BEE SP0910

Cisco: Social Media/Web 2.0
By mid-2010, Cisco Systems, Inc., a worldwide leader in networking and related IT gear, was also emerging as a leader in the use of social media/Web 2.0 technologies. Over the past half decade the company had implemented a series of programs to leverage multiple tools, such as blogging, Facebook, Twitter and YouTube - to promote engagement with external stakeholders, and it also had developed a set of innovative technologies and products to improve internal communication and collaboration among employees and teams. The enhanced ability to collaborate virtually and remotely was a key enabler of a new management system that CEO John Chambers instituted in 2002. That system, in turn, allowed Cisco to be the largest company in the world with a single P&L and with centralized functions, a structure that promoted efficiency and produced substantial savings. Senior leadership envisioned that expanded collaboration, enabled by both technology and cultural adaptations, would create the opportunity for transformational change in how Cisco employees interacted, engaged in teams and performed work. How such change, however, might impact Cisco¶s efficient operations and, ultimately, its market leadership remained unclear. While Social media/Web 2.0 created significant opportunity, its rapid expansion also triggered serious concerns about how employees were using the tools. Numerous companies were confronting instances of employees posting inappropriate material that put both employees and their firms at risk. Cisco¶s Amy Paquette, senior manager of a new group in corporate marketing responsible for social media strategy and governance, described the concern: For this organization, training and governance are a major focus. If you can¶t train your workforce to know how to behave in an online world, then you¶re setting up the employee, as well as the company, for trouble. But do we need to make training mandatory for the entire workforce? And how are we going to police the thousands of posts that go up each day?

Company Overview
Cisco Systems was founded in 1984 by a group of Stanford University colleagues who wanted to send emails between departments with different local area protocols. Their development of a multi-protocol router set the enduring corporate philosophy of finding solutions to address customer challenges. Early products were sold to universities and government offices but expanded to large corporations as the demand for network routers grew rapidly in the late

Sam Perkins prepared this case under the direction of Professors PJ Guinan and Sal Parise. It is intended as the basis for class discussion rather than to illustrate either effective or ineffective management. Copyright © Babson Executive Education 2010. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means ± electronic, mechanical, photocopying, recording, or otherwise ± without the permission of copyright holders.

Cisco: Social Media
1980s. With sales reaching $28 million, Cisco went public in 1990 and within a few years started acquiring associated network technology firms. Revenues hit $1 billion in 1994 and the following year John Chambers was promoted from EVP to president and CEO. Acquiring companies to gain technology or entry to new markets evolved into a full-scale strategy as Cisco developed a system of policies and practices for successfully integrating entrepreneurial firms into the corporate fold with minimal loss of talent. Cisco became one of the ³four horsemen´ of the first Internet boom (along with Sun, EMC and Oracle), and in 2000 it boasted a market capitalization of more than $500 billion, making it the world¶s most valuable company. That valuation declined sharply as industry demand for protocol-based telecommunications equipment dried up in 2001. Chambers led a major rebuilding and diversification effort through acquisitions in related technology segments, and Cisco also pushed significant internal product development. In recent years, acquisitions and internal development focused on video technologies and entry into software segments such as email security, policy management, and cloud-based email software. Expansion into multiple adjacent markets significantly broadened Cisco¶s slate of competitors, which grew to include Alcatel-Lucent, Avaya, Motorola, HP and IBM and Microsoft. By 2010, Cisco had annual sales of $40 billion (Exhibit 1), and, fueled by more than 120 acquisitions, it dominated multiple segments of the networking equipment and related markets (Exhibit 2). Observers credited Cisco¶s success to its strategy of anticipating and catching market transitions and to its strong culture, many of whose attributes were embodied in the work practices of CEO Chambers, whose office was no larger than that most managers (Exhibit 3). A core feature of the culture was employee empowerment, manifested in the freedom to speak candidly and to experiment with technology, both of which promoted grassroots innovation. Cisco¶s commitment to empower employees to use technology as they saw fit extended to allowing people to use non-corporate IT-supported hardware - such as Apple Mac computers and iPhones - a rare practice in large organizations.

Social Media/Web 2.0 Foundations
The foundation for Cisco¶s embrace of social media rested on the company¶s Web 1.0 expertise, its culture, its evolving management philosophy and structure, and on its interest in promoting use of its own technologies. Cisco had extensive experience leveraging an array of Web 1.0 solutions, first introduced in 1995, to improve its performance, generating savings of $3.7 billion in FY 2008 from automating transactions and sharing information. Cultural qualities such as empowerment, innovation and collaboration served as enablers, catalysts, and goals in the adoption, development and use of social media/Web 2.0 tools.1 Similarly, a new management model instituted in 2002 both facilitated and required social media-driven collaboration. By the early 2000s Chambers recognized that too many major decisions were landing on his desk. This centralized system potentially hindered timely decision-making, and it encouraged a growing tendency, according to one executive, for some decisions to face ³pocket vetoes«where people would essentially disregard decisions out of a belief that µJohn didn¶t have all the right information,¶ and they would do things anyway.´ In an effort to decentralize decisions and leverage the power of collaboration to move more rapidly, Chambers established a structure of councils and boards, empowered to make decisions about growth opportunities in market adjacencies. The boards were comprised of
1

Social Media/Web 2.0. Although not all Web 2.0 tools strictly qualified as ³social media,´ the case uses these terms interchangeably.

