Analyzing The Change Process In Cisco Systems: A Pettigrew’s Model Approach

Case Study

The change process considered for this study is taking place in one of the world’s most reputed networking companies “Cisco”. The change is already in action for the last few years and is still continuing. The change is about a manufacturing shift from hardware to software. The company bears a reputation for being the world’s largest networking solution provider through its top-selling hardware devices ‘Switching’ and ‘Router’. However, with a constant decline in sales from hardware devices and a simultaneous rise of digitalization in the form of cloud technology and IoT, the company seems to have no option than going for the change. Customers nowadays do not have much of an interest in purchasing the expensive hardware. They rather look for a less expensive software solution (Roztocki and Weistroffer 2015). The new CEO, Chuck Robbins sensed the urgency to respond to the changing world and consequently decided to undergo a change. The main purpose of this study is to understand the change process in Cisco with the help of Pettigrew’s Model.

The case study company is a world-renowned name in the IT sector. The company is not just known to its clients in countries across the globe but to them also who belong to it by being the students of IT and the employees in companies. Two of its most selling products ‘Switching’ and ‘Router’ at one time was not being able to produce the similar impact as it did in past. The company which is headquartered in the United States is spread across the globe. The change which is the highlight of this study is majorly being contributed by its Indian business unit. Chuck Robbins is majorly responsible for sensing the urgency for the change. The enterprise which operates in 90 different countries and across 300 different locations was getting affected by the fourth industrial revolution, the digitalization. The company had been offering the hardware-based security, networking and management products until recently. Within just a few years of time, it went on to become the largest networking company in the world. Cisco like other multinational firms aims to expand its market reach and enhance its work efficiency by following a series of merger and acquisition. Few of its important venturing includes OpenDNS, WebEx, Jasper and Jabber. These acquisitions have helped in specializing in the Internet of Things (IoT), energy management and domain security (Cisco.com 2018).    

Cisco’s Change Process

Now, it is important to know what has caused the sales to drop. One of the facts behind the sales drop is the emergence of the fourth industrial revolution. The digitalization of the industry is a growing interest in manufacturing and IT firms across the globe. Industry 4.0 is being viewed as the future of manufacturing backed up from innovative and productive technologies. In such an era, firms are now looking for a much-improved and less expensive option to facilitate their daily-basis works. The networking and management related works are now being seen as if being possible through cloud networking and internet of things (IoT). On the other hand, Cisco had been offering networking solutions with ‘Switching’ and ‘Router’ (Cisco.com 2018). The mismatch or a gap between the emerging trends and the Cisco’s business strategies lead to falling market shares in a number of quarters of fiscal years. Cisco waited for a recovery for quite a significant period of time; however, facts remained the same. A company as such of Cisco would never want things to go just as it happens. If that is true then it would not have ventured with so many big names in the industry. It is into its culture to look for opportunities and sort out the challenges. The CEO Mr. Robbins seems to have to carry the same culture forward with its intention to dominate the software industry and to retain the existing and to grab new clients. Therefore, factors which triggered or motivated for the change are the digitalization of industries across the globe, a simultaneous declination of sales in Cisco and the CEO’s optimism towards the new opportunities.

The main actor of this change process is Mr. Robbins who is willing to accelerate the production of software-based security, management and networking products. Customers prefer such products because these are highly adaptable and less expensive than those in the hardware format. The CEO was intelligent enough to identify the needs for change. Consequently, it went on for acquiring the ‘Jasper Technologies’. Cisco was able to access the software solution being provided by Jasper and used it to network its entire pieces of equipment. It did also help in putting up an extra emphasis on security features. This is an area where Cisco had wanted to expertise in. Cisco is now growing with a less dependency on its expensive hardware portfolio which is indeed a great move considering that corporate customers can be reluctant to spend during uninspiring economic growth (Godey et al. 2016). However, the above-stated facts just explain a correct proposition for change, it does not at all explain whether the change will be a success or there will be ample resistance to it. An execution of the change process is much more critical than just realizing its needs for the concerned organization.

