© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential The Changing Face of Leadership at Cisco Randy Pond Executive Vice President Operations, Processes, and Systems January 30, 2008

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential  Network Changes Way We Work / Live / Play / Learn  Network Becomes the Platform… IIN  All Forms Communication / IT into Network  Enabling New… Business Models Productivity Entertainment  Network Changes Way We Work / Live / Play / Learn  Network Becomes the Platform… IIN  All Forms Communication / IT into Network  Enabling New… Business Models Productivity Entertainment  Market Transitions… Customer Driven  Innovation… Build / Buy / Partner Collaborate  Technology and Business Architecture  Cross Functional Teamwork / Prioritization  Market Transitions… Customer Driven  Innovation… Build / Buy / Partner Collaborate  Technology and Business Architecture  Cross Functional Teamwork / Prioritization  #1 Product Leadership  Lead Layers 1-7 Convergence…  Leader in All Customer Segments  Quad Play Everywhere… UC  Leader in Collaboration / Web 2.0  #1 Product Leadership  Lead Layers 1-7 Convergence…  Leader in All Customer Segments  Quad Play Everywhere… UC  Leader in Collaboration / Web 2.0

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Enterprise Line of Business Service Provider Line of Business Commercial Line of Business Leadership Defined – Mini Silo-ed Cisco’s Consumer Line of Business Dedicated Marketing, HR, IT, Engr, NPI, Finance Teams Cause Duplication … But Allowed for Quick Movement and Enormous Scaling Power Dedicated Marketing, HR, IT, Engr, NPI, Finance Teams Cause Duplication … But Allowed for Quick Movement and Enormous Scaling Power

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Business Issues Examples Duplication Across the Business 146+  Quality Council  Product Quality Systems Steering Comm.  BU-Specific Quality Councils  Etc.  Quality Council  Product Quality Systems Steering Comm.  BU-Specific Quality Councils  Etc. Product Quality 44+  CA Bus Ops Entitlement  IOS Entitlement  Product Evolution Program (PEP)  Product IQ  Etc.  CA Bus Ops Entitlement  IOS Entitlement  Product Evolution Program (PEP)  Product IQ  Etc. Entitlement 10+  Channels Gray Market Project  Brand Protection  Remarketing  Etc.  Channels Gray Market Project  Brand Protection  Remarketing  Etc. Gray Market 7+  Deals Desk Automation (DSA)  Oracle 11i Advance Pricing  BU Policy Update  Etc.  Deals Desk Automation (DSA)  Oracle 11i Advance Pricing  BU Policy Update  Etc. Pricing

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Cisco’s Business Transformation History BustBuildout Pre-Tax Profit (Pro Forma) $K$K FY95FY96FY97FY98FY99FY00FY01FY02FY03FY04FY05FY06FY07FY08 Boom $B Revenue

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Today1980’s1990’s2000+ ProductionTransactionsInteractions Web 2.0 Collaboration Company Web 2.0 Collaboration… The Next Market Transition 3% 5% 10% 15% 1% Country 3% 5% 1% PRODUCTIVITY

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Operating Committee Functional Leadership Marketing / Sales / CDO / OPS / CA / Finance Functional Leadership Marketing / Sales / CDO / OPS / CA / Finance Shift to Functional Leadership Model Cross Functional Teams CQC SPBC EBC CBC BPOC Process for Process (DMAIC, RACI,SIPOC)Corevs.Context Process Definition (Levels 1, 2, 3) PortfolioManagement Master Black Belts and Foundational Project Management

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Business Process Operations Council (BPOC) Enforcing Decisions with Attention to Execution and Accountability Enforcing Decisions with Attention to Execution and Accountability BPOC Is a Cross-Functional Operations Leadership Team Focused on Driving Enterprise-Wide Productivity through… Making Key Operational Policy Decisions Making Key Operational Policy Decisions Developing and Deploying Cisco’s Corporate Business Process Framework Developing and Deploying Cisco’s Corporate Business Process Framework Aligning Similar Initiatives and Coordinating Investments Aligning Similar Initiatives and Coordinating Investments

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential John Chambers Randy Pond (Chair) Randy Pond (Chair) Cross-Functional Team of Executive Leadership Business Process Operations Council (BPOC) Kim Marcelis (OPS) Kim Marcelis (OPS) Rebecca Jacoby (IT) Rebecca Jacoby (IT) Manny Rivelo (Sales) Andy Starr (Sales) Andy Starr (Sales) Frank Calderoni (Finance) Karl Muelema (CA) Rob Redford (CMO) Jim Miller (Mfg) Jim Miller (Mfg) Don McLaughlin (HR) Pete Rukavina (Eng) Internet Capabilities Group  Increase Cisco’s productivity  Support BPOC operations Internet Capabilities Group  Increase Cisco’s productivity  Support BPOC operations Business Process Development Group  Accelerate Cisco’s process transition (frameworks, metrics, tools, training) Business Process Development Group  Accelerate Cisco’s process transition (frameworks, metrics, tools, training)

