Resistance to Change and Cisco’s DNA

Most of my professional life has been focused on finding ways to address resistance to change. I don’t mean doing to change to people, but engaging them in the change process to meet their own interests better (my main aim in conflict work too) and less destructively, and those of the greater entity they are part of: corporation, non-profit, political movement, country, civilization etc.

In the early 1990s, I was on the core team for one of the largest organization change processes in corporate history. It worked pretty well and earned my corporation huge profits in the next 5 years, before in 1998 someone senior’s ego screwed it up and reversed the changes and nearly bankrupted the company. Eventually, a new leader with more humility, refused to reinvent the wheel, shifted back to the previous strategy and the company began to thrive.

Around 2000, I was involved in another major project on organizational learning to keep out of the way of the reversal process. As part of this project, I visited, with a team of my colleagues, Cisco Systems in Silicon Valley, then at the height of its dot com boom success in order to benchmark what they were doing right. And let me make clear, I think they were doing a lot right. After much interesting conversation, one of our senior management hosts asked me what we were really interested in and I responded: ‘Overcoming resistance to change.’ She responded: ‘Oh that. Well change is part of our DNA here. So we don’t need any special effort on that.’

Maybe she said it a little arrogantly, but I responded. ‘Well our 100 year old company invented mass production in the early 1900s, survived the First World War, the Roaring 20s, the Depression, the Second World War, the Cold War, the Korean War, and the fall of the Berlin Wall and is still the fifth biggest company in the world. So I guess we know something about surviving change. But what makes people resist change is that past change has hurt them. So we’ll see how Cisco handles the downturn’. She seemed very surprised and responded: ‘What downturn?’ We carried on the visit and had good conversations.

(In passing, I had a similar conversation with our own Chief Economist in 1998 about our strategy for handling downturns. He told me that downturns were a thing of the past because the Fed was now so clever. He now teaches economics at a leading university.)

A year later after the dot com bust, I returned to Cisco and heard they had laid off maybe a third of their staff. My former host was not on the team greeting us. I talked to my new host about a variety of topics and then gingerly came round to the subject of resistance to change. I said: ‘We are interested in resistance to change but I know that change is part of Cisco’s DNA and you don’t have that issue.’

‘Oh no’, he said, ‘we actually want to talk to you about that topic, because we here all know that your company invented mass production in the early 1900s, survived the First World War, the Roaring 20s, the Depression, the Second World War, the Cold War, the Korean War, and the fall of the Berlin Wall and is still the fifth biggest company in the world. So we know you are the experts surviving tough change and we want to learn about it as we are struggling.’

As he had repeated exactly my words to his colleague a year earlier, I said: ‘Where did you get that impression?‘ ‘Oh‘ he said, and he named the person I had met on my first visit ‘made a very emotional speech at her leaving party when she was laid off that this guy from your company had foretold exactly what was happening to Cisco because his company had ‘invented mass production, survived the First World War etc……’

I don’t tell these stories to  show how clever I am, (and I value wisdom more than smarts anyway; smart people do such dumb things), so much as how unthinking, success makes us. And yes I did train as an economic historian, as well as economist, so never inhaled the mathematical model building economic fundamentalism Cool Aid. But if someone says change is part of their DNA; look out!

And just to be clear: I went back the second time just because I really liked Cisco, and if you think about it, the story I told is reflexively about their ability to learn and bounce back. They realized that change was harder than they thought, and they worked accordingly as a real ‘learning organization’. I meant no disrespect for Cisco or the excellent John Chambers who really fought hard to avoid any lay offs because he knew they might build more resistance into the DNA. And they are now I understand a very successful company.

And also to show that I guess old dogs do know some good tricks 🙂

This is Henry, getting on in age, but wiser than most of Wall Street. He smelt a rat on collateralized debt obligations from the start, growling whenever they were mentioned.