Theories and Concepts

As of now, the change process has resulted in growth in newer units like service-provider video, security and collaboration. All these products have collectively posted a close to 10 percent sales growth. There is an increment as well as share repurchase authorization and dividend. However, some bold decisions were also being made during this period. The company is expected to cut down nearly 7 percent of its labor force (Cisco.com 2018). Such situations will mostly face the challenge. There can be resistance to it from employees especially from those who are into the target zone. The criticality involved in such scenarios will be explained later in this study in the analysis section where Lewin’s force field analysis will be used to identify the level of resistance from employees.

Since the case study is based on change management in Cisco systems, the focus point will be the Pettigrew’s Model of change, Lewin’s force-field analysis and the few scholarly views. These resources will be researched and studied to prepare a platform for the analysis section.

According to the Pettigrew’s Model, change is a continuous process and should be accompanied by an interaction between the Pettigrew’s Model of change contents and the business strategies (Benedek et al. 2015). Business strategies like organizational goals, objectives and purposes should be made aligned with the execution of strategies. The model has the following contents in it:

Environmental assessment: The model advocates a continuous exposure to open innovation to keep on monitoring the internal and external environment. As opined by Moncrieff et al. (2015), open innovation is a way to go beyond the internal innovation. It means looking beyond the organizational capabilities and adopting the successful innovation examples from outside.

Human resources as liabilities and assets: It says that employees should be given the values for their hard works which they put into their daily activities. They should feel trusted by firms. According to Hornstein (2015), the human resource management should work in collaboration with the management to effectively design the job nature. The management must be able to identify the diverse skills and allocate the jobs. These things will actually trigger the motivation for change.

Linkage between strategies and operational change: It is one of the most common issues which organizations face in their change process. They fail to make a linkage between strategies and change. In the opinion of Harmon, Green Jr and Goodnight (2015), it is important for a change process that goals, objectives and visions are known to employees and they are working on shared goals. In the light of what is being said, it looks evident that a change process will sustain if it does not have any resistance at the organizational level. Rather, employees and management should have the similar views on the goals, objectives and the strategies for change.

Pettigrew’s Model of Change

Lead the change: This is perhaps the most vital part of a change process. During the whole stage, a lot of activities are required to be taken care such as setting the goals & objectives, communicating with stakeholders, creating an environment for the change, coordinating activities, countering resistance and steering the process. The evidence for the fact can also be traced from scholarly articles. As opined by Van der Voet (2014), leading a change is much more difficult and a different thing to do as just planning it. It is because of challenges that come in the different forms such as communication gap, resistance to change and others. Most of the change processes fail because of one or few of its contents. Some companies fail for its employees putting up the resistance whereas some due to an improper alienation of operations with strategies.

Overall coherence: It says that each of the contents of the model should have a balanced relationship with each other. It means giving equal importance to every single element of this model. There should be a consistency being maintained throughout the change process. Efforts need to be given to attain a competitive edge. This is possible only if it meets all the criteria of a successful change process. Sometimes what happens that goals & objectives have clearly been understood by employees; however, they have in them a certain point of disagreement to it. There can be various reasons for such behaviors as the strategy lacks the potentiality or they fear to lose their jobs. In either of the cases, it is important for managers and the human resource professionals to have some communication or feedback sessions with such employees. A feedback session should be used to exchange the management’s views on change. In the opinion of Kuipers et al. (2014), employees should be made involved in the smallest of organizational activities as they are the assets for organizations. In some cases, employees are not sure of everything which is going around them. They just can see a lot of meetings being held in the office premises. However, they have a little or perhaps no clues on what these meetings are all about. Therefore, it is important to appropriately communicate the change process at the organizational level. The purpose behind the plan and the factors which forced to make this plan should be communicated clearly. The goals and objectives should be shared at the organizational level. Management, employees, human resource professionals all should know their roles and responsibilities in the change management.