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Cisco: Social Media
representatives of each function and operated by consensus. The model was markedly different than the one it replaced, and not all executives were able to adapt, but the collaborative approach was well-suited to leverage emerging social media and Web 2.0 tools, and it became firmly embedded in the organizational culture. In addition to culture and structure, Cisco¶s explicit objective to have employees use the communication products that it sold to enterprise customers also played a played a major role in driving social media use, especially as the company increased its focus on video technologies.

Early Social Media Activities
Corporate Communications (CC aka PR) initiated the precursor of social media in 1999 when it launched News@Cisco, the brainchild of a senior executive who had a vision that everything related to communications was going to move online. Initially, News@Cisco was the hub for global distribution of online press releases and other news stories, but it quickly transitioned from text-based to multimedia-rich material, introducing in 2000 the Cisco Video Portal. In a conscious effort to promote video, the portal became a major component of the site, centralizing customer testimonials and videos from across the company. A major focus of this activity was changing the type of video that PR produced. In place of longer, costly, ³video news releases,´ which were distributed to broadcasters, the group pioneered short-form videos that were high production quality but featured a two-minute news-style format more conducive to online mass down load ± a model that other companies started to imitate. In February of 2005, under the guidance of CC, the Government Affairs team launched Cisco¶s first corporate blog - High Tech Policy (HTP). At the time, there were major issues, such as Net neutrality and stock option expensing, that impacted the technology industry, and Cisco wanted to use a vehicle, outside standard PR, to engage people and have its voice heard on these issues. More specifically, the goal was to reach influencers and key decision makers in Washington, D.C. and have a limited number of quality conversations rather than a mass audience. For Cisco, like other early corporate bloggers, the High Tech Policy blog was an experiment, with little sense of the level, type of following, or responses it might generate.

New Media Group: Institutionalizing/Expanding Blogging and Formalizing Policy
In spite of the HTP blog and News@Cisco¶s initial groundbreaking activities, Cisco recognized that it had not been keeping up with emergent activities in the on-line world, and in mid-2005 it formed the New Media Group (NMG) under the leadership of Amy Paquette and Jeannette Gibson, both from PR. In addition to overseeing News@Cisco and HTP, NMG was charged with reviewing and assessing new Web2.0 communication tools and functions and their potential expanded roles at Cisco. Over the following year, Paquette and Gibson studied the growing blogging universe, identified additional corporate topics and began to develop policies to broaden and formalize the use of blogs in external strategy with three blogging goals: y y Create conversations with customers, partners, employees, and the public. Provide a platform to discuss Cisco¶s strategy and its technology vision, including the objective of increasing visibility and connection with consumers. Although Cisco¶s business was almost entirely B2B, its long-term strategic vision included consumers, and in 2005 Cisco launched the Human Network campaign.

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Cisco: Social Media
y Foster thought leadership by publishing subject matter experts on behalf of the company, expanding the notion of company spokespeople beyond those trained in PR techniques to include anyone with something of interest and value to contribute.

As the High Tech Policy blog gained traction, in 2006 it served as a seminal point in social media evolution. Cisco, Google, and Yahoo! were accused of modifying their products for the Chinese government, and, in addition to a PR response, Cisco used the blog to disseminate its message, including the entire transcript of general counsel Congressional testimony. The Wall Street Journal wrote a story on the issue based entirely on Cisco¶s blogs - the first time a major publication used a blog, rather than a PR department, as the source for a news article. The fact that the blog owner was listed in the article along with senior leadership conveyed the new power of bloggers and blogging, as Gibson described: That was a defining moment in corporate blogs, and helped people realize that information is out there for anyone to use and grab, and you don¶t need those traditional methods of calling up the PR department just to speak to an executive -- you can find them on the blog. The period between 2005 and 2007 was one of experimentation in an effort to determine what generated the greatest value for the company. Eager to ³dabble´ in new communications technologies and be on cutting edge from a leadership perspective, in late 2006 NMG developed a Second Life presence. 2 The first version had 10 (Cisco-related?) avatars, and a later iteration, which involved Chambers, drew 150 ± small numbers by standard marketing metrics but considered a success as an experiment in a new social media forum that often involved a substantial degree of engagement. Also in the fall of 2006, NMG launched technology-focused blogs on three corporate priorities: Mobility, Collaboration and Application-Oriented Networking. The China privacy issue and WSJ story provided a major boost both to the visibility of Cisco¶s blogs and to the company¶s credibility and transparency, and the blogs gained a small but solid following. Cisco sought to encourage additional blogs aligned with twenty defined business priorities that advanced overall corporate strategy. The goal was to articulate Cisco¶s position and technology solutions around these priorities, and there was particular focus on areas related to market transitions and on issues that were generating significant on-line discussion. To help the corporate blog program get up and running, New Media proactively recruited subject matter experts and executives from functional areas who were aligned with the priorities, and it managed a rigorous education and training process to prepare them for launching their blogs. At the outset, blogging was viewed by many to be extra work of uncertain value, and, as Paquette described, ³it was twisting arms to get people to do these.´ To encourage participation, NMG recommended that teams of three to eight people share the workload and the voice on each topic. The blogs chugged along with weekly posts and few comments until a seminal point occurred in January 2007 when Cisco sued Apple over the iPhone trademark rights. With the PR department unable to handle the influx of calls and emails on the issue, it convinced Cisco¶s senior counsel, who had a decidedly disapproving view of the entire blog phenomenon, to put out an objective, factual statement that laid out the company¶s position on the merits of the suit.

2

Second Life was a virtual world on the Internet in which participants, called Residents, interacted with one another through avatars ± socializing, creating and trading properties and services, and engaging in a variety of activities.

