Cisco departures signal changing of the guard

It’s not exactly a brain drain, but the recent exodus of high-profile executives from Cisco Systems certainly qualifies as a loss-of-intelligence trickle.

During the last few months three top executives, including the woman credited with the development of Cisco’s aggressive IP strategy and a Canadian once viewed as the heir apparent to CEO John Chambers, have left the fold. Two of these defectors have taken up residence with other companies. While the exits of former chief technology officer Judy Estrin, Canadian Don Listwin, one of only two Cisco executive vice-presidents, and Selby Wellman, senior vice-president of Cisco’s internetworks business seem to be amicable partings, there’s reason to wonder whether these resignations might signal more defections. Certainly these departures signal a minor changing of the guard in the higher echelons of the company.

Such departures are more significant for a company like Cisco, since talent and brainpower are the backbone (pardon the pun) of this networking giant. People, more than products, have propelled Cisco to the lofty heights of stardom in the IT industry, and key to that success has been Cisco’s ability to retain most of the folks that are part of the continuous stream of acquired start-ups. Without question, Cisco’s buying sprees are about acquiring people talent, which has propelled the company like a booster rocket to near unprecedented growth and profitability.

If you are familiar at all with Cisco, then you probably know each of the three.

Judy Estrin, the much respected former CTO of Cisco, in April joined husband and former Cisco engineer Bill Carrico, who himself left Cisco last year, at startup IP network company Packet Design Inc. A true IT visionary, Estrin had the remarkable ability to demystify complex notions like the network convergence of voice, video and data, explaining it all in easy to understand language that made the prospect seem both exciting and do-able.

Estrin came to Cisco in 1998 when her company Precept Software was acquired. She quickly became Cisco CTO while husband Bill was appointed vice-president of the small and medium lines of business.

The belief is that the dynamic duo was simply not cut out for big-company life and both were anxious to launch their fourth startup. Rumour has it that the man Estrin replaced – Ed Kozel – will return to his old post. A further note: Packet Design’s chief scientist is Van Jacobson, himself a former chief scientist at Cisco.

Burnout may have prompted Selby Wellman, senior vice-president and general manager of Cisco’s Internetworks business, to bid adieu to the company in early August. The official story was that Wellman left, citing family and part-time outside business interests as the catalyst.

Wellman was a five-year Cisco stalwart who’s been given a great deal of credit for capturing the lucrative SNA-to-IP networks migration business from IBM. A hectic travel schedule may have finally taken its toll as Wellman was quoted as saying he “really didn’t want to live on airplanes anymore.”

Yet another theory is that the SNA-to-IP migration business victory represented the end of one challenge and he was not interested in starting another Cisco project.

Don Listwin was at one time considered heir to CEO Chambers’s job and the thinking among many is that the Canadian simply wouldn’t wait any longer, and announced his resignation about a week after Wellman tabled his. Listwin heads up a new company formed by the US$6.4 billion merger of wireless software specialist Inc. and e-mail/unified messaging experts Inc.

Listwin joined Cisco in 1990 as a marketing manager and quickly rose to become the Number Two executive in the company. He’s been credited for playing a key part in Cisco’s rise from small-scale upstart to networking juggernaut.

Despite these high-profile resignations, little is likely to change at Cisco as a result. Expect a continuation of a successful corporate philosophy that’s defined by high customer touch, aggressive marketing and partner programs and a continuous, steady stream of start-up acquisitions. As long as John Chambers remains at the helm, Cisco will undoubtedly continue on a course of clear and smooth sailing. In fact, these resignations merely give others in the company a chance to shine and make their mark.

But the exits are surely a signal of corporate cultural change. Cisco is less the breeding ground of entrepreneurial creativity it once was as a pioneering and swift-moving startup and is, in fact, now part of the entrenched industry “establishment”. How else to explain that two of the three Cisco expatriates have moved onto startup companies? Why would the uncertain future of a fledgling business seem more attractive than sticking with the closet thing to a sure thing in the networking industry?

It’s a subtle signal of a completed metamorphosis. Cisco at one time was the red-hot startup that attracted those from entrenched IT companies seeking a fresh challenge with a rising star. Now the tables have turned.

Welcome to the big time, Cisco…

McLean is research manager, network support and integration services, for IDC Canada Ltd. in Toronto.