It is finally official, Cisco will layoff 6,500 employees -- below the 10,000 rumored, taking $1.3 billion charge.
As we wrote in a previous piece, layoffs won’t solve Cisco’s problems. They may give a temporary boost into Cisco’s bottom line, but the won’t help the company’s top line, revenue growth.
What will help revenue growth is a sound leadership. And Cisco can get valuable lessons from both Google Inc. (NASDAQ:GOOG) and International Business Machines (NYSE:IBM), as both companies reported robust quarterly results, beating both on the bottom and on the top line.
From Google, Cisco should learn that leadership is about innovation; and innovation begins with the customer, the center of the economic universe, the beginning and ending of every economic activity, the ultimate boss of every capitalist enterprise. Innovation continues with the development of the right products to address the needs and desires of the customer; and ends with the delivery of these products. Innovation isn’t a commodity that can be purchased in the market, but an organizational capability that must be immersed in a customer-centered vision and imbued in a culture of collective entrepreneurship.
From IBM, Cisco should learn that leadership is about leveraging the company’s core resources and capabilities to come up with solutions to customers’ problems, taking advantage of emerging technology trends. Leadership is about setting corporate goals and priorities, deciding which business belong to the past and which business belongs to the future. Leadership is also about execution, sticking with your goals and priorities and make sure that they are reached. Leadership is about “making elephants dance.”
The bottom line: Layoffs won't solve Cisco's problems. Lessons from winning companies will. But is the company ready for such lessons? I don't think so, as I haven't see any policy shift that will confirm that the its current leadership is following the footsteps of Google and IBM -- Im still not a buyer of Cisco shares.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.