author, Inder Sidhu. He gives examples of successful businesses that apply the same concepts that Cisco uses to succeed. He gives a glimpse into what the book is about.
Personal Insights
I believe that Inder Sidhu has done a great job with the composition of this book. He has given great real life examples of how “doing both” is a better option than sacrificing important goals and objectives. His advice is very important especially with the increase in competition. When several important objectives exist, a company should find a way to integrate all the objectives in order for them to complement one another. This gives inspiration and guidance to leaders by educating them on how success has been achieved by powerful companies such as Cisco.
Reading this book made me think differently about the topic in these ways:
1. That there does not need to be compromise but rather a plan that incorporate the best of both worlds.
2. Innovation is more crucial than many believe. It must be a continuous activity in order to become and stay an industry leader. It is also essential to the long term growth of a company.
3. It is not always a bad thing to copy what another company has created and been successful with. If a company has had a culture or organizational structure that has allowed it to benefit, making your company similar to that is not bad. Also if there is a strategy that works for someone else and you cannot find one, that same strategy may be the solution to your problem.
I’ll apply what I’ve learned in this book in my career by:
1. Understanding that decisions do not have to be based on one way or another but that multiple options may be pursued simultaneously. Doing both is always an option if one places effort in finding a solution to accomplish the various options.
2. Learning to be more observant and finding inspiration. There are many companies that have been successful and continue to lead the path to the future; by observing what has made them successful can aid in promoting ones business to become more successful.
3. Risk can lead to great rewards. Prior to taking on a great risk, one must carefully evaluate the situation and the possible outcomes.
Here is a sampling of what others have said about the book and its author:
“Years ago a very wise person taught me that by changing my frame of reference from “either/or” to “both/and” I could find creative solutions to the challenges I was facing in life. Work hard AND exercise. Make time for your old golf pals AND your wife. Think expansively, give your all, and discover that you’re capable of accomplishing much more than you once thought possible.
Inder Sidhu, as wise a corporate executive as you will find in Silicon Valley, imparts a similar wisdom in this concise but rich history of Cisco Systems and its phenomenal success. Sidhu’s surprising thesis is that great companies like Cisco simply refuse to settle. They don’t compromise on innovation to become more efficient. Nor do they let quality or customer service lag in order to make their numbers. Instead, they foster a culture in which being good isn’t good enough and leaders are encouraged, if not exepcted to pursue transformational as opposed to merely incremental improvements. Cisco is able to “Do Both” Sidhu demonstrates, by asking more of its always-connected employees, but it also gives those same employees more in the form of flexible hours and a win-win culture in which people trust one another to produce superior results. His case studies of Cisco successes in areas ranging from Engineering to Manufacturing to Marketing should be required reading at any company that is ready to think big.” (Cohen)
“Inder begins with sharing how Cisco’s TelePresence video conferencing technology has enabled him to see, hear and almost feel his mother’s presence who is 8,000 miles away back home in India. The intro is touching and a friendly reminder of how technology has changed our lives in many ways and most importantly how we stay in touch and always connected.
Inder takes you through the various steps that Cisco has taken to grow to a billion dollar company with over 60,000 employees. Its an interesting read as Inder walks through the history and the strategic decisions made to remain competitive through innovation and bold moves. Inspired by the stories of the background of the leaders chosen, the difficult questions and challenges faced and their paths take to success.
Doing Both is an interesting and inspiring read.
The various reviews that I have found have been very positive. Many have found the information to be reliable and helpful. The book allowed it readers to stay engaged and to easily understand the concepts being discussed. Many reviewers also note that the book gave them inspiration and insight into not only business but also into life itself. This is a highly recommended book to read.” (Fleming)
Bibliography
Cohen, Jonathan. (2010, June 24). Amazon. Retrieved from http://www.amazon.com/Doing-Both-Captures-Todays-Tomorrows/dp/0137083645
Fleming, K. (2010, June 24). Amazon. Retrieved from http://www.amazon.com/Doing-Both-Captures-Todays-Tomorrows/dp/0137083645
Sidhu, Inder. (2010). Doing Both: How Cisco Captures Today’s Profit and Drives Tomorrow’s Growth. Upper Saddle River, NJ: Pearson.
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Contact Info: To contact the author of this “Summary and Review of Dong Both,” please email Bryanne7680@aol.com.
Biography
David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:
Management Concepts (http://toptenmanagement.blogspot.com/)
Book Reviews (http://wyld-about-books.blogspot.com/) and
Travel and International Foods (http://wyld-about-food.blogspot.com/).
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Written by David Wyld
Professor of Management, Southeastern Louisiana University
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