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Cisco: Social Media
Within 24 hours the blog had 77,000 views and 350 comments, evenly split for and against. It was the first time Cisco had used a blog at such a senior level, and Paquette described the impact: What that said to us was, ³if you have something to say, people will listen, and also comment.´ That was a huge awakening, a real key turning point because people saw that it wasn¶t just about ³blogging,´ it was really about engagement. After that we really saw an uptick on the whole blogging program because people saw the power of the blog. They started thinking, ³how can we use the blogs to communicate our messages?´ The Cisco/Apple blog incident persuaded more executives to contribute to the blogs, and NMG began publishing monthly blog metrics reports. Then Chambers added a competitive element, challenging the senior staff to blog about critical issues. The monthly metrics soon started to attract considerable attention as executives vied for blogging bragging rights. To avoid the blogs sounding too institutional, there was a strict policy that blogs (and subsequently Tweets) had to be composed by the named executive - no ³ghost-writing´ permitted. Between 2005 and 2007, News@Cisco continued to hum along as a public forum for presenting, primarily in video, press releases and customer stories. As with blogging, Chambers challenged the executive team to contribute to podcasts for the site, creating a robust podcast series. Quarterly metrics tracked the downloads, and PR presented the executives with ³silly trophies´ to honor the quarterly winner. In late 2007, NMG launched a new version of the site that facilitated the use of Web 2.0 technologies, such as Flickr. Twitter feeds started in 2008 and in mid-2009, the first Facebook page was launched. The new site evolved into the social media hub, enabling NMG to implement and formalize Cisco¶s brand presence across multiple sites. The hub, which provided access to all social networking sites, such as Twitter, Facebook, and Flickr, and had a live blog feed, was the focal point of engagement, as Gibson described: That was where we focused on adding more interactivity, creating more engagement with our audiences, looking to understand the importance of sites that are outside of our domain. People search Google and find you from multiple orientations, so you¶d better have your contacts optimized, and you better be thinking about your presence across multiple sites on the social web.

Governance
As Web2.0 technology use expanded, the New Media group managed the platform and focused considerable attention on developing governance policy. Cisco¶s legal department was ³very uncomfortable´ when blogging started in 2005, and policy became a critical priority to protect Cisco and its employees. Policy focused initially on blogging but then extended into areas such as Second Life and eventually into a broad social networking policy that developed guidelines for educating the workforce about all aspects of on-line behavior. In addition to overseeing activities on corporate-sponsored platforms, governance policy had a role in the many ³personal´ blogs, Tweets and FB posts, where employees often commented on Cisco-related issues. Such commentary was allowed, provided the sites displayed a company-provided disclaimer. Some policies had to evolve to respond to the activities and developing ³norms´ of the on-line world. One example was the use of LinkedIn to offer employment-related comments about associates and friends. Providing such references was against Cisco¶s HR policy, and was part of the Cisco Code of Business Conduct that every employee was asked to sign. Unable to ignore that the practice on Linked-In was becoming pervasive, and also faced with growing numbers of employees, 39,000 of whom were on Linked-In, indicating that they had a conflict with the Code, Cisco made an adjustment, allowing references on third-party sites with

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Cisco: Social Media
appropriate disclaimers. As one executive described: ³We can¶t ignore that people are on LinkedIn and such sites making recommendations, so we needed to adjust from a leadership perspective to show that we¶re not in the Dark Ages.´ Although leadership believed that ³generally, employees genuinely want to do the right thing,´ there were an increasing number of instances in which lack of knowledge about appropriate use of social media was creating potentially troublesome situations. Mindful of the growing risks to Cisco, in mid-2010 the compliance team recommended required social media training for all employees. Marketing with Social Media The Data Center Marketing team first experimented in a significant way with social media in 2007, when it used blogging as part of its communications effort to launch a new product. Historically, Cisco¶s marketing efforts placed significant emphasis on product launches, which were classified as Tier 1 or Tier 2 depending on the projected business impact and market reach of the new product or product line. 3 When the Data Center product launch occurred in 2007, Marketing recruited established Cisco bloggers to describe and engage customers and industry observers in conversations about the new product and its capabilities. Measurements of blog pick-ups, reach and impressions were calculated to be worth $250,000, based on the cost of achieving those metrics through traditional marketing activities. The success of the Data Center launch led other marketing groups to experiment with the power of social media. In March 2008, when Suraj Shetty, vice president of Marketing for Cisco's worldwide service provider marketing group, challenged his team to do things differently in launching the ASR 1000 series routers, they turned to social media. Conventional launches of such major products typically involved flying in more than 100 executives, media and industry partners from around the world, distributing product info to press and customers, and running ads in business and trade publications. The messages and ads were static, the engagement uncertain and the cost substantial. Moreover there was little engagement with stakeholders before or after the event; as one marketer described: ³We just moved on to the next thing.´ The goal was to use social media to make the launch dynamic, interactive and engaging - involving the Human Network - while consuming fewer resources. There was some pushback, however, from senior leadership on taking such a radical departure from standard practice, especially on a major launch, and some executives argued for a less ambitious approach ± retaining the physical event and using social media simply to promote it. The Data Center launch and other smaller successes gave the marketing team and its VP sufficient confidence to ³put their necks on the line,´ and ³jump in with both feet.´ The ASR-1000 launch spanned a three-month timeframe, including pre and post launch activities. Leveraging the full box of social media tools, Cisco built a community and collected registrations before the event, conducted a virtual launch and maintained engagement over the following months (Figure 1). Cisco retained some traditional marketing activities, such as email campaigns and press releases, but most were eliminated, resulting in substantial savings of senior executive time. Complementing the different launch process, the marketing team used lighter, more humorous content and style in its videos - Santa Claus, Cupid and Unicorns talking about the network challenges they were facing - than was typical of Cisco¶s customary approach:

3

On average there were three-to-four Tier 2 launches a quarter and three-to-four Tier 1 launches per year, most occurring during the fall (October-November) and spring (February ± May) seasons. Additionally there were numerous product ³announcements´ to herald new features or enhanced functionality for existing products.

