Cisco Succession Plan Takes a Hit

Viewed as the next top dog, Chief Development Officer Charles Giancarlo, a force in Ciscos push into the small and medium business market, decided to pursue other opportunities rather than wait for that position to open up.Giancarlo's joined Cisco 14 years ago after its acquisition of Kalpana, an Ethernet switch supplier. The executive started Cisco's business development organization and helped to oversee Cisco's successful merger and acquisition strategy. He initiated and then led Cisco's Small and Medium business activities including contributing to the development of Cisco's reseller channel. Recently, Giancarlo led a number of Cisco's emerging technology initiatives, including its push into Unified Communications, home networking, wireless networking, security, video, and TelePresence.

So it is clear that as Chief Development Officer, Giancarlo played a key role in driving Ciscos technical advances and helped the company determine what areas to focus on and how to position its products against competitors. Rather than replace him with one person, the company formed a Development Council, comprised of seven key technology leaders, who will oversee Cisco's development efforts and report directly to Chairman and CEO John Chambers. Whether this group will be as effective as Giancarlo was will become clear in the next year or two.

Giancarlos move was only a minor surprise. Earlier this year, Chambers indicated that he plans to hold his position as CEO for another five years. Giancarlo, who turned 50 this year, then decided it was time for him to move on and try and find his own company to run. The pool of potential candidates to succeed Chambers now includes Kathy Hill, senior vice president for the Access Networking and Services Group; Ned Hooper, senior vice president of the Consumer and Small Business Group; Jayshree Ullal, senior vice president of the Data Center, Switching, and Services Group; Don Proctor, senior vice president of the Software Group; Tony Bates, who heads up the Service Provider Technology Group; Marthin DeBeer, who is in charge of the Emerging Technologies Group; and Senior Vice President Pankaj Patel. None of them seem to be the clear favorite, so jockeying for that position will occur in the next 12 to 24 months.

Giancarlo, 50, started his new job as managing director and partner at Silver Lake, an investment firm focused on large-scale technology investments in technology this week. Chances are that he may use that position to identify a start-up that he would like to run himself.

His departure is seen as a major loss of Cisco. Throughout its history, the company has weathered many storms. As the new year begins, the company finds itself with new challenges, ones it will need to address in order to continue serving small and medium companies.

Does the executive turnover impact your perception of Cisco? What do you see as the pluses and minuses of such changes at established companies, like Cisco?