Former Cisco CEO John Chambers On Startup Cultures, Vulnerability And More

Not too many people get the chance to change the world once—never mind a second time. John Chambers is aiming to be among the select few.

The former CEO of Cisco remembers back in 1993 when people doubted the company’s ability to change the way the world works. “People said, ‘Nice marketing. You’re a router company,’ yet I think most people would say that we did change the world.” Indeed. Cisco’s revenue was just a shade over $1 billion when he took over as CEO of Cisco in 1995. By the time he left in 2015, it was at nearly $50 billion.

In his next chapter, as founder and CEO of JC2 Ventures, Chambers is looking to develop startup ecosystems across the globe. The VC firm is based out of Palo Alto—but has quickly found inroads in India, France and the U.S. Chambers has spent the first year examining startup cultures across the world and recently was a recipient of the Padma Bhushan award, one of India’s highest civilian honors.

Chief Executive spoke to Chambers, who recently wrote a book, “Connecting the Dots: Lessons For Leadership In A Startup World,” about what he’s learned about cultivating startups and why vulnerability is an important trait for CEOs to exhibit. Below are excerpts from this interview.

How would you rate your first year with JC2 Ventures?

I think we’re off to a very good start. One of the things that is so exciting to me is the concept appears to be working. There is a French global high-tech ambassador for President Macron. We’ve developed a relationship with Prime Minister Narendra Modi in India on his Digital India initiative. I’ve been there twice in the last two and a half months, working with the prime minister’s government. And I think it’s indicative of the recognition of the Padma Bhushan Award. I didn’t even know how special it was until literally I got texts from the highest levels of government in India saying, “Congratulations. I had no idea what they were congratulating me for. And then when I looked, I heard from almost every major Indian CEO and government leader and almost any first and second-generation American Indian leader. I’ve had tremendous honors over the years, and I hope that I earned them. But I’ve never had an award like this and got this many comments from such a group of people that I respect in the volumes.

This points to what we’re trying to accomplish in terms of changing the world, realizing the large companies will not generate incremental jobs over the next decade because of digitization and artificial intelligence and the scale of automation. If you’re going to have job growth and income growth, you must become a startup nation. And the largest companies to do innovation are going to have to look to startups to say, “I’m going to partner with you uniquely to achieve this innovation.”

It was tremendously exciting this last year, and I’ve been working on it for three years, but we had formally announced it a little bit over a year ago. And the receptivity on both a national level and the three countries I’m focused, India, France and the U.S. has been good. We do probably 40 or 50 different startup sessions a month for individual companies and the 18 that we’re investing time and energy on, and I’m having the time of my life.

You’ve been a voice in saying that established companies really need to team up with startups, whether it’s something in-house or it’s just some kind of collaboration. I’ve noticed, not just in the tech space but really across the board, leading companies across any industry are really getting into the incubation game. I’m seeing more and more incubators in some of these companies, whether it’s like a manufacturing company or a packaging company. What do you make of this trend?

I think it is something that’s coming at us with tremendous speed. And if you watch what all leaders, CEOs, or government leaders that are really successful, instinctively know, they catch trends even though they may not understand some of the implications or why they’ve occurred. I think every organization, regardless of size, will become a traditional business and a technology company, regardless if you’re in retail, healthcare, government, etc., and that every organization has to innovate or they’re going to die.

And when I first said 40% of large companies were going to disappear in the next decade, people said, “John, you’ve got a lot of predictions that have been remarkably right. Not a prayer on this one.” And yet, they’re now saying that probably is too conservative. And so, I think leaders, by countries or by large companies or small companies, know if they don’t innovate, they get left behind. Innovation can come in the traditional way of innovating your own products, or they can become innovation hubs within your company. There’s a lot of positives, but challenges to go with that. Or they can be innovation hubs where you acquire innovative companies, also with technology that comes into your retail industry or your manufacturing or your public service group, or you can partner uniquely with startups in a way you haven’t done before.

Now it’s also important to understand why this is occurring and what’s different. The speed of innovation, because of digitization and big data and artificial intelligence, is moving at twice the speed, maybe three times the speed of innovation  in the Internet era. And secondly, the majority of young people, the very best and brightest out of schools, used to all want to go to Wall Street firms or the automotive companies or the very big tech companies. Today they all want to go to startups, probably 70-90%, depending on the school, which says that a lot of the talent and innovation is going to occur from startups, and these startups are moving in a much faster pace than big companies.

This is why suddenly you see the innovation engine of a Fortune 100 company CEO, whether they’re in an automotive company or finance company or retail, saying, “I act like a startup. I’ve got to think about innovating my own traditional products. I’ve got to think about establishing innovation concepts across my company and knock down the silos, which is what digitization is about. I’ve got to think outcomes, not how do I do at manufacturing and sales and supply chain and finance. But how do I do them together?”

Talk to me about vulnerability as a leader. You know, you’ve talked about your dyslexia and how you deal with that, and the story of how that really came out was kind of a vulnerable moment for you. Why is this such an important trait for CEOs? Why do they need to be vulnerable?  

Leadership used to be about thinking the leader was superhuman and never made any mistakes and can execute. People are realizing that we all are human, and they will connect better with you if you’re open and transparent about your own challenges. And I think people are now realizing that great leaders, almost without exception, overcame challenges, sometimes those that could destroy their career or not, sometimes those that could have prevented them from going to college or not, and that openness surprised me.

I disclosed I was dyslexic on “take our children to work day” with 500 people in the room, and a little girl started to cry who couldn’t get her question out, and I forgot that I had a mic on as opposed to the stage mic, and I went off the stage to ask her what was wrong, and she said she was dyslexic, and she was having trouble reading the question. I said I was too, and I walked her through how I handled it, and I said, “Now let’s try your question again,” and then asked someone to get back up on stage, and suddenly when she asked it, I realized that I left my mic on. I thought I disclosed too much, and boy was I wrong. I got more comments on that session than almost any other that year, with people saying, “You made such a difference. John, we see a side of you we hadn’t realized, and it’s an important part of who you are. You need to show it more about how you care about people,” and the people who have limitations want to see they have a chance to be more successful.

Twenty-percent or more CEOs are dyslexic. Yet, very few of them will be the Chuck Schwab [SP] or the Richard Bransons of the world who would admit it. People in today’s society want people to be candid about their strengths and limitations, and I would argue you’re more a product of how you handle your setbacks and your limitations than your successes. You’ve got to be realistic. There’s nobody perfect. Lord knows I am not, and I’ve made a lot of mistakes, and that’s part of the value I bring these startups and, candidly, to government leaders around the world.

And then while I’m far from perfect, I do form relationships. Your currency of today as a leader? It’s track record. It’s trust and relationships. And when you think about that, that’s what people who read your concepts and your ideas really, if you take a step back, they need to understand, and then something that nobody writes about…Very few people write about how you handled your setbacks. Most people write about your successes, or they trash you when you get knocked on your tail, but I would argue that’s at least half the characteristics of all successful leaders, is how you handle those setbacks in life, in your business and your personal life, and everybody has them, especially if you’re in a role very long.

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