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Cisco: Social Media
The results of Figure 1: ASR-1000 Launch (this could be moved to an Exhibit) the launch provided compelling evidence of the value of social media. Nine thousand people attended the virtual event, 90 times the usual audience size; there were more than 1,000 blog posts and 40 million online impressions, and it generated three times the usual number of press articles. Noted as one of the top five launches in Cisco history and winner of the Leading Lights award for Best Marketing, the ASR1000 launch cost one-sixth that of a conventional event, and, additionally, saved an estimated 42 thousand gallons of gasoline. Following the success of ASR-1000, all launches adopted the three phase approach (pre-launch, launch and post-launch), using social media to build and foster relationships. LaSandra Brill, senior social media marketing manager described the change: ASR-1000 was a huge testament to the power of social media, and it was another milestone for Cisco. It persuaded all the other teams to adopt the process we used, and it fundamentally changed the way we do launches. Blogs, Facebook, Twitter, YouTube became part of the basic plan. Instead of bumps and valleys we began nurturing sustained conversations. It was no longer just launch something and move on. For several years Cisco measured its virtual launches against the traditional model, but as the pervasive use of social media expanded throughout the organization, that former model lost it validity as a point of comparison. Based on interviews with internal stakeholders, in mid-2010 the Cisco Social Media Marketing team developed and introduced a new measurement framework to allow apples-to-apples comparisons of the impact of social media across the company, with metrics mapped to internal tools (Exhibit 4) ±

Broadening the Scope
By 2010, Cisco¶s external social media activities were extensive, including more than 79 Cisco Facebook groups and 150 thousand Second Life visitors (Exhibit 5). There were 100 active Twitter feeds, and CTO Padmasree Warrior had more than a million followers (one of the largest followings inside or outside technology), attesting to the power of such tools to engage stakeholders and generate feedback. Twitter was also used for such activities as hosting events (³Tweetups´) and conducting polls to secure immediate feedback during events such as Cisco Live. In addition to the core blogs that espoused and explained strategic corporate topics, use of blogs, many in video, expanded to increase engagement with channel partners and other groups. Cisco tracked the ³conversation prism´ created by all the social media/Web 2.0 tools on multiple dimensions: topics (e.g., cloud, collaboration), product area (consumer, mobility), network (e.g., Twitter, Facebook), and network category (e.g., blog, video), and articulated the role of those conversations explicitly as a social media strategy (Figure 2).

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Cisco: Social Media
Although the New Media Group Figure 2: Social Media Strategy oversaw company-wide social media Participation is the Currency of the New governance and training, its organizational Economy heritage and relationship to PR limited its purview to a communications perspective. The accelerating growth of Web 2.0 activity ENGAGE and LISTEN to and the recognition that it extended beyond apply the the domain of ³communications´ argued for learning conversation a change in organizational stature and Meaningful mission. In early 2010, the focus of social Participation media activity migrated to the corporate marketing organization with the formation of a new unit ± Global Social Media Marketing, PREPARE: led by Gibson The former New Media Business Group, which was re-titled Social process Communications, and which managed the change News@Cisco site, was responsible for social media that related directly to communications, especially those activities that targeted industry analysts, observers and influencers. The broader charter of Global Social Media Marketing provided an opportunity both to centralize oversight of all other social media activities and to expand their use and application. It undertook responsibility for Web 2.0/SM strategy, tools, governance, training, and measurement across the company. Paquette described: It was really a milestone for Cisco that put a real wrapper and a central organization around social media, acknowledging that we needed a central point for strategy and governance. Social media started as a communications tool but now involves practically every functional area of the business, and we had lots of people communicating externally with multiple audiences. We needed a single organization that was empowered to drive this and set governance and to put training requirements on our employees and really help them succeed in this Web 2.0 world. Otherwise we risked becoming very fragmented and siloed with people thinking they were doing the right things but actually ending up ³running wild´. Governance really prompted a lot of this.

Internal Social Media
The official focus of social media started externally for strategic reasons, but also because it was easier to control and focus a number of external blogs than to deploy tools internally for 65,000 employees. Internal application of social media tools ± wikis, blogs, YouTube, etc., started in 2006-2007 with a range of disparate, ³stealth initiatives,´ leveraging a culture that fostered innovation and experimentation. Cisco employees, encouraged to use whatever technology they needed to do their jobs, began to employ social media tools at the workgroup and functional level. As one person described: ³For a while it was the Wild West. People had servers under their desks running private networks that corporate IT didn¶t know anything about.´ Within a short period these independent efforts created multiple silos of social networks ± sales, engineering, sub-groups in engineering - that were not interconnected and which began to detract from broader enterprise collaboration. As one manager described, ³We were losing the power of the social graph. It was getting divvied up into all these isolated fragments.´ Senior leadership determined the need to put guidelines around the use of these tools and actively

