Cisco explains why UK businesses are failing (which is a bit awkward)

Written as editor of the New Statesman’s NS Tech and first published here.

Another day, another report that says many businesses have the wrong culture, leadership and skills to do digital transformation.

According to Cisco’s survey of 3,000 workers from UK businesses, almost one in three businesses are still “not bringing in digital technologies”.

Only a quarter of responders were confident in how well the board was doing on this, while 29 per cent said their leaders were struggling to implement new, digitally-powered ways of working.

Speaking to NS Tech, Cisco’s UK CEO Phil Smith, said: “Many companies in the UK don’t have anything other than a very basic website.

“It comes down to skills in some form, whether that’s management, change management, an inability to adapt or be as diligent as they need to be for a rapidly changing world.

“We know there’s a huge gap in productivity but some businesses have decided people just have to work harder, rather than smarter.”

Borrowing from a few big consumer tech ideas, without presumably wanting to scare people, he reckons the sharing economy has something to teach businesses about optimising use of resources, while local 3D printing is the ultimate supply chain killer.

“Two thirds of employees work for companies that are performing below the expected. That’s not all due to digital, but digital has a significant capacity to improve capability.

“If you improve that bottom 75 per cent to match the company that’s 10 percentage points above, that’s £130bn GVA to the UK economy. A big prize if you can get it right.”

A note to the Cisco board

It’s not a bad report and has useful case studies on who’s doing all this well. It just feels a bit like a bit of a long and expensive note to the Cisco board…

Cisco, more particularly its long-time, now-retired CEO John Chambers, has been slated in recent years for not delivering (enough) value for shareholders, given it works across many fast-growth markets.

Its penchant for acquisitions has no doubt given it an interesting org chart, with Chambers once making the news just for having such a complicated management structure.

And getting a new CEO last year, Chuck Robbins, hasn’t rid Cisco of headaches.

The latest is that there’s an internal power struggle against Robbins implementing new ways of working, which has prompted the “legendary” four-person, billion-dollar startup scouting team created under Chambers to resign in protest.

Chambers is, of course, the same man who declared in his outgoing address that 40 per cent of businesses would fail to adapt, and indeed fail, in the next decade.

He may not have been wrong, but could he have been speaking more personally?

On the wider digital transformation story, Cisco UK’s Smith concluded: “There is risk and that’s something you have to manage, not doing something because it is risky is not a reason no to do it.”

Which is probably what Chuck Robbins is thinking right now.

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