Lewin’s Force-Field Analysis

The force-field analysis by Lewis can be divided broadly into two segments such as driving forces and restraining forces. If driving forces are stronger than resisting forces, the change will happen or else this will not. It basically helps in identifying whether the proposed change process is feasible for organizations. It encourages overcoming the equilibrium state as there will be no change in a case when accelerating and retarding forces have the similar strengths. For a change to happen, the equilibrium state must be upset to bring in the favor of the accelerating forces (Capatina et al. 2017).

On looking to the case from the perspectives being set by the Pettigrew’s Model, following things can be noticed:

The current CEO of Cisco was able to understand the changing market forces. The business which once doing profits for the company is now constantly going to lose. The declining sales were enough indication for the CEO to look into the matter. The CEO was able to identify that market trends are going up against its production strategies. The company which once dominated the hardware industry is now facing the declining sales. It was being identified that Industry 4.0 or the digitalization of the industry is doing the entire destruction. Customers have other options now which they can use for networking and security solution. They can have these solutions at prices cheaper than required to purchase the ‘Router’ and ‘Switching’.

The results of the change process have started to pour in. Trends are looking good as the new business divisions are making profits. In the meanwhile, the management has also decided to cut approx 7% of the workforce (Cisco.com 2018). This may have been done to reduce the expenses and support the shifting from a hardware networking solution provider to the software. However, such decisions can be problematic as well if not handled properly. The management at Cisco can use a variety of ways to handle the situation effectively. The best way in this regard will be to effectively communicate with employees and the other stakeholders. Letting everybody know the process is a good way to help them feel valued. They could then be able to connect with it. This is what is more required in a change process. It all now depends on the CEO and the management that how they deal with employees during the ongoing change process.  

The successes which Cisco had with its new business divisions just indicate that the change process is finally paying off. The sales have increased by 10% which is good considering that the company is undergoing a shift from its legacy hardware business to the software. However, there is a need to maintain the momentum and boost the sales further. Cisco is aware of what needs to be done in order to dominate the market. It has been dominating the hardware industry until recently it was hit hard by the rising trend of an industrial revolution. Few things would be of vital importance for Cisco such as coordinating with employees & stakeholders, focus on shared goals, giving training to employees on the change process, monitoring the external responses & emerging technologies and maintaining the feedback session (Lozano, Ceulemans and Seatter 2015). These elements should necessarily be maintained in order to counter any barrier to the change process.  

Scholarly Views

Leading the change effectively requires a leadership approach on different levels of organizations. It includes but not limited to the CEOs, managers and supervisors. The CEO in the context of Cisco is responsible for the change process the company is undergoing currently. It took a few times until the CEO could realize the reason behind the dropping sales. The decision which the CEO had made is unique on its own. It is little realistic that how a company can think of changing its product portfolio. It also requires a leadership skill to identify and believe that the same company would do well with the software divisions as well. The company which remained known to the world for its router and switching would at some point in time go for a change is a fact difficult to be understood. Despite so many good things about the company, it is important for the CEO to keep the momentum going. There are a few successful examples of change management which the CEO should follow to understand the kinds of challenges can arise and the solutions which could be used against these challenges. One of such examples is of General Electric (GE) (Agarwal and Brem 2015). 

Every single force or contents of a change process should have unity between each other. A change process is done towards a specific goal which in context to Cisco is to offer software networking, security and management solution to its clients. Now, the operational objectives can never be like going away from the goals. The operational objectives should specify in details the purpose behind the change. On the other hand, a shared vision is required to successfully achieve the change. Now, things like employees are not aware of the change, the purpose behind it or they do not know their roles & responsibilities in the process should never a part of the change. There is a need for a clear communication over everything which should be conveyed to employees. Apart from communication, it is very important to maintain coherence between both of its business units such as hardware and software. A hardware company which takes such steps generally make the huge profits. However, the success can be for short-term as the sales of pieces of equipment may slow down. There is a clear need for diverse talents, so that, allocation of tasks could be made appropriately. The company will be needed to work during the training process as diverse skills will now be needed to separately deal with the two different business units to avoid the overlapping. It can be called a very tectonic shift from a company as such the Cisco; however, it was necessary as well (Matos Marques Simoes and Esposito 2014).