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Cisco: Social Media
support them, and in late-2007, corporate management developed a plan to standardize and centralize the separate Web 2.0 activities and add new social network functionality to several platforms. Collaboration Business Services (CBS), a Board that reported to Corporate Communications and partnered closely with IT, was set up as the centralized business sponsor for social media. It provided centralized tools that departments were encouraged to use, but it did not take a ³dictatorial approach,´ according to its Director Mike Mitchell We needed to create a process and harness our people¶s efforts without constraining their creativity. We¶ve been able to create a strategy to promote alignment, consistency, and proper governance - and to enable innovation. CBS (which evolved to be called C&C ± Communications and Collaboration Board) created a group - Communication Center of Excellence (CCoE)- that served as the hub for collaboration and external social media knowledge. One of the first initiatives was to import the various local wikipedias created by functions (Salespedia, CEO-pedia) onto a standard platform to create Ciscopedia, a compendium of information about the company. Another early effort was upgrading the on-line corporate directory to enhance its value with functionality such as an expertise locator. Wiki capability in the directory structure enabled employees to import their internal blogs from the corporate blogging infrastructure or import videos created for internal purposes. Boosting the directory, which was the most-used internal web-based application, significantly increased its use and helped to drive critical mass onto the corporate-sponsored social media site. CCoE evolved to serve as a repository of knowledge, best practices and tools which Cisco organizations could tap to learn how to build a community or website using discussion forums, blogs, formal and informal content. With more than 30 tools - everything from WebEx to unified communications to wikis and blogs ± and extensive information, the CCoE site played a critical role is expanding the use of social media internally, with a focus on the use of SM tools to solve defined business problems ± not simply for their own sake. The transition to centralized SM services was relatively smooth, and within a year, there was 90% compliance. Although mainstream Web 2.0 tools - wikis, blogs, video sharing, collaborative workspaces ± were all supported by corporate IT, centralized social media was not intended to entirely eliminate independent activities. Individuals and groups continued to experiment with novel functionality, though policy strongly discouraged autonomous initiatives that duplicated corporate sponsored functionality, as Mike described: ³when somebody puts up a wiki server, now there¶s got to be a good reason for it, because they can have access to the corporate wiki infrastructure for free and everything¶s connected.´ That funding model, in addition to corporate IT support, helped ensure compliance at ³about 90%.´ Independent initiatives required separate departmental funding, while corporate systems were free. Moreover, access to the corporate systems was relatively open: anyone could have an account and set up their own blog, with the requirement that every blog be owned by an individual - no anonymous blogging. Many social media elements, however, continued to be developed by innovators outside the centralized unit. An engineering team in Europe developed Cisco-Vision, Cisco¶s internal YouTube. And a TAC (Technical Assistance Center) team in Belgium initiated Cisco¶s presence in Second Life after a team member, who was exploring the virtual site, was approached by a real Cisco customer who said: ³Hey, I didn¶t know Cisco was in Second Life. Can you give me a demo of this new product I heard you just announced?´

Integrated Workforce Experience

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Cisco: Social Media
Internal social media/Web 2.0 crystallized in the development of the Integrated Workforce Experience (IWE), a platform developed by CCoE that created a dynamic experience for employees, enabling them to connect, communicate and collaborate in innovative ways. IWE had three components: people, information, and communities (PIC) (Figure 3). Although aspects of those components had been in place for several years, the full IWE vision was launched in 2009. One metric of its use: by the end of 2009 there were 20,000 internal blogs. Figure 3: IWE Components
People: The revamped Employee Directory 3.0, modeled after a Facebook homepage, provided access to the continually evolving store of Knowledge embodied in Cisco employees, who could be searched by expertise, school affiliation, interest or other parameter. The Directory recorded and displayed individuals¶ expertise as revealed and captured in blogs, videos, PowerPoint presentations and other materials. Any information posted into a community or otherwise uploaded into the internal social graph was linked by default to an employee¶s directory page (though one could elect to opt out). The tool enabled rapid connection to the global workforce to identify subject matter experts, to staff a formal project team or to track down others interested in non-work related activities. Figure 3: Example of Value of Informal Content: Information: ³Ciscopedia´ an editable site where employees could find company information or Formal content: marketing had articles with links to SMEs. Projected in 2007 to have 20,000 pages, the internal wiki page a million pages by 2009 and had become Cisco¶s ³ultimate collaboration tool.´ information with product Informal: discussion around that particular product and its use in the Communities: personal and professional communities with shared affinities, responsibilities or field and how a particular engineer tasks, ranging from avocational interests e.g., (mountain biking) to work-focused (e.g., Women¶s found an especially good use for Action Network) topics. A community might include a set of all Directors, all managers workingit. on a particular account, or a team that is working on the project. Community members share content through discussion boards, blogs and other tools.

IWE emerged from the evolution of Cisco¶s corporate intranet which had been under development since 2000 and offered a robust site that provided employees with a range of services, from HR forms to product information. The Intranet homepage became a communications vehicle for global distribution of company news and highlights on everything from product innovations to culture-forming activities, such as Cisco-wide giving campaigns and the company¶s perspective on social responsibility. The second phase of the Intranet started in 2007, when it began to ³bolt-on´ piecemeal social media tools and applications - Chamber¶s monthly blog, discussion forums, wikis, messaging, WebEx Connect - in response to the corporate mandate to centralized the disparate SM activities emerging around the company. With the rapidly expanding internal use of social media came an explosion of informal content, much of which had value worth capturing, with the associated challenge of being ³almost impossible to make sense of and keep up with all that information.´ Cisco wanted to encourage and tap the generation of informal content, which could Figure 4: Example of Value of significantly enhance the formal information about a specific Informal Content: issue. (Figure 4) Ciscopedia and the Directory were vehicles Formal content: marketing page for linking into the wisdom of the organization to capture and with product information share the informal knowledge. They provided a peopleInformal: discussion around that centric view and an information-centric view into the mass of particular product and its use in the content that people were generating. field and how a particular engineer The CCoE team developed a user interface for IWE,
found an especially good use for it.

