From Silos To Success: Cisco’s Formula For Successful Reorg

Not all organizational change is about big mergers or new CEOs. There are many other types of corporate change happening every day that don’t make a splash in the news, like implementing new technology or introducing a new policy initiative. It may not seem as big as appointing a new CEO, but when you’re dealing with thousands of employees, any change can be monumental.

Take the networking tech giant Cisco Systems. As a multinational corporation with 300 locations in 90 countries, 46 data centers, and more than 65,000 employees, a company-wide change would be a massive undertaking. But in 2008, Cisco did it. The company successfully reorganized its internal IT infrastructure, one of the largest and most complex IT environments in the world.

The Problem: A Fragmented, Siloed Structure

Cisco’s internal IT Network and Data Center Services department was stuck in an outdated, siloed way of doing work. With two separate departments, employees were duplicating effort and lacking focus. In many cases, employees weren’t even aware that duplication of work was happening. In addition, employees had to balance design, operational, and architectural issues, which was practically impossible due to resource and time constraints. No one knew who was responsible for what.  

It was time to find a new solution to accommodate Cisco’s changing technology needs. It had to be simple, with communication and collaboration features, so everyone in the IT department was on the same page. This was easier said than done—a change to IT would ripple throughout Cisco’s global data centers.

The Solution: An Organizational Restructure

This solution was a process that took two years, beginning with a risk management analysis in 2006 that persuaded Cisco’s vice president of IT that an organizational restructure was necessary. Cisco IT moved from a silo-based organizational structure to a lifecycle-based model composed of six stages: Prepare, Plan, Design, Implement, Operate, and Optimize. This new structure provides clarity on every step of a project and allows team members to concentrate on their specific areas of expertise.

Organizationally, employees were moved to different teams to focus on each stage of the lifecycle model without distractions. For example, before the restructure, there was a single team focused on implementation, design, and operation. In the new structure, that team was dispersed into three different teams, each one solely dedicated to one stage.

Results: Clearly Defined Roles And Increased Productivity

The new organizational structure allowed Cisco IT to improve communication, customer satisfaction, and productivity. After the reorg, employees weren’t getting pulled out of meetings or getting called after their regular hours for emergencies—there was a clearly identified “expert” for each area. Employees had more time to spend training and mentoring newer employees, and outages were reduced from 1,000 hours per quarter to 300 hours per quarter. Client-impacting incidents went down from 150 per quarter to 70 per quarter, and employees had more time to talk to clients and educate them on Cisco’s processes.

At the core of Cisco’s successful organizational change was pinpointing one objective and sticking with it: improving focus for the IT teams. Every employee knew the metric for success, and everyone understood the purpose of the company-wide change.

To follow in their footsteps, keep these three rules in mind: clearly define the reason for the change, frequently articulate it to the whole organization, and define how you will measure success.

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