Page 189 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes

Case Study HRD Culture at CISCO Systems

isco was founded in 1984 by a husband and wife team who devised a means to
connect incompatible computer networks at Stanford University. A series of
Cmergers and acquisitions with several start up companies turned Cisco into a full
service provider of networking equipment and garnered the technological know how to
keep it on the cutting edge. Strategic partnerships with high-tech companies such as Hewlett-
Packard, Microsoft and Intel have put Cisco on an explosive growth path for over two
decades now. Operating in nearly 100 countries around the world, it provides products
that enable computers to communicate with each other, offering customers end-to-end
scalable network solutions. The company is one of the fastest growing companies in
Silicon Valley and one of the hottest stocks of the decade. Apart from strategic partnerships
which proved very crucial for its success, there are other reasons for its stupendous growth
– registering a fifty per cent sales growth year after year.
Excellent HR Practices
At Silicon Valley, employee turnover – generally speaking, stands above 30 per cent. This
is not the case with Cisco. It is just under 8 per cent. Most people in the street attribute
Cisco’s success to its human resource strategy. Cisco has acquired other start up companies,
as most people would readily agree now, mainly to gain their bright engineers. An
acquisition almost every week at one point of time enabled the company to almost double
its employee count to over 40,000 in the shortest possible time in the initial years.
As part of its HR strategy Cisco espouses five core values: a dedication to customer success,
learning, innovation, openness, teamwork and doing more with less. John Chambers, the
CEO, tries his best to integrate these with corporate mission statements, HR policies and
practices and the culture of the company. To break status barriers and to encourage openness,
John Chambers holds a monthly birthday breakfast meeting open to any employee with
a recent birthday and answers all questions – howsoever difficult and embarrassing these
might be – patiently. Teamwork and team spirit are being encouraged at every level. In
fact, anyone trying to disregard team values would be shown the door almost
instantaneously. To reinforce the crucial link between business initiatives and the work
that people carry out, every employee is made to recite top initiatives regularly. Lot of
peer pressure is exercised to see that employees know and remember these initiatives.
HR Policies in Sync with Business Strategy

Cisco’s HR policies and practices are aligned with the business strategy and constantly
reinforced. The recruitment and selection system identifies exactly the kind of people they
need. For Cisco, in fact, effective recruiting has become a powerful strategic weapon. The
company’s giant leap from one stage to another required it to double its head count
quickly. To get the best people from the market place, the company used the World Wide
Web quite effectively. Rather than placing newspaper help-wanted advertisements, the
company runs ads featuring an internet address and an invitation to apply for work at
Cisco. As a result, the company’s website has become a turbo charged recruiting tool. It
allows the company to post hundreds of job openings with specific information about
each one. The company also advertises its site in cyberspace which helps to reach a self
selected set of candidates (people who can really navigate the internet) from around the
globe. People looking for a job can search by key word to match their skills with job

Contd...

184 LOVELY PROFESSIONAL UNIVERSITY