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Cisco: Social Media
called MyView, to facilitate organization and management of personal data and provide a ³heads up view of the day in context´ for an employee. MyView, developed and rolled out in 2009-2010, functioned much like a Facebook ³wall´ on which a real-time news feed updated the status and activities of all PCI components related to an individual: communities involved in, topics followed and people of interest. Additionally, all corporate communications on the CCoE homepage streamed onto MyView and could be customized to suit an individual¶s position and organization. The page had links into visual voice mail, email and calendar and also featured an environment to import widgets, portlets and gadgets. MyView provided an aggregated, personalized view into everything that each employee was doing. Because the quantity of generated content defied traditional hierarchical organization, Cisco was engaged in a massive fundamental shift to dynamic tagging to make sense of the information. All formal and informal data were semantically tagged based on social interactions and algorithms relevant to each individual and then entered into the IWE system. The tagging, which occurred both automatically through Cisco¶s Pulse product and through self-definition and self-tagging, allowed data to be streamed to each person¶s MyView, providing updates on communities, people and information. One manager likened it to ³Amazon ± how it makes recommendations based on what you are doing, the role you are in and the choices of other people like you ± we are taking that to the enterprise level and basically allowing appropriate information to find you.´ Into the contextual aggregation of information, people, communities, MyView technology integrated rich communications. Hovering over a person on a ³buddy list,´ one could click to dial up, IM, email or schedule of meeting. The people in the ³buddy list´ could change dynamically based on the context. The default list might be direct reports but would change to the people on a project team when the individual was engaged in project-related work. In mid2010 Cisco launched a commercial product called Quad based on the IWE platform. All of Cisco¶s external and internal social media and collaboration activities made extensive use of the company¶s video products and technologies, and Cisco sought to be the global leader in internal use of video for communication and business collaboration. Major company meetings were primarily virtual, with a few hundred in attendance and proceedings broadcast to remote locations via TelePresence, streamed to desktops and saved for video on demand. CEO Chambers had a regular video blog as well as a monthly ³birthday breakfast´ - an interactive video conference and streaming webcast where he answered questions for two hours. In 2009 Cisco purchased the maker of the Flip video camera, Pure Digital, and provided thousands of cameras to employees, who used them for such activities as creating updates for globally dispersed teams and product updates for rolling out training or for new software.

Communication and Collaboration
A core objective of the internal social media/Web 2.0 technologies embedded in IWE was to enhance communication and collaboration ± a need magnified by Cisco¶s size and globally dispersed workforce: With 24,000 people at San Jose HQ and 42,000 around the world, it was common to have project teams comprised of members located on multiple continents and across myriad time zones. Cisco¶s vision was to optimize collaboration to achieve business benefits by aligning ³Technology, Culture and Processes.´ In addition to the IWE platform, which served as the core technology component for collaboration, another key technology element to maximize the effectiveness of collaboration was Cisco¶s use of a hierarchy of technologies based on a ³time to trust´ (TtT) paradigm. Recognizing that face-to-face meetings were the most powerful way to build trust between individuals but were not always possible, Cisco developed TelePresence, a

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Cisco: Social Media
life-size, high-definition, surround-sound, video conferencing environment that was a near-analog to face-to-face meetings. Employees used TelePresence to accelerate time-to-trust on occasions such as the initial meetings of new geographically-dispersed teams. After a sufficient level of trust had been established, the next level in the TtT paradigm was desktop video conferencing, using the company¶s WebEx system. Audio calls and text-based communications comprised the lowest level and were used when a high degree of trust was in place. The historic openness of Cisco¶s culture provided fertile ground for promoting collaboration. The Culture component of the collaboration framework included fostering social media-oriented behaviors, such as participation in blogs and wikis as well as major changes to corporate compensation and reward systems. Chambers set a high-level example of active blogging: by 2010 he was in his fourth year of monthly blogs, which had transitioned to video format in 2007.4 In 2010 Cisco was engaged in a multi-year effort, Workforce 2020, to review and develop a holistic approach to compensation and performance management to incent people to behave collaboratively. In fundamental ways, a collaborative environment, in which people worked on multiple projects in cross-functional teams, required very different systems than a work environment primarily based on hierarchy and function ± Cisco¶s traditional structure. In mid-2010, the vision of the collaboration framework had been solidified with the three components - Technology, Culture, Process - at different stages of progress and encountering various execution challenges. Technology ± IWE ± was two-thirds developed: the Directory and Ciscopedia were fully functional on a shared platform, and MyView was being developed on a second platform. The goal was to consolidate the platforms in 2010 and build out the communications infrastructure. The conceptual shift from hierarchical organization of data to relational tagging was a significant mindshift. Bridging technology and culture was the challenge of weaning people away from the habit of using email as the primary mechanism for communication and information sharing, especially with multiple parties. Though not intended to replace email, which was originally developed and is optimally suited for one-to-one communication, MyView provided better, more efficient tools for collaborating within a community. As one manager stated: ³This is big move - a cultural shift that will take time.´

Business/Company Impacts
Ultimately, the value of collaboration and social media lay in its tangible impact on improving business operations. To that end business Cisco was also engaged in a comprehensive enterprise-wide initiative to map and analyze its business processes, looking at work flow, activities, internal interactions, and communications. The effort then identified capabilities available through IWE and related technologies, such as TelePresence, that could be employed to change processes to improve efficiency or effectiveness. The deep analysis was combined with an experimental approach in some departments in which people jumped in and tried out Web2.0 tools to assess potential for process change.