Conclusion

Evidence of employees resisting the change could not have found. Cisco rather runs a program called the ‘Talent Bread’ under which employees are encouraged to use the social media sites. They are also taught on the limitations but in a very innovative way. Cisco appears to have an environment where employees intend to do creative things, connect with people and benefit all.

Table 1: Lewin’s Force-field of Cisco

Conclusion

In summary, it can be concluded that Cisco had made a fair move. However, a praising term will not alone work. This needs to be accompanied with effective strategies to ensure that the current trend of success continues further as well. This would not be an easy job to execute in long-term. Cisco would definitely be looking for profits from both its hardware and the software businesses. However, this is indeed challenging because an increase in software sales will gradually affect the sales of hardware units. This is indeed a challenging situation which will require a leadership approach to understand the different needs in different situations. At some point in time, there will be the need to spend a lot on training to encourage and control a diverse workforce. Workforce diversity is required to look after the two different business domains. On some other point in time, there can be a need to consider a change in the software’s compatibility with hardware as currently, Cisco is providing the software compatible only to its hardware platform. The change process will continue till the time the company is able to make profits from both its business units. The success key will be the leadership approach which will require while evaluating the marketing performance or applying some thoughts or strategies to the process.

References 

Agarwal, N. and Brem, A., 2015. Strategic business transformation through technology convergence: implications from General Electric’s industrial internet initiative. International Journal of Technology Management, 67(2-4), pp.196-214.

Benedek, C., Shadaydeh, M., Kato, Z., Szirányi, T. and Zerubia, J., 2015. Multilayer Markov random field models for change detection in optical remote sensing images. ISPRS Journal of Photogrammetry and Remote Sensing, 107, pp.22-37.

Capatina, A., Bleoju, G., Matos, F. and Vairinhos, V., 2017. Leveraging intellectual capital through Lewin’s Force Field Analysis: The case of software development companies. Journal of Innovation & Knowledge, 2(3), pp.125-133.

Cisco.com. 2018. Retrieved from https://www.cisco.com/c/dam/en_us/about/ciscoitatwork/downloads/ciscoitatwork/pdf/NDCS_Restructuring_AdvSvcs_Case_study.pdf

Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R. and Singh, R., 2016. Social media marketing efforts of luxury brands: Influence on brand equity and consumer behavior. Journal of business research, 69(12), pp.5833-5841.

Harmon, D.J., Green Jr, S.E. and Goodnight, G.T., 2015. A model of rhetorical legitimation: The structure of communication and cognition underlying institutional maintenance and change. Academy of Management Review, 40(1), pp.76-95.

Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.

Kuipers, B.S., Higgs, M., Kickert, W., Tummers, L., Grandia, J. and Van der Voet, J., 2014. The management of change in public organizations: A literature review. Public administration, 92(1), pp.1-20.

Lozano, R., Ceulemans, K. and Seatter, C.S., 2015. Teaching organisational change management for sustainability: designing and delivering a course at the University of Leeds to better prepare future sustainability change agents. Journal of Cleaner Production, 106, pp.205-215.

Matos Marques Simoes, P. and Esposito, M., 2014. Improving change management: How communication nature influences resistance to change. Journal of Management Development, 33(4), pp.324-341.

Moncrieff, G.R., Scheiter, S., Slingsby, J.A. and Higgins, S.I., 2015. Understanding global change impacts on South African biomes using Dynamic Vegetation Models. South African Journal of Botany, 101, pp.16-23.

Roztocki, N. and Weistroffer, H.R., 2015. Information and communication technology in transition economies: an assessment of research trends. Information Technology for Development, 21(3), pp.330-364.

Smollan, R.K., 2015. Causes of stress before, during and after organizational change: a qualitative study. Journal of Organizational Change Management, 28(2), pp.301-314.

Van der Voet, J., 2014. The effectiveness and specificity of change management in a public organization: Transformational leadership and a bureaucratic organizational structure. European Management Journal, 32(3), pp.373-382.

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