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential  Coordinate requirements with business segment councils  Focus on corporate operations strategy  Coordinate requirements with business segment councils  Focus on corporate operations strategy  Policy decisions  Executive mgmt attention to key issues  Policy decisions  Executive mgmt attention to key issues  Establish process infrastructure  QTC launches as first level 1 process  Process improvement projects  Establish process infrastructure  QTC launches as first level 1 process  Process improvement projects  Fund initial PMOs  Resource prioritization  Accountability  Fund initial PMOs  Resource prioritization  Accountability Foundational Projects and Quick Wins Corporate Initiatives End to End Business Processes Strategic Operations Evolution of the Business Process Operations Council (BPOC) Aug Dec 2002 Planning Identify and Sponsor Obtain agreement to address:  Resource alignment  Resolution of escalations  Accountability for progress Obtain agreement to address:  Resource alignment  Resolution of escalations  Accountability for progress  Priority trade offs  Roadmap alignment and sequencing  Priority trade offs  Roadmap alignment and sequencing

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Different Leadership Competency Needed to Succeed in Chaos “Continued Chaos” at Cisco Growing Business Volume Increasing Complexity Escalating Risk Escalating Risk

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Segment Councils and BPOC BPOC and Functions BPOC and Functions Operating Committee and Segment Councils Operating Committee and Segment Councils New Role for BPOC Tighter Alignment to Market Strategy Company Business Plan Company Business Plan Market Segment Strategy Business Capabilities Enablement (Policy, Rules) Enablement (Policy, Rules) Governance  Metrics  Prioritization  Decision making

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential SOX Compliance Single Source of Truth (Financial, Employees, Products, Customer, Quality) Commerce Transformation Services / Software Entitlement / CA Unified Foundation Functions Simplify, Standardize, Globalize, Align to Priorities Process Re-engineering Touches Every Function Cross Functional Integration and Partnerships Key Process Support the Business Idea to Offering Market to Order Quote to Cash Forecast to Delivery Issue to Resolution Optimization HR Customer Service Engineering Marketing Finance Sales Customer Advocacy Manufacturing

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Building Cisco’s Business Architecture for Productive Interactions Investing in Systems Strategic Initiatives Tactical Execution Re-Engineering Processes BUSINESS PROCESS MANUFACTURING HR SALES FINANCE NETWORKED INFRASTRUCTURE CORESTORAGE SECURITY WIRELESS IPT APPLICATIONS AND SERVICES ERP E-SALES SUPPLY CHAIN MGMT E-LEARNING

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Core vs. Context Model Risk Major Challenge Non-mission Critical All Other Processes Non-mission Critical All Other Processes Mission Critical Process Shortfall Creates Serious And Immediate Risk Mission Critical Process Shortfall Creates Serious And Immediate Risk Context All Other Processes Context All Other Processes Core Process Creates Differentiation That Wins Customers Core Process Creates Differentiation That Wins Customers Differentiation

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential The Cycle of Innovation Core Context Mission Critical Non-Mission-Critical Deploy Differentiation at Scale Deploy Differentiation at Scale Invent Differentiated Offering Invent Differentiated Offering Manage Mission-critical Processes at Scale Manage Mission-critical Processes at Scale Extract Resources to Reinvest for Core Extract Resources to Reinvest for Core 2. Deploy 1. Invent 3. Manage 4. Offload / Repurpose

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Manage 2. Deploy 1. Invent Productivity Opportunities Lie in Context 4. Offload / Repurpose Resources Needed Here Operational Excellence Productivity Operational Excellence Productivity Operations Gold Mine Growth Investments Innovation Growth Investments Innovation Core Context Resources Available Here Consolidate Standardize Optimize Consolidate Standardize Optimize

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Consolidate, Standardize, Optimize Non-Selling Repurpose Resources to Selling Core Context Mission Critical Non-Mission-Critical 2. Deploy 1. Invent 3. Manage 4. Offload / Repurpose Sales OPS Consolidate Standardize Optimize Consolidate Standardize Optimize Repurpose Resources to Selling Non-Selling Context Work

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Cisco Order Management Process Cisco Account Manager Credit Check Cisco Inside Sales Account Manager Cisco Inside Channel Account Manager Partner Account Manager Cisco Customer Service Cisco Customer Service Cisco Sales Credit Specialist Distribution Inside Sales Distribution Inside Sales Cisco Field Sales Administrator Partner Purchasing Partner Purchasing Customer

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Inter-Enterprise Opportunities for Productivity Customers Driving Productivity Across the Value Chain Partners Suppliers Cisco Support the Business Idea to Offering Market to Order Quote to Cash Forecast to Delivery Issue to Resolution

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Cisco-Centric Customer-Centric Cisco 3.0 Requires Fundamental Shift in Leadership Mindset What and how customers want Invest for customer Optimize for Cisco Collaborate to accelerate Cumulative portfolio approach Prioritize and deprioritize Global mandate

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Blueprint for Collaborative Leadership Operational Excellence Leadership Alignment Customer- Centricity Employee Commitment Total Cisco Experience Communications and Collaboration Communications and Collaboration Change Leadership Change Leadership Discipline of Continuous Improvement Collaborative Leadership

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential Don’t Confuse Leadership with Management  Transform people into new roles  Develop employee skills  Effectively deal with change  Cope with complexity and drive predictability  Set direction  Plan and budget  Fit people to vision  Fit people to jobs  Focus on inspiring  Focus on controlling tasks and outputs

© 2008 Cisco Systems, Inc. All rights reserved.Cisco Confidential In Closing  Opportunity lies in taking advantage of tremendous global opportunities  Process will help to lay a solid foundation  Collaborative Leadership will enable this new growth