4

According to one executive, Chambers initially ³wanted no part´ of video blogging, convinced that no one would pay attention. But the hundreds of comments generated by his first video blog provided an ³eye-opening experience,´ that led him to become a major proponent of the technology and use video for virtually all his internal communications. ³He lives by his Flip.´

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Cisco: Social Media
A core concept used in the business Figure 5: Dimensions of Interaction process analysis to improve collaboration was that Source: Cisco of human latency: the idea that Web 1.0 tools had enabled the acceleration of transactions to the point Reach: Capability to identify, access and where business processes were no longer employ internal and external resources to influence better business results. constrained by transactional processing speed but macro-processes were constrained by human Richness: Capability to effectively and latency ± the slowness of applying expertise to a efficiently foster the development and given situation. Human latency, in turn, was communication of new ideas, concepts and correlated with tacit knowledge, the storehouse of strategies to make decisions and take information people carried that has historically actions. been difficult to share and access. Cisco identified Openness: Capacity of individuals, teams collaboration impact zones ± places where and organizations to have visibility into and information, expertise, or interactions occurred ± capability to contribute to the results of a as high value collaboration targets constrained by work effort. human latency. The ability to use social media tools to access the necessary information or Speed: extent to which new collaboration expertise offered the potential for reducing that processes can increase the speed get latency and accelerating macro-processes, such as things done and respond to changes. time to sell, time to market for a new product, or time to resolve a customer issue. To help define the potential scope of collaboration, Cisco considered four dimensions of interaction - reach, richness, openness and speed ± that impact access to tacit knowledge and reduction in human latency. (Figure 5). Cisco published a report in 2009 that described the business impact of social media and calculated $691 million in fiscal year 2008 savings - a 900 percent return on invest - due to collaboration and Web 2.0 activities (Exhibit 6). Savings resulted from a range of efficiency, cost reduction and performance enhancing drivers (Exhibit 7) enabled by TelePresence and Web Ex, and other technologies. There were also examples of revenue gains, such as Linksys division sales increases generated by Twitter. Examples of specific social media/Web 2.0-enabled savings included: y Sales support: Social media tools enabled a team to virtualize its sales support activities. In place of being assigned specific customers, staff worked from home or local offices and functioned as a pool, using WebEx, TelePresence and other tools to respond to customer queries. In spite of initial anxiety about loss of direct relationships, the team found that customer contact increased 40%, and customer satisfaction improved 30%: the results of increased and more timely communication. Source Program: The Source program was responsible for sending product experts to customer sites and was constrained by the challenges of scheduling and travel, creating a trade-off between relevant expertise and timely response. By virtualizing the experts and using TelePresence, the program was able to deliver a richer experience for the customer by providing the most appropriate expertise more quickly. It also significantly improved the work life of the experts. By early 2010 the program was producing annualized benefits of $100 million.

y

As social media/Web 2.0 tools gained traction, they played a key role in the governance restructuring and new management model that Chambers launched in 2002. By 2010, more than 750 leaders served on boards, councils and working groups responsible for 33 market adjacencies.

13

Cisco: Social Media
The boards reported to nine councils which reported into the operating committee. Board members were typically located in geographically diverse sites around the world and relied on social media tools to conduct business day-to-day. Cisco¶s goal was to increase participation in the governance system to 2500 employees

Innovation
In addition to enabling innovation through enhanced collaboration, Cisco used social media to drive dedicated innovation initiatives. One was I-Zone, an internal wiki where anyone could submit ideas for Cisco products for review by a group of ³professional innovators´ within the company. Basic ideas, such as tweaks to functionality of existing products, were passed on to the respective product group. New product ideas went through a more rigorous vetting process internally, and the best were submitted for use by an executive training program, Accelerated Learning Forum (ALF). Cross-functional ALF teams developed full-fledged business plans and presented them to a review panel. Ideas that passed the review were incubated, with investment based on milestone performance. A similar process I-Prize, was established for externallygenerated ideas. Winners were offered a cash award and jobs at Cisco with an opportunity to take their idea through the incubation and development process. By late 2009 a number of ideas had made it through to the market, including TelePresence, digital media system (DMS) streaming products, and Pulse. When sales reached a threshold scale, products were pulled out the emerging technology group and integrated into mainstream corporate Cisco.

Social Media/web 2.0 Collaboration Nirvana ± Organization Transformation
Cisco saw social media-driven collaboration ultimately as enabling a fundamental transformation of the company¶s structure and way of operating. It viewed that transformation process as widely applicable to organizations and developed a model, the Cisco Collaboration Framework, which formed the basis of a pan-industry effort, the Collaboration Consortium. The model posited three phases of an evolution in the use of social media: investigative, performance and transformation. Exhibit 8 describes how various Cisco social media/Webs.2.0 technologies and initiatives map against this model. Investigative: experimenting with social media tools and applications to accelerate existing processes. This phase, dubbed ³single tool, single task,´ typically involved use of social media/Web 2.0 tools to increase individual productivity or enhance isolated processes. Cisco¶s initial internal use of social media internally was a prime example of this phase, as was the C-vision technology, originally made available inside the firewall without a defined strategic goal. Cisco articulated a series of activities within the CPT realm to help ensure optimal gain in this initial phase (Exhibit 9) Performance: leveraging collaboration as an organized, supported platform to start fundamentally changing processes instead of just accelerating existing processes. While the investigative phase focused primarily on adoption of new Technology, achieving Performance gains required progress in the People and Process aspects of collaboration. It also required a formal establishment of a collaboration strategy. Cisco was in the midst of this phase in 2010 and was looking at leveraging and transferring examples such as the virtualized sales support team. Transformation: using collaboration to transform the organization by reinventing work flow, structure and processes. In an advanced form, such a transformed organization might have employees function in a ³digital swarm,´ responding or recruited to engage on work streams

