What happens when you adopt government bureaucracy into a business.

I came across this article on Yahoo! Finance and couldn’t help but smile:

Until today, we had nothing but respect and admiration for Cisco CEO John Chambers.  Now we’re wondering whether he has gone insane.

Check out Ben Worthen’s description of Cisco’s new senior management structure:

Mr. Chambers has replaced Cisco’s top-down decision making with committees of executives from across the company. Some teams provide strategic advice and evaluate the progress of these projects. In total, Cisco now has 59 internal standing committees…

It is not uncommon for top Cisco executives to serve on 10 or more committees and spend 30% of their time dealing with the issues raised there. Cisco said as it adds more businesses, it plans to expand the number of people who participate in these meetings from 750 senior employees to about 3,000…

Mr. Chambers said part of his goal is to make employees rethink how they work and what they work on. The new management structure “makes everyone uncomfortable, including the CEO,” he said.

What happens when decisions get made by committees?  They don’t get made.

In late 2007…H-P started promoting a warranty for its switches that provides free upgrades and support. Under Cisco’s new structure, a decision about how to respond to H-P’s offering was delayed as it worked its way through multiple committees, these people said. Cisco didn’t match H-P’s promotion until this April [2009], and during that period Cisco’s market share fell.

John says the new management structure is necessary if Cisco is to keep growing at an impressive rate (right now, it’s shrinking at 17%).

Emphasis mine throughout. And no self-respecting Star Wars nerd (that’s a contradictory phrase right?) would end this post without the noting the following quote:

Han Solo: “No time to discuss this in committee.”

Princess Leia: “I am not a committee!”