Reinvention (Shortcuts) by Anthony Elliott

Author:Anthony Elliott [Elliott, Anthony]
Language: eng
Format: mobi
Publisher: Taylor and Francis
Published: 2013-01-16T14:00:00+00:00

The repertoires of corporate reinvention

The emergence of ongoing corporate restructuring takes us to the core of the new economy, and particularly illustrative of such trends as the American technology giant Cisco Systems. This global technology supplier of hardware such as routers and switches, which directs traffic through Internet networks, briefly attained the status in early 2000 of the world's most valued company – with a market capitalization of US550 billion. Twelve months later, following the tech-wreck, its stock-market value crashed to US100 billion. The company was able to survive the worst of this economic downturn, largely because as the world's “Internet plumber” the selling of such network gear remained assured.

Yet Cisco rapidly adapted to the fast-changing circumstances of Web 2.0, quickly cementing its reputation as a cutting-edge corporation at the level of innovation and reinvention. Realizing that its core markets centred on routing and switching had matured, the company branched out into a range of other business opportunities – from Internet telephony to wireless products to optical networks. This expansion of Cisco paid off, and by the late 2000s the company employed more than 66,000 people and had revenues near 40 billion.

What was most striking about this branching out at Cisco from the networking market and into consumer territory was a remarkable change in the whole vocabulary and cognitive frame of the company. Under the direction of chairman and chief executive John Chambers, Cisco appeared to abandon its set ways of doing business, embracing instead a new flexibility, fluidity and adaptability. The strength of Cisco, according to Chambers, derived from its “stretching” into different market directions. To convey the new rules of this corporate strategy and the logic of expansion at Cisco, Chambers indicated that the company no longer stood for “command and control” but instead a new world of “coordination and cultivation”. This was less an “engineered” model of management, and more an institutional realm of networks, coalitions and teams. That is to say, the “stretching” of Cisco – which intensified dramatically under the leadership of Chambers – resulted in a range of institutional innovations such as outsourcing and acquisitions. In practice, this saw Cisco move into such markets as virtual health care, cloud computing, routers in space and Internet security. By late 2009, Chambers revealed that Cisco had developed more than 30 “market adjacencies”.

If some corporate reinvention is geared to product and market refashioning, some other companies extend the remodelling principle all the way down to the very fabric of organizational structure – and perhaps nowhere is this better dramatized than at Cisco. As it happens, Cisco had long been a corporate innovator. Not only manufacturing, but research and development had been substantially outsourced, as the company acquired various networking firms and integrated them. Yet Cisco's phenomenal reorganization during the 2000s consisted of much more than new acquisitions and outsourcing. Chambers was widely acknowledged by the business and financial world as raising the following thorny questions: can companies reinvent their organizational structure in the same way they rebrand

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