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Cisco: Social Media
that flowed from the council and board system. Such streams would function on a 24-hour schedule with virtual, global teams, and any employee with availability, ability, and accountability could work on one of the streams, either full time or part time on multiple streams. Social media tools would enable the identification of the most appropriate people based on expertise, experience, relationships and context and enable location-blind collaboration.

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Cisco: Social Media Exhibit 1: Cisco Selected Financials (1995 ± 2009)
2009 2008 2007 2006 2005 2003 Sales ($Bs) 36.1 39.5 34.9 28.5 24.8 18.9 Net Income ($Bs) 6.1 8.1 7.3 5.6* 5.7 3.6 Emplys (Total-Ks) 65.5 66.1 61.5 49.9 38.4 34 Emplys( Int¶l-Ks) 28.5 28.7 26.5 19.6 11 9 *included non-cash stock compensation charge of $836 million 2001 22.3 (1.0) 38 11 1999 12.2 2.0 21 4.4 1997 6.4 1.0 11 2 1995 2.2 .4 4 .6

Exhibit 2: Cisco Technology Segment Presence and Market Share

Source: Cisco Corporate Overview

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Cisco: Social Media Exhibit 3: Cisco Value and Culture

Company Vision

Changing the Way We Work, Li e, Play and Learn
Company Mission

Shape the future of the Internet by creating unprecedented value and opportunity for our customers, employees, investors and ecosystem partners.
AspirationalGoal

Best in the world. Best for the world

Cisco Culture
Continuous Impro ment/ Quality Team Stretch Go ls No Technolo y Profit Contribution Gi ing Back / Trust / Reli ion (Frugality) Fairness / Integrity Collaboration Market Transitions Fun Inclusion Teamwork Open Dri e Change Empowerment Communication Inno ion

Customer Success

17

Cisco: Social Media Exhibit 4: Social Media Measurement Framework

18

Cisco: Social Media Exhibit 5: Social Media External Engagement Social Media Activity Metrics
900+ videos; 700k views Top video: TP demo (226k views) 350+ podcasts 200k streams Rated 5 stars on iTunes! 20 external blog 350k views/qtr # comments up 164% 79 Cisco groups with 85k fans, up 29% 16k employees on Cisco group 23 Cisco feeds with 47k followers, up 60% Top exec: P. Warrior 1M+ followers 300+ photos 400k views, up 100% Top set: Cisco Live (2k views) 150k visitors 50+ events 4.5+ CSAT rating Source: How Cisco uses Social Media (09/09)

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Cisco: Social Media Exhibit 6: Collaboration Initiatives: FY08 Costs and Savings Initiative
Remote Collaboration (TP/WebEx/UC Telecommuting Specialist Optimization (SOAR) Sales Productivity (NEW) Connected Workplace Deal/Order Acceleration via UC Mac Wiki C-Vision and Video Blogs Total

FY08 Benefits, $ Million
$378 $277 $62 $26 $13 $2 $4 $10 $772

FY08 Costs, $ Million
$75 Included in Remote Collaboration $1 $3 $2 <$0.1 <$0.1 $0.5 $82

Source: Economics of Cisco Collaboration Story

Exhibit 7: Drivers of Collaboration Value Initiative
Reduce costs to improve profitability Save time to increase efficiency Speed process to increase agility Transform business to increase growth Total

FY08 Benefits, $ Million
$239 $380 $92 $61 $772

Source: Economics of Cisco Collaboration Story

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Cisco: Social Media Exhibit 8: Collaboration Initiatives
Focus Description Remote Collaboration Telecommuting Specialist Optimization Sales Productivity Connected Workplace Deal/order Acceleration Mac Wiki C-Vision & Video Blogs Collaborative Management (26 initiatives) Enhance existing collaboration activities Personal Productivity Remote Collaboration Process Acceleration Establish new ways of collaborating Expert Access Knowledge Sharing Communities Transform the organization Boards

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Source: Economics of Cisco Collaboration Story

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Cisco: Social Media Exhibit 9: Steps for Optimizing Collaboration Framework Phases Investigative People
y y Define collaboration Help ensure executive lead the way Establish code of conduct Create IP and ND policies Develop collaborative decision-making processes

Performance
y Focus on collaboration readiness Reward crossfunctional teaming Reward information sharing and discourage information hoarding

Transformation
y y Define collaboration Help ensure executive lead the way Establish code of conduct

y y

y y y

y

Processes

y

Develop community of experts

y

Focus on collaboration impact zones

y y

y

Define collaboration Help ensure executive lead the way Establish code of conduct

Technology

y

y

Develop technology sandbox for experimentation Consider virtual teaming and collaborative processes

y

y

Build team workspaces and processes Create open technology architecture

y y

y

Define collaboration Help ensure executive lead the way Establish code of conduct

22