Cisco Systems: Developing a Human Capital Strategy (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cisco Systems: Developing a Human Capital Strategy (A)
Like many technology organizations in the late 1990s, Cisco was booming. It grew so quickly, in fact, that it was bringing in up to 1,000 new employees each month. Cisco's solution was to acquire talent by buying small firms, topping out in one year with 24 separate acquisitions. However, in 2000 the dot-com bubble burst and Cisco quickly realized that it had another human capital challenge on its hands: How to develop, rather than hire, the strategic thinkers and leaders needed for the future. This case study explores the challenges facing Mary Eckenrod, Cisco's Vice President of Worldwide Talent, in developing a new human capital strategy to identify and develop leaders from within the company--and to do this in a company with no tradition of developing people internally. How can Cisco move from a "buy" to a "make" human capital strategy? The lessons from this case provide a template that other organizational leaders can use in managing organizations through various stages of evolution and different types of growth. Please note: This case also has a (B) supplement available.
Authors :: Jennifer A. Chatman, Charles A. O'Reilly
Swot Analysis of "Cisco Systems: Developing a Human Capital Strategy (A)" written by Jennifer A. Chatman, Charles A. O'Reilly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cisco Human facing as an external strategic factors. Some of the topics covered in Cisco Systems: Developing a Human Capital Strategy (A) case study are - Strategic Management Strategies, IT, Leadership, Mergers & acquisitions and Organizational Development.
Some of the macro environment factors that can be used to understand the Cisco Systems: Developing a Human Capital Strategy (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, wage bills are increasing, technology disruption, increasing government debt because of Covid-19 spendings, increasing energy prices, there is increasing trade war between United States & China,
there is backlash against globalization, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Cisco Systems: Developing a Human Capital Strategy (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cisco Systems: Developing a Human Capital Strategy (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cisco Human, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cisco Human operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Cisco Systems: Developing a Human Capital Strategy (A) can be done for the following purposes –
1. Strategic planning using facts provided in Cisco Systems: Developing a Human Capital Strategy (A) case study
2. Improving business portfolio management of Cisco Human
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cisco Human
Strengths Cisco Systems: Developing a Human Capital Strategy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cisco Human in Cisco Systems: Developing a Human Capital Strategy (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Cisco Systems: Developing a Human Capital Strategy (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Cisco Human digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cisco Human has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Cisco Human is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jennifer A. Chatman, Charles A. O'Reilly can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Cisco Human is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Cisco Human is present in almost all the verticals within the industry. This has provided firm in Cisco Systems: Developing a Human Capital Strategy (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Cisco Human has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Cisco Systems: Developing a Human Capital Strategy (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Cisco Human are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Cisco Human is one of the leading recruiters in the industry. Managers in the Cisco Systems: Developing a Human Capital Strategy (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Organizational Development industry
– Cisco Systems: Developing a Human Capital Strategy (A) firm has clearly differentiated products in the market place. This has enabled Cisco Human to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Cisco Human to invest into research and development (R&D) and innovation.
Ability to lead change in Organizational Development field
– Cisco Human is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cisco Human in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Cisco Human
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cisco Human does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Cisco Human has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cisco Systems: Developing a Human Capital Strategy (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Cisco Systems: Developing a Human Capital Strategy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cisco Systems: Developing a Human Capital Strategy (A) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Cisco Systems: Developing a Human Capital Strategy (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cisco Human 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Cisco Systems: Developing a Human Capital Strategy (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cisco Systems: Developing a Human Capital Strategy (A) can leverage the sales team experience to cultivate customer relationships as Cisco Human is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Cisco Human is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Cisco Human needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cisco Human to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cisco Systems: Developing a Human Capital Strategy (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cisco Human has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Jennifer A. Chatman, Charles A. O'Reilly suggests that, Cisco Human is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cisco Systems: Developing a Human Capital Strategy (A), is just above the industry average. Cisco Human needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Need for greater diversity
– Cisco Human has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Cisco Human has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Cisco Human has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cisco Human supply chain. Even after few cautionary changes mentioned in the HBR case study - Cisco Systems: Developing a Human Capital Strategy (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cisco Human vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Cisco Human, firm in the HBR case study Cisco Systems: Developing a Human Capital Strategy (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Cisco Systems: Developing a Human Capital Strategy (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Cisco Systems: Developing a Human Capital Strategy (A) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cisco Human can use these opportunities to build new business models that can help the communities that Cisco Human operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cisco Human in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Manufacturing automation
– Cisco Human can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cisco Human is facing challenges because of the dominance of functional experts in the organization. Cisco Systems: Developing a Human Capital Strategy (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cisco Human to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Cisco Human has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Cisco Systems: Developing a Human Capital Strategy (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cisco Human to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cisco Human can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Cisco Human can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Better consumer reach
– The expansion of the 5G network will help Cisco Human to increase its market reach. Cisco Human will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Cisco Human has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Cisco Human has opened avenues for new revenue streams for the organization in the industry. This can help Cisco Human to build a more holistic ecosystem as suggested in the Cisco Systems: Developing a Human Capital Strategy (A) case study. Cisco Human can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Cisco Human can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cisco Systems: Developing a Human Capital Strategy (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cisco Human can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Cisco Systems: Developing a Human Capital Strategy (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cisco Systems: Developing a Human Capital Strategy (A) are -
Technology acceleration in Forth Industrial Revolution
– Cisco Human has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Cisco Human needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Cisco Human needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cisco Human can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cisco Human will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Cisco Human is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cisco Human can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Cisco Human can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Cisco Human demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Cisco Human needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cisco Human business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cisco Human in the Organizational Development sector and impact the bottomline of the organization.
Increasing wage structure of Cisco Human
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cisco Human.
Weighted SWOT Analysis of Cisco Systems: Developing a Human Capital Strategy (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Cisco Systems: Developing a Human Capital Strategy (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Cisco Systems: Developing a Human Capital Strategy (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Cisco Systems: Developing a Human Capital Strategy (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Cisco Systems: Developing a Human Capital Strategy (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cisco Human needs to make to build a sustainable